Category Archives: The Customer Journal

Personal vs. Personalized

In Worth The Deal? Groceries Get A Personalized Price, Ashley Gross on NPR says,

Heather Kulper is one of those people who really wants to get a good deal. She’s a mom in a suburb north of Seattle who writes a blog about coupon clipping and saving money.

On a recent shopping trip to Safeway, Kulper pulls up a special Safeway app on her phone called Just For U. It shows her deeper discounts on products that she’s likely to buy based on her shopping history. The deals are lower than the club card discount listed in the aisle. When she checks out, she gets that personalized sale price.

“This is the artisan caramelized onion bread, which is normally $4.29. Priced with the Safeway club card, it’s $2.99,” Kulper says. “But with the Just For U personalized deal, it’s 99 cents.”

Kulper says it feels a little bit like she’s getting a secret deal.

It’s kind of like the old days, when you walked into a relative’s small grocery store, and they gave you the family discount. Except now, this is a big corporation using computers to calculate exactly your propensity to buy and at what price.

She concludes,

On this most recent trip, Kulper saved 41 percent with the Just for U app and coupons — $21 altogether — on her purchases. She says she’s happy with her discount, and she doesn’t mind that Safeway knows every tiny little detail of what groceries she buys. To Kulper, it’s worth it, as long as she can save money.

I can’t find Heather Kulper’s blog (the story doesn’t provide a link, and searches go mostly to the story), but it’s clear that she’s one kind of shopper: the aggressive bargain hunter. Is Safeway trying to turn all customers into full-time bargain hunters? Hard to say at this point, because it’s not clear whether a card-carrying Safeway customer is hunting for bargains, or simply forced to use the card to avoid paying the inflated “normal” price. It’s also not clear whether a personalized discount is any different than a coupon. The image above is one I shot of a Stop & Shop scanner, telling me about one in a series of discounts it offered me, based (presumably) on past purchases at the store.

Let’s think about about turning this around, to a system you control as a customer. You share your shopping list with the stores where you like to shop, and they come back with information about what they’ve got. Maybe they tell you they’ll give you a discounted price, or maybe they’ll tell you something is out of stock, or maybe they try to switch you to buying something else. In any of those cases you should also be able to tell them what you like or don’t like about what they’re telling you, and why. What matters in this alternative system is that the system is yours, not theirs. You take the lead, you control the information you share, and you aren’t trapped into many separate relationships, each with its own system for relating with you. In other words, it’s personal — by you —rather than personalized for you.

This is VRM, for Vendor Relationship Management. It’s how you run your relationships with many different companies, rather than how they run their relationships with many different customers. (Those are called CRM, for Customer Relationship Management, a many-$billion business.)

It’s still early, so there’s lots of room for customers to take the lead in helping develop VRM tools and services. You’ll find a list here, in the ProjectVRM wiki.

Why CRM needs to turn around

This guest post is by Charles Oppenheimer, creator of Prizzm and Mightbuy.it

CRM (customer relationship management ) are systems that companies use to track their customers.  The hope for most companies that invest in CRM is that their  investment will produce happier customers, that loyal customers will produce more profits.

To some extent CRM investment has worked for companies that have made long term investments in CRM processes, despite the flaws with these systems.     Apple is a decent example, they invest in very high end  CRM systems – but no amount of money they spent on customer service is too much, they are wildly profitable, and probably just want to spend more to make customers happier.   But many customers  feel that the investment hasn’t worked, they aren’t happy, or often outraged and appalled by terrible service and awful ads  and marketing.  Here is a recent one about United Airlines – one of the few cases where terrible customer service is almost life threatening. Usually it’s not that bad, but as customers we have the right to express ourselves if we don’t like our vendor, either by taking our business elsewhere or complaining – or both.

There are a number of problems with  CRM promise:

1. CRM doesn’t work.  CRM doesn’t “manage” relationships with customers. Oops.  They are databases that track a few data points and transactions – at best. Often they fail to do that too. Oops again.

2. They are inefficient – they can cost an enormous amount of money, smaller businesses generally don’t use them at all.  The cloud/saas has reduced some of the costs, but many costs are organizational and haven’t fallen that far.

That isn’t stoping the CRM industry, many players are growing as fast as ever. Who doesn’t want happier customers?  But there is a shift going on in CRM  – powered by the proveribal social media firehose.  Although there is a lot of hype, it’s true, things have changed, both in marketing sideand service side of CRM. Customers now have systems of their own and public voices. For every corporate dashboard showing stack ranking of satisfied customers, there is likely to be an outraged blog post, or tweets or facebook messages about the company for all the world to see.  The fact that each person is a publisher has changed the way many companies see their customers.  They are a bit scared, and excited by the opportunity, the changes in what’s going on with social media.

Companies are excited about social media because it may produce new revenue channels, and they are scared because customers can say anything they want about any company, with better reach than most marketing campaigns.   And indeed, the fastest growing segment of CRM is those parts that deal with social media. Systems that publish tweets, that monitor sentiment, scanning twitter and responding – these systems are flying off the shelf.

CRM systems have always been fancy databases. Databases of first name, last name, middle name, multiple addresses.  Companies fill that information out themselves,  and hundreds of different companies track the same people, often inaccurately across multiple systems they spend billions on.  And that doesn’t tend to make  happier customers.

The problem with the Social Media investments in CRM is companies are making investments in the same the traditional database CRM model – companies owning the data. They scan social networks and import the data into their CRM system, and believe they know customers better.

Proposal.  Here is where CRM needs to go: Customers need to track companies, and use their own systems to do it.  A model that is the reverse of the current system, companies tracking and marketing to their own customers.  A system that the fundamental data model radiates from the individual, each customer tracking multiple companies.

It’s not how CRM systems are built now. It should be.

Each customer should have records of companies and products they deal with, what they think about them, what issues they have, what they recommend.  That is already happening to some extent – how many of your friends have complained about companies on facebook, how many times do you turn to Yelp for a review instead of the yellow pages? This trend isn’t stopping there needs to be more tools that support customers more efficiently, so each customer will have evolving tools that hopefully work more like Facebook than Oracle.

