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The customer as god

Most businesses figured out a long time ago that delivering good customer service is a pre-requisite for long term financial success. If you’re like me you will have noticed that more and more often issues can be sorted out with a single email or phone call (although some providers remain frustratingly awful at looking after their customers – particularly banks and telecoms companies). A quick history of the phrase ‘the customer is always right’ is illustrative here. Use of the phrase dates back to the early 20th century when the concept was championed by a few visionary firms (including Selfridges here in the UK), then by the beginning of this century management were pushing the idea so hard that comedians derided it as a cliche, and now it has become so widely accepted that people don’t really joke about it.

However, all of this progress hasn’t really made its way into the world of advertising yet.

Back in 2008-09 I wrote a few posts about Vendor Relationship Management (VRM), a conceptual framework for improving the customer experience of being advertised to which turns the traditional advertising model on its head by putting the customer in control of the adverts they see. In theory this should be better for everyone – the customer only sees ads that are relevant to things they want to buy or do, and the advertiser can avoids the waste of advertising to people who aren’t interested in their