Let’s help NBC prep for the 2014 Winter Olympics

ice crystals and olympics symbol

The 2012 Summer Olympics are almost over, but not the challenge of a world where more and more customers are looking to watch coverage — especially of the live kind — on devices other than TVs, and through connections other than cable and satellite.

This has proved hard for many cable and satellite TV customers (myself, for example.) who would also like to watch NBC’s coverage on computers, smartphones, tablets, or large screens connected directly over the Internet.

For example, in spite of NBC’s good efforts (in the form, for example, of smartphone and tablet apps), it has often proven hard for cable and satellite TV customers to authenticate with their providers, or to find what programming packages are required to obtain NBC’s coverage services for the olympics.

No doubt NBC will soon be sitting down with itself, and with its distribution partners, to discuss what they have learned over the last few weeks, and to begin preparing for the 2014 Winter Games in Sochi, Russia. Customer Commons wishes to help with that, by convening an independent forum where all of us can discuss what we’ve learned, and where customers can offer constructive help.

This will not be the place to complain, or to assume that the only parties in a position to come up with good ideas and solutions are NBC and its distribution partners. Out here in the long tail, we have plenty of good ideas too, and are willing to help any way we can. (In fact, I did that for NBC’s Winter 2010 Olympics in Vancouver, by contributing ice crystal images that appeared on screen throughout the event.) We are mindful that the goods are not free for the taking, and that improvements must be worthwhile for everybody, starting with NBC and its bottom line.

We’ll start with comments here, while we set up the forum. If the forum proves successful, we will also have a body of experience that can be leveraged in other markets where meeting demands of a fast-arriving future are daunting for everybody involved. We also invite ProjectVRM and PDE.Cc developers to come help out too. (These are developers working to solve market problems from the customer side, in cooperation with sellers.)

We have a unique opportunity here, while the olympics are still going on, to direct everybody’s interests in a positive and mutually helpful direction, a year and a half before the next olympics begin. So let’s go for it.

Craigslist

I’ve been following the Craigslist/PadMapper news.    As the situation has unfolded to include 3Taps,  Craigslist suing both companies claiming all sorts of legal infractions including the assertion that the User Generated Content on Craigslist is now owned by Craigslist (per the rights claims in the Terms of Use) citing those terms as:

“Any access to or use of craigslist to design, develop, test, update, operate, modify, maintain, support, market, advertise, distribute or otherwise make available any program, application or service (including, without limitation, any device, technology, product, computer program, mobile device application, website, or mechanical or personal service) that enables or provides access to, use of, operation of or interoperation with craigslist (including, without limitation, to access content, post content, cross-post content, re-post content, respond or reply to content, verify content, transmit content, create accounts, verify accounts, use accounts, circumvent and/or automate technological security measures or restrictions, or flag content) is prohibited. This prohibition specifically applies but is not limited to software, programs, applications and services for use or operation on or by any computer and/or any electronic, wireless and/or mobile device, technology or product that exists now or in the future.”

I have to remind myself that this is ‘Craigslist’ that ‘hippiesque’ community postings hub.   BUT reading this I am reminded that it is a corporation and compared to PadMapper and 3Taps it is an ’800 pound gorilla.’   Nothing demonstrates that better than this language quoted above from their TOS and their lawsuit.  How can they not see how these terms are in direct conflict with the desires of their huge community of users.  Put simply,  the legal posture misses the forrest for the trees.  The community (Craigslist CUSTOMERS) get this,   of Digital Trends writes:

All that said, putting sites like PadMapper out to pasture is incredibly, incredibly anti-consumer. And it means that Craiglist has two choices: Either allow the likes of PadMapper to exist, or massively update your platform. I’m in favor of the former — slap a licensing fee on interested parties for all I care, and those that are truly getting traffic thanks to the database that Craigslist has created will pony up the cash. Sure, you’re feeding your competition in that scenario, but unless you’re willing to redesign your site for a pleasant and successful user experience then you may as well demote yourself from consumer-facing application to platform.

As something of a short term (but maybe long term) solution, PadMapper is promoting its own service, PadLister, where you can list a home for free on the site. The entire debacle is getting so much hype that PadLister’s name is rising. Considering the angry mob ready to charge with virtual pitchforks, this could easily have a negative effect on Craigslist.

It sounds childish to say this, but you’re being plain mean to users, Craigslist. Your site is chock-full of data I need, but your interface is an exercise in torture. Either give me the tools to effectively use your site or allow someone else to do it.

Craigslist is fundamentally about community, it’s success is because of community support and now it is biting the hand that feeds it . In the wake of this news and community uproar, I wondered if Craigslist would respond to their community,  attempt to mitigate this community relations disaster.  Perhaps  engaging with them to address complaints about the outdated platform.

Given the community uproar Craigslist’s lawyers ought to be urging their executives to ‘make love not war!’  Not so.  Yesterday, Craigslist ‘upped the ante’ by sneaking the following exclusive license clause in Craigslist posts:

Clicking “Continue” confirms that craigslist is the exclusive licensee of this content, with the exclusive right to enforce copyrights against anyone copying, republishing, distributing or preparing derivative works without its consent.

In his blog post, Jonathan Berger writes:

I don’t remember seeing this before at the bottom of the Craigslist posting form. I’m guessing this is the result of the Padmapper debacle?

Claiming an exclusive license over user content is, until yesterday, unheard of and, in this case,  it is just dumb.    Moreover, sneaking in terms, after the fact, is plain wrong.  By doing this, Craigslist made it clear that they have officially moved to the dark side.

From a legal perspective claiming ownership (exclusive license) of the content copyright would make sense if there was a copyright to claim.   You can’t copyright facts so in a classified ad perhaps the only ‘copyrightable’ content is the descriptive wording of the ad .  The  ‘substance’ such as price, rooms, location (in the case of rental listings) is not subject to copyright.  Put simply, dumb move all the way around!  Timothy Lee of Ars Technica wrote an excellent analysis which concludes with the following insight:

“Craigslist fails to recognize that its users gain value by having their advertisements widely distributed and searchable. Instead of working to benefit its users by developing new, innovative features itself or encouraging third-party developers to do the same, Craigslist believes it can retain its strength in the market simply by clinging to its user’s content in a Gollum-like fashion.” 

By standing with the interests of their community, Craigslist could benefit on the business side, too.   As it stands, they are giving up a tremendous opportunity for additional revenue.  As a user of Craiglists’ free service I would gladly pay a small fee to have my listing distributed more widely on other networks. Craigslist could have additional revenue from it’s users and additional revenue from partnering agreements with other networks by becoming a data broker on behalf of their listing users.

I know that this situation will likely be discussed at business schools and maybe it will even be written up as a business case study, in the future.   Depending on the outcome of the litigation, the litigation claims may be discussed in law schools.  It is unlikely that the discussion at the business school will be anything like the one at the law school.   Unfortunately, both will miss the point, that in their zeal to win they are really losing.

A question of intent

The concepts behind Facebook’s rumored “WANT” button are rooted in the idea of the “intention economy” and are generalizable beyond the Facebook ecosystem. Both customers and enterprises, using today’s existing infrastructure and conventions, can create and listen for intention signals using open, lightweight mechanisms, with customers creating those signals and enterprises listening for them. The approach described here outlines one such mechanism.

The Facebook “WANT” button is the canary in the coal mine for the “intention economy”

On June 27, 2012, blogger Tom Waddington discovered that Facebook had included the ability to create a “WANT” button in its software development kit (SDK). According to reports from Waddington, as well as others including Inside FacebookGizmodoVentureBeat and Mashable, the button will be a way for individuals to indicate their desire to purchase a product.

Inside Facebook had the following to say:

“Just as the Like button allowed Facebook to collect massive amounts of data about users’ interests, the Want button could be a key way for the social network to collect desire-based data. A Want button plugin will make it easy for e-commerce and other sites to implement this type of Facebook functionality without having to build their own apps.”

The fact that Facebook may be testing the “WANT” button is the clearest indication to date that we are on the path to the “intention economy.” Doc Searls has described the intention economy as “an economy driven by consumer intent, where vendors must respond to the actual intentions of customers.” Others, such as John Hagel, have stated that this thinking around the intention economy “is a graphic demonstration of the shift from push to pull that is disrupting our business world.

The “WANT” button, however, is hobbled by the fact that it only works in the Facebook ecosystem and, more importantly, appears as if it’s going to require a non-trivial bit of work to implement. Additionally, the “WANT” button is 100% driven by vendors who are selling items – if the vendor hasn’t indicated through a bit of arcane code that the “WANT” button is available for an item, the button will not appear. There is no way for an individual to initiate the conversation around desire for an arbitrary product or service.

Although definitely a step in the right direction, indicating interest through the proprietary “WANT” button within Facebook is a relatively coarse-grained way for a customer to signal intent.

Internet culture has already created conventions for signaling

That said, there are other pieces of the intention puzzle already in place that can be used. The expression of intention is, at its core, a signal. For the past few decades in particular, however, most of the “signaling” between vendors and customers has come from the vendor in the form of advertising, PR and the like. (In fact, one could argue that the whole discipline around creating “messaging platforms” for large enterprises is, at its core, an attempt to create clear, differentiated signals from the vendor side.) However, as more customer-driven publishing and communication methods have been created, first with blogs and more recently with customer-created conventions on top of proprietary platforms such as Twitter, Facebook, Instagram and Pinterest, individuals have started to introduce their own signaling mechanisms into the fray. Here are two examples:

The hashtag (#) is a signal of topic, organization or keyword. For instance, including a hashtag of #bacon in a post or tweet makes it easy to search for posts that are about bacon.

In the example above, the #bacon hashtag makes it easy to find this post.

The interesting thing about the hashtag construct is that is was created organically. It wasn’t created by a committee, it wasn’t designed by an organization, it wasn’t created as part of a marketing campaign. The hashtag was simply proposed by Chris Messina (@chrismessina) in a single tweet in 2007 as a way to easily find related conversations about BarCamp that were happening online at that time.

You can learn more about the history of the hashtag here.

Since then, the humble hashtag has become the de facto signal that the text that follows it is related to a topic or is a concept of importance to the author of that post. In contrast to the “WANT” button, which needs to be supported by Facebook and explicitly supported by the vendors of products or services that a customer might “want,” it’s important to note that there is no central organization that creates or approves hashtags. Hashtags follow the “NEA” protocol of the open internet:

 

  • Nobody owns them
  • Everybody can use them, and
  • Anybody can improve them

The NEA concept is important. If something conforms to NEA, it can scale, grow, evolve and morph as a market evolves, without constraint. This enables the possibility of a very fast, very efficient process of innovation and improvement.

If the hashtag is a signal of topic and organization, then the at-reply (@reply) is the de facto signal of social connection. The at-reply convention has evolved to signal that the message contains information that is of particular interest to a particular individual or entity.

Lou really, really loves Zappos and wants to make sure that Zappos knows it.

Like the hashtag, the concept of an “at-reply” evolved organically, though a conversation of individuals on Twitter. You can learn more about the history of the at-reply here.

Sometimes these conventions get combined. For example, Micah Baldwin (@micahproposed the concept of a “Follow Friday” online event, when he sent a tweet and named a number of individuals with the at-reply notation. In doing so, he started a ritual that many people invoke every week on Friday. Now, every week tens or hundreds of thousands of people recommend others in their networks as individuals who are worthwhile to follow on the Twitter service using the #followfriday and #ff hashtags coupled with those individuals’ Twitter handles.

Although both the hashtag and at-reply conventions were initially invoked on Twitter, they are concepts that are platform agnostic at their core. Since then, both concepts have jumped to other platforms including Facebook, Pinterest, Instagram and Google+, underlining the fact that useful, simple solutions to individuals’ needs are not constrained to any one technology silo.

A question of intent

In the same way that the hashtag is a signal of organization and the at-reply is a signal of connection, the question mark (?) could be a signal of intent. For example, including ?rentalcar in a post could indicate that the poster has intent to procure a rental car, the inclusion of ?flight could indicate that the poster is looking for airfares for an upcoming trip, and so forth.

The first example of this I’ve seen in the wild occurred earlier this week.

For vendors, this approach triggers a number of things, the first of which is that it turns on a lead-generation mechanism with extremely high fidelity. If an individual has explicitly stated intent via this mechanism, that individual is the hottest possible prospect. This mechanism is beacon to vendors: “Here is a customer who wants to buy what you’re selling.”

Organizations are already using tools such as Radian6, Sysomos, Attensity, and even free tools such as Tweetdeck and basic Twitter search to seek out individuals who are mentioning their brands. The extension of those listening efforts to additionally listen for intent signals of this type are nominal. (Listening tools like NeedTagger are already starting to move in this direction.) From the customer’s side, there is a similarly minimal learning curve required. Anyone can state intent in this manner using existing tools in a matter of moments.

We saw that explicit technical support for concepts such as the hashtag and at-reply did, after a period of time, eventually become a part of the systems upon which they were built. It is a similarly straightforward effort for platforms such as Twitter, Facebook and Pinterest to support this question mark based notation for intent. In doing so, those platforms would be also able to generate highly valuable trend information on the types of intention signals that are “trending” across various geographies and demographics, in the same way that Twitter and Google+ today highlight trending topics within their services based on the frequency of use of particular hashtags.

A statement of permission

There’s a flip side to this idea of unambiguously indicating intent with a statement such as ?flight. By explicitly indicating intent, an individual is indicating interest and is also explicitly giving permission for vendors to contact them. This is the grail for marketers. In the current state of affairs, there is still a huge differential between what vendors, advertisers and publishers of information believe that a particular individual is interested in, and the actual reality of the situation. We’ve all received “targeted” ads on social platforms that are so off the mark to be laughable. With clear intention signals, however, that guesswork is reduced to near-zero; the interaction is all signal and no noise. (Huge kudos to @lisastone for this insight on how the flip side of intention is permission.)

So…what do folks think about using the ? as an indicator of intent, in the same way that we’ve used other signaling mechanisms as noted above?

This post originally appeared at http://socialcustomer.com

Free vs. Followed

grasped hand The fight between the free market and the followed market is about to begin. And the way to bet is on the free market, because it’s what we know works best. Also because the followed market is nuts.  It only persists because it’s normative at the moment, and an enormous sum of investment is going into improving what’s most nuts about it: following people around and constantly guessing at what they might want (or trying to make them want something some algorithm thinks it might be able to make them want).

Let’s look at those norms a bit more closely. In the followed market, we —

  • Maintain separate logins and passwords for every site and service with which we do business, which might number in the hundreds
  • “Agree” to terms of service and privacy policies that we don’t bother to read because we have no choice but to accept them if we want to use the offered services
  • Acquiesce to stalking by sites and their third parties, even as we travel out of those sites and around the Web

In the physical world where the free market remains defaulted, you are free to be who you say you are (or to remain anonymous — that is, nameless in the literal sense), and to arrive at whatever terms are agreeable to you and the sellers you engage, with minimal coercion. This is what we enjoy when we walk through a bazaar, down Main Steet, or through a shopping mall. We don’t have to become a member of Nordstrom, or Trader Joe’s, The Container Store, or the corner grocer, to shop there, or to buy anything from them. And, when we do, we usually assume that we are not being tracked by the store after we leave.

In the followed market, we are free to choose between captors who make all the rules. Our personal identity is the separate one we have with each of them, and which they administrate. Our relationship with each of them is fully contained within their separate silo’d systems. Worst of all, we are stalked after we leave, as a matter of course. “Social” sites such as Facebook aid in surveillance by making it easy for us to spill all kinds of personal data — about ourselves and our contacts — when we “login with Facebook” elsewhere.

And its getting worse.

On July 30, 2010, The Wall Street Jounal inaugurated its What They Know series (http://wsj.com/wtk) with The Web’s New Gold Mine: Your Secrets, by Julia Angwin. Here were the key findings she reported:

• The study found that the nation’s 50 top websites on average installed 64 pieces of tracking technology onto the computers of visitors, usually with no warning. A dozen sites each installed more than a hundred. The nonprofit Wikipedia installed none.

• Tracking technology is getting smarter and more intrusive. Monitoring used to be limited mainly to “cookie” files that record websites people visit. But the Journal found new tools that scan in real time what people are doing on a Web page, then instantly assess location, income, shopping interests and even medical conditions. Some tools surreptitiously re-spawn themselves even after users try to delete them.

• These profiles of individuals, constantly refreshed, are bought and sold on stock-market-like exchanges that have sprung up in the past 18 months.

The new technologies are transforming the Internet economy. Advertisers once primarily bought ads on specific Web pages—a car ad on a car site. Now, advertisers are paying a premium to follow people around the Internet, wherever they go, with highly specific marketing messages.

On the 17th of this month, in Online Tracking Ramps Up, Julia begins,

Online tracking on 50 of the most-visited websites has risen sharply since 2010, driven in part by the rise of online-advertising auctions, according to a new study by data-management company Krux Digital Inc.

The average visit to a Web page triggered 56 instances of data collection, up from just 10 instances when Krux conducted its initial study, in November 2010. The latest study was conducted last December.”The main reason for the difference is live online auctions of data about you:

Krux estimated that such auctions, known as real-time bidding exchanges, contribute to 40% of online data collection.In real-time bidding, as soon as a user visits a Web page, the visit is auctioned to the highest bidder, based on attributes such as the type of page visited or previous Web browsing by the user. The bidding is done automatically using computer algorithms.

On June 26, the Journal published On Orbitz, Mac Users Steered to Pricier Hotels, by Dana Mattioli, who writes,

The Orbitz effort, which is in its early stages, demonstrates how tracking people’s online activities can use even seemingly innocuous information—in this case, the fact that customers are visiting Orbitz.com from a Mac—to start predicting their tastes and spending habits.

Imagine walking with a friend down 5th Avenue in New York and attempting to have a conversation about the totally different scenes both of you see when you look into the stores you pass or enter together. One of you sees hats in a store window while the other sees shoes. One sees a door where the other sees a wall. One sees a counter of candies while the other sees an aisle of garden tools. When one of you pauses to look at the cosmetics counter, the colors of lipstick suddenly change, because the store — or its third parties — know it’s you and start making guesses about what you might want, or that the companies paying for shelf space in the store hope to make you want. When the other looks at the store directory, she finds that the departments have been re-arranged. Now the shoe department is to her right when it used to be to the left. The dress shoes are now in the back, and all of them are red and black. Athletic shoes are now in front, because she paused to look in the window of a sporting goods store back up the street.

Whether or not this kind of personalization works is beside a more essential point: that in today’s online marketplace we are being followed constantly, with at most only our tacit approval. Without the conscious involvement of fully human customers, operating as free and independent actors possessing full agency, the online environment has gone insane. That is, without coherence, or grounding in reality. It makes sense only to the vendor’s side of the marketplace, and even there it’s not fully together. Writes Julia Angwin in her most recent story,

More than half the time, Krux found that data collectors were piggybacking on each other. For example, when a user visited a website that had code for one tracking technology, the data collection would call out to and trigger other tracking technologies that weren’t embedded on the site. As a result of such piggybacking, websites often don’t know how much data are being collected about their users.

‘It may be the first medium where the buyers have more information about the price, the value and the amount of inventory than the seller,’ said Krux President Gordon McLeod.

In the free market, as it has been understood since our ancestors first traded shells for seeds, certain things are stable and well understood. These include not only the physical nature of locations, but social norms and protocols for interacting with each other, which begin with the assumption that the other party is a free, independent and sovereign being who controls what is public and what is private about themselves. (Which is why, for example, we tend to wear clothes in public and live in enclosed spaces.)

In the free market it would be absurd for a guy from a store to put a hand in your pocket and hold onto your leg while you walked around, saying “Don’t mind me. I’m just here to see what you’re up to. Actually I don’t want to know your name, but just to track what your body is doing so you can get the best advertising and product offerings, based on what some machines think at the moment would be best for you and for us. It’s for your own good.” Or, more literally, to do the same with an invisible robot tick that attaches to your body and sucks out your data. But in the followed market, that stuff is normative in the extreme. And it works well enough, so far, at least for the advertisers and their intermediaries, that it persists in spite of its absurdities.

The followed market will fail not only because it is absurd and offensive to human sensibilities, but because it is not as effective as the kind of simple human interactions we were all built for in the first place. We don’t have those online yet — not in the commercial space comprised of billions of competing silos. But we will. Count on it. The Web we know is just seventeen years old (dating back to the first graphical browsers in 1995).

In a general way, what the free market still lacks online is a build-out of capabilities on the customers’ side to match the build-out of capabilities on the vendors’ side. That’s what ProjectVRM has been working toward for the past six years. The result so far is a growing list of developers, projects and prospects for major breakthroughs in customer capacity to assert independence, establish privacy boundaries, and deal with vendors as self-empowered equals and not as vendor-defined and -controlled dependents.

Customer Commons’ mission is to preserve and improve the free market, both online and off, by helping customers become free and independent participants in that market. So, while ProjectVRM remains focused on development and developers, Customer Commons is focused on putting those developments to work for customers — and for giving customers a way to participate in that development, and to lead it forward.

And we welcome your help with that.

Name the Pink Elephants

There is a pink elephant in the room
not a small one either
There is a enormous pink elephant on the couch between us
and yet we both continue to ignore it…
Sammi

When we ‘accept’ terms of service ‘agreements’ we engage in this ceremony, ‘accept’ (as though we have a choice) contract terms that we neither read, understand nor accept. In a word, ‘we lie.”

Biggestlie.com is an awareness campaign aimed at calling out this ‘pink elephant’ and with folks Pär Lannerö, Lars-Erik Jakobsson (icon), Gregg Bernstein, Carl Törnquist, Hanna Arkestål, Max Walter, Mattias Aspelund, Anders Carlman and CommonTerms are to trying to change the status quo.

Likewise, ProjectVRM recently posted ‘Coming to terms’ where Doc Searls who has been talking about this problem for quite some time states:

“We lie every time we “accept” terms that we haven’t read — a pro forma behavior that is all but required by the calf-cow model of the Web that’s prevailed since 1995. We need to change that. And so we are.”

In the context of the web today not only has the relationship become compulsory, but who your are dealing with is totally cloaked. This ‘cloaked figure” (acting not only for itself but other cloaked figures) dictates all the terms of the relationship and on the other side there is just you (an individual). Take this ONE factor of compulsory relationship, with unknown parties, and alarm bells go off.

Let me give you an example: Mint.com.

First line in their TOS reads:

“This Agreement sets forth the terms and conditions that apply to your access and use of the Internet Web site located at http://www.mint.com (“Mint.com”), as owned and operated by Intuit Inc., a Delaware corporation, on behalf of those of its direct or indirect subsidiaries and/or affiliates, (collectively referred to as “Intuit”).”

Translation: This “agreement” is not between you and Intuit, Inc. RATHER this ‘agreement’ is AMOUNG you, Intuit, Inc. and ‘a whole bunch of other companies and people’ called *direct and indirect subsidiaries and affiliates. So every term that includes you granting rights to Intuit INCLUDES granting it to all of these other folks too. Oh, that is also true for every term that involves your agreement to limit Intuit’s liability for problems that arise. That, too, extends to this faceless crowd known as ‘direct or indirect subsidiaries and/or affiliates.’

*DON’T BE TRICKED BY MISLEADING LEGAL LANGUAGE: In this case people read subsidiary especially direct subsidiary and think that by law that means ‘companies under the direct control or owned by Intuit.” Often the interpretation is quite broad especially when the language includes “indirect.” Likewise, the term “affiliate’ may make you think that the relationship is limited but actually it can include a broader and more ‘distant’ (relationally) group of people and companies. When coupled with ‘indirect,’ the realm of possible parties could include just about any company and or person.

When we consider the Mint.com terms of service ‘agreement,” it is clear that privacy policies cannot be considered alone and often do not reflect the real story with respect to the use of your data. All of these projects would be wise to consider the role of what I call the “anti privacy/ anti-people” policies aka “terms of service agreements.” These terms of use allow greater insight into not only the data privacy issue in general, but also that particular organization’s real commitment to their customers’ rights. The terms of these agreements are at odds with the company’s marketing messages. Don’t be misled, just because a law or policy make some assurance that your privacy is protected or information is not shared, it is often not the way you think. Privacy statutes often permit use of data, subject to consent, which is garnered by agreement to the terms of use.

When a contract is written to include every known and unknown direct or indirect subsidiary and affiliate as FIRST party to the contract, who are third parties? Does knowing this clever legal trick change the way you read their Privacy Policy? Their terms of service agremeements? More importantly, does this fact change the way you think about Mint.com in general? In that vein, efforts like BiggestLie.com hit the bulls eye because they highlight the inherent dishonesty and manipulation. But it is not enough we need to understand it and demand change.

That said, efforts toward transparency and “iconization” of terms are actually quite troubling. In an effort to simplify they often lack context and fail to address the larger more anti-customer framework housing these policies taking it as immutable. Moreover, the messaging can be misleading. For example, Aza Raskin’s Privacy Icons includes the following statement under one of the icons:

“Your Data is Used for the Intended Use,” “Mint.com uses your login information to import your financial data from your banks — with your explicit permission.”

With that statement alone, a person may be led to trust Mint.com in a way he or she would not if they also read the terms effectively turning third party data collectors into first parties with all the accompanying rights and privileges.

Context with comprehensive understanding is critical. If they are exploiting my data, and they are honest about it; I will weigh the costs and benefits and make a decision on whether or not to agree. . What I am told in a privacy policy and in marketing messages, that my privacy is important to a company and as a result, they do not sell my data etc., I expect the terms of service ‘agreement’ to support these claims. When, instead, I see the sneaky legalese, I present above, it is completely misleading. The term ‘bait and switch’ comes to mind, I am wondering out loud if this is a possible cause of action against some of these companies; especially those proclaiming to be acting on the customer’s behalf, while maintaining terms as egregious as the blatantly privacy exploitative companies. It seems that companies who intend to market themselves as unique because they protect the customer need to back it up in their legal policies, agreements and practices.

For example let’s consider Personal.com:

Central to their business proposition is that they are unique in their approach to privacy and relationships with customers. Reviewing their recently updated terms of service reveals clauses like this:

“You agree to defend, indemnify and hold Personal, its directors, officers, employees, agents and affiliates harmless from any and all claims, liabilities, damages, costs and expenses, including reasonable attorneys’ fees, in any way arising from, related to or in connection with your use of the Sites and/or Personal Service, your violation of these Terms or the posting or transmission of any materials on or through the Site and/or Personal Service by you, including, but not limited to, any third party claim that any information or materials you provide infringes any third party proprietary right.”

Translation: I as the user must indemnify this company and their affiliates for ANY claim that in ANY way is connected with my use of this service.

In general, I am not opposed to indemnification clauses because they aim to have the people responsible for certain conduct step up to the plate and deal with issues that arise from their failure to do just that, HOWEVER, I do not agree to provisions as broad and sweeping as this provision. This folks, is what lawyers call ‘boilerplate’ that is drafted as broadly as possible forcing the other side to narrow it and customize it to suit the context of the situation. The problem here is that you don’t get to negotiate and even if you did you don’t have a legal department at your fingertips negotiating on your behalf.

If I were the lawyer for the people, I imagine the conversation would go something like this:

Personal.com Lawyer: “We put that provision in the contract because if your use of the services causes us to get sued then you should have to pay.”

Lawyer for the People: “What could they possibly do to get you sued?”

Personal.com Lawyer: “They could (fill in the blank personal.com)”

Lawyer for the People: “Personal, while you are thinking of ‘something’ people could do to get you sued, I’d like to remind you that in a business to business deal this provision would not fly. So trying to cram it down the throat of a customer is wrong!”

Second and more important, where is the Indemnity from Personal.com to the user? If you are promising that your service offers something more than the others out there shouldn’t you stand behind that promise? Not to mention, also that, in a typical business-to-business negotiation, the indemnity goes two way, a la ‘what’s good for the goose is good for the gander’. That said, at a minimum, Personal should step up and provide an indemnification for damages arising from their failure to protect your data.

Once again, the Devil is in the details. It is really terrific to see all of these efforts aimed at providing transparency of privacy or legal terms, pushing for awareness (and accountability, I hope) and new tools to foster customer understanding of those terms. However, I think that ‘privacy policies’ and terms of service ‘agreements’ as they are commonly written reflect an utter and complete disrespect for the individuals’ importance and role in commercial relationships. While it is not my goal to resolve this existential matter today, or in my lifetime perhaps, I believe that there is a lot to be gained by examining the matter thoroughly from the individuals’ side of the ‘agreement.’

The post was originally posted at Those Sneaky Bastards.

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The Promise of the Personal Cloud

The term “personal cloud” is only about a year old and has a wildly disparate set of meanings.  For some, services such as Facebook, Dropbox, and SugarSynch are personal clouds.  For others the gold standard is iCloud, which stores data and media and manages your apps from all your devices – as long as they are all from Apple.  I find myself agreeing with Jon Udell who writes in Wired, “I see signs of the personal cloud in services like Dropbox, Evernote, and Flickr. You can use them for free, or you can pay for higher capacity and enhanced customer service. But the personal cloud also arises from a way of thinking about, and using, any of the services the web provides.”

Yes.  The personal cloud is a way of thinking and it is not necessarily a new way.  Phil Windley and co-authors Craig Burton, Scott David, Drummond Reed and Doc Searls make this case well in a recent white paper, From Personal Computers to the Personal Cloud.  As the title indicates, the authors contend that the best model for thinking about the personal cloud is in fact the personal computer.  Gartner analyst Steve Kleyhans seconds this when he writes, “Many call this era the post-PC era, but it isn’t really about being ‘after’ the PC, but rather about a new style of personal computing that frees individuals to use computing in fundamentally new ways to improve multiple aspects of their work and personal lives.”

Most of the folks working on this nascent space agree that personal clouds will emerge because customers will demand secure and trusted access to their apps, data, and media anytime, anywhere from any device.  Gartner, among others, believes that the market for personal clouds and everything they imply – connected services, devices and data — will be huge.  By 2015 Gartner predicts we will spend some US$2.8 trillion worldwide on connected devices, the services that run them and content transferred through them.  While we all agree that this is what the future looks like, how markets and technology will get there remains an open question.

Are Personal Clouds Inevitable? 

Nothing is inevitable, but the promise offered by personal clouds of putting us back in charge of our personal data, of seamlessly and securely managing our online lives in a way that meets our own idiosyncratic needs, offers a powerful pull.   Windley et at summarize the benefits succinctly.  Personal clouds will 1) change how we relate to everything in our lives; 2) rearrange how we buy and sell products; and 3) revolutionize how we communicate with each other.  Why?  With personal clouds, we set the rules.  Our identities can be fluid and flexible.  Our data can be broadcast widely, hoarded or selectively shared.  We will be able to have infinite channels, that work seamlessly, with people, companies, organizations, accounts, and more.  When we have seamless access to all of our information, and control over the tools and services to use and understand it, everything changes.

While the potential is vast, the challenges are equally hard.  Personal clouds that live up to the vision of trusted, secure, seamless services will require solving a host of hard problems.  Windley et al have begun envisioning the next steps.  Core to their vision is the development of a Cloud Operating System.  Analogous to the OS that makes your PC run, the CloudOS will track your identity, attributes and preferences; run as many apps as you like; store and manage data distributed across the web; and host services for you to use.  Here is a picture that Joaquin Miller put together after a session at the most recent IIW conference. The OS lives inside your cloud.

A Gathering of Clouds

While it is tempting to think of the personal cloud as one thing, living in one place like a personal computer, it is much more likely to be a window into a collection of stuff spread across the net.  This makes sense because this is how the Net is structured.  Virtual stuff doesn’t have to live anywhere – as long as there is a way for me to find it, I can get value from it.  This feature is central to the radical potential of the Net, whose soul is vastly distributed and peer to peer.

We are now living in an era where increasing amounts of our data and services are living in virtual silos maintained and controlled by centralized companies.  The personal cloud slices these silos open, letting the data flow around in new ways.  This is highly disruptive and why Andrew Johnson of Gartner says, “Providers of consumer devices, services and content must anticipate the risk of sweeping changes to their business models.  The personal cloud will force technology providers not only to rethink how they approach markets, but also, more importantly, how they define markets. ‘Emerging’ and ‘mature’ markets are no longer useful market segmentation.”

One of the reasons that the personal cloud will be so disruptive is that it’s not one cloud.  There will be many clouds, capable of talking to each other, with many channels between them.  As long as everything is interoperable, there could be many operating systems, many identity and trust networks, many services, and more.  These “federated personal clouds” as Windley et al call them, mean that there will likely be many vendors in the mix offering different apps and services that work together.  Federated clouds are much more likely to escape centralized control.  This could engender huge new levels of innovation while empowering each of us at the same time.

This dynamic reminds me of one of my most beloved philosophical maxims, drawn from process theology.  An omnipotent god who exerts absolute control over the universe creates a system that limits each individual’s creativity, resulting in a less creative whole.  The god that grants creative control to the creatures and then lets each of them do their thing, ends up with a much richer and more powerful universe.  The moral:  centralized control constrains creativity and innovation.  Something similar is afoot with the personal cloud.  When each of us gains creative control over our virtual lives, the whole virtual universe becomes more innovative, creative and powerful.

Aligning Incentives

Much of the current conversation is necessarily still in the programming weeds.  My hope is that in parallel with much-needed technical development, we will continue to think through real world use cases that test emerging solutions.  These use cases will not only offer leverage to those trying to build business models for the personal cloud, but they will help us ferret out the ethical issues that will inevitably arise.

I personally worry as much about the cloud doing too much for me as too little.  If it does too little, then it will not have real value.  If it does too much filtering, sorting and aggregating then I will potentially be replicating a new version of the filter bubble inside my own cloud.  That’s just migrating creepy practices from our current silos into the personal cloud.  We have to get the filters right.  The trick will be to always, always err on the side of giving users control over their settings, channels, permissions and preferences.  This is the beauty of putting the user in the center.  The vendors that give me choice and control are the ones I will pick.  The incentives between customer and vendor will align.

(This post was originally published at www.spruceadvisers.com.)

Which companies love customers?

Not love to have them, but love interacting with them, knowing them, talking with them, learning from them, involving them in the business, and letting them take the lead sometimes. (And not just by using a “loyalty card” or some other gimmick.)

In The Intention Economy, I give two examples, one offline and one on.

The first is Trader Joe’s, whose retired President, Doug Rauch, told me that his main job at the store was talking with customers. That is, literally, shopping along with them. Seeing what they liked, didn’t like, and why. Asking questions. Getting input. Trader Joe’s, he said, doesn’t just look for transactions, but for relationships. When I asked him if there was anything in the store that customers did not influence, he said no. When I told him we lived in Santa Barbara, he asked if we shopped at the store on Milpas Street or the newer one near Upper State. I was impressed. The dude was based in Massachusetts and still knew every store, and had shopped along with customers at every one he went to as well.

The online example is Zappo’s, which encourages its service people to maximize interaction with customers on phones. The company also welcomes exceptions. For example, I have wide feet: 9 1/2 EE. Shopping just for what fits me is easy. A few minutes ago I bought replacements for my several-year-old ASICS Gel-Cumulus 13 athletic shoes. The old ones look more worn than they really are, so I got some fresh ones. There was no reason to work with a human in this case, but I sensed a human sensibility to the ease with which I could find and get what I wanted. (The Kid and I like to sing, “Shop like a man, fast as you can,” to the tune of the Four Seasons‘ old “Walk Like a Man.”)

So who else is there? You tell us, in the comments below. No restrictions. The only qualifications are the ones I laid out in the first sentence. And tell us why, too.

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Privacy is personal

In the physical world, we govern privacy with clothes and walls, buttons, zippers, windows and doors. (See Clothing as a privacy system.)

We also see privacy as a thing that can be possessed. That’s the framing for statements like, “Give me some privacy, and “Don’t take away my privacy.”

On another hand (there can be many), we also see privacy as a state of being: “This is private.” “Keep this private.”

The American Heritage Dictionary defines privacy as “1. a) The quality or condition of being secluded from the presence or view of others; b) The state of being free from unsanctioned intrusion: a person’s right to privacy”; and  “2. The state of being concealed; secrecy.” The Collins English Dictionary (at that same link) adds one more: “3. (Philosophy) Philosophy the condition of being necessarily restricted to a single person.” The boldface is mine. I like that one. (And not just because I majored in philosophy, back in the decade.)

That’s the noun. To mine the derivational vein, we must also dig the adjective. Here’s American Heritage on private:

  1. a. Secluded from the sight, presence, or intrusion of others: a private hideaway; b. Designed or intended for one’s exclusive use: a private room.
  2. a. Of or confined to the individual; personal: a private joke; private opinions.private road b. Undertaken on an individual basis: private studies; private research. c. Of, relating to, or receiving special hospital services and privileges: a private patient.
  3. Not available for public use, control, or participation: a private club; a private party.
  4. a. Belonging to a particular person or persons, as opposed to the public or the government: private property. b. Of, relating to, or derived from nongovernment sources: private funding. c. Conducted and supported primarily by individuals or groups not affiliated with governmental agencies or corporations: a private college; a private sanatorium. d. Enrolled in or attending a private school: a private student.
  5. Not holding an official or public position: a private citizen.
  6. a. Not for public knowledge or disclosure; secret: private papers; a private communication. b. Not appropriate for use or display in public; intimate: private behavior; a private tragedy. c. Placing a high value on personal privacy: a private person.

Here’s what it says about deep sources for private (and also for privacy): “Middle English privat from Latin privatusnot in public life, past participle of privare, to release, deprive, from privussingle, alone… Indo-European roots.”

Thus, here in the everyday vernacular of the physical world, privacy is well understood, and has been since before we had History. But “here” now also constitutes the virtual world, where you are equally present, and reading this text right now. In the physical “here,” your privacy is provided by what you’re wearing and where you locate yourself. Your choices in the virtual “here” are not so plain and clear. Not yet, anyway. At best we can only hope that the stuff we try to keep private will stay that way. And it is best lately to hope less than you used to, because there is a large and growing business in abusing your privacy in the virtual world. That business is advertising. For that business, your privacy is a problem that can only be solved with a promise: Trust us. We not only respect your privacy, but are in business to help you. Buy stuff, that is.

Credit where due: the Internet Advertising Bureau (IAB) is deeply concerned about privacy, and requires that its members adhere to a raft of privacy principles. Here’s one: “Businesses collecting or using information about individual consumers for interactive advertising purposes should provide choice, where appropriate, to that individual. Consumers also should receive relevant education regarding cross-industry opportunities to opt out of the collection or use of individual information or other methods to exercise choice.”

However well-intended this might be, it’s a window fan blowing against the storm of wealth-creation that the “interactive” advertising business has become. On Friday, Facebook went public with a valuation exceeding $100 billion. Its business is advertising. So is Google’s, with a market cap hovering around $200 billion. The goal for both companies is to “personalize” advertising as much as possible. This requires making their machines learn all they can about you, whether you know it or not. And, for all their talk about providing choices, they’d rather you not shut out their tentacles or cover their prying eyes.

If you want to operate on the Web today, it is almost impossible to avoid either company, or the thousands of other that are in the business of knowing as much as possible about you, so that information can be sold to advertisers and their agencies. Wanting to maximize the sum and quality of information about individuals is at absolute odds with those companies’ stated commitments to privacy — as well as individuals’ own sense, based on experience in the physical world, of what privacy is and how it should work.

Did you know that, when you go to a site that has a Facebook “like” button, Facebook will know you were there, even if you don’t click on the button? Also, says Consumer Reports, “Even if you have restricted your information to be seen by friends only, a friend who is using a Facebook app could allow your data to be transferred to a third party without your knowledge.” And, adds Abine, “You know those Facebook Like and Connect buttons you see on almost every website?  They’re not just for sharing: they’re tracking devices.  Facebook buttons can track both members and non-members of Facebook, even if you never click them.  They transmit your clicks, browsing history, IP address, and more to Facebook.”

Is Facebook going to stop doing that kind of thing on their own, when they believe it’s also the very thing that makes them the most money?

Not surprisingly, Consumer Reports’ parent, Consumers Union, wants a policy solution. That is, new laws that restrict the ability of Facebook and others to, for example, track us without our permission. Meanwhile CU has also put up the HearUsNow site, as a way for individuals to demand better treatment by Facebook. The White House has also issued a Privacy Bill of Rights, which offers guidelines for lawmaking.

In his landmark book, Understanding Privacy, Raymond Solove details the many ways that privacy is nearly impossible to pin down in legal argument, much less in policy. So, while he notes in the first sentence of his first chapter, “Supreme Court Justice Louis Brandeis pronounced it ‘the most comprehensive of rights and the right most valued by civilized men,'” he later adds that “legal scholar Arthur Miller has declared that privacy is ‘difficult to define because it is exasperatingly vague and evanescent.'” Solove’s own case is that “the value of privacy must be determined on the basis of its importance to society, not in terms of individual rights.” He adds, “the value of privacy in a particular context depends on the social importance of the activities it facilitates.” The prescriptive chapters of the book are devoted to laying out a taxonomic framework for understanding privacy problems. Because, sensibly, “A lucid, comprehensive, and concrete understanding of privacy will aid the creation of law and policy to address privacy issues.”

Which is fine, if you think corporations and governments are the only actors in the marketplace with full agency. That is, with the ability to act, and to cause effects. As individuals on the Web, we don’t have that ability today. (Imagine having a website agree to your terms and conditions, rather than the reverse.) One symptom of that is the call for legislative protection, which we wouldn’t have if we had full agency. So, the thinking goes, “We can’t protect ourselves, so the government should step in.”

I’m against that, at least for now, because I don’t believe we’ve done enough to empower individuals on their own. I’d rather we work on equipping individuals to enjoy full agency, as independent and sovereign beings, in the online marketplace as well as in the offline one. Or, in other words, to break out of the calf-cow system (called “client-server”) that we’ve been stuck in since 1995. I believe the personal nature of privacy, as it has been understood plainly since the late Pleistocene, requires that.

Some of the tools are already there. Public key cryptography, for example. Link contracts in XDI. The stuff Alec Muffett starts talking about in Slide 47 of his presentation here. Same goes for much of the work being done by the ProjectVRM development community. As ordinary folk we don’t need to understand the technologies behind all that work, but it helps to know that we’re not starting from zero.

At the very least we need some perspective here, based on the fact that we have hardly begun to explore what it will take to create physical-grade privacy on the Net. And that as we do, we need to keep it personal. That’s where privacy is best understood and measured. There is also cause and effect. If you and I don’t have privacy online, society won’t either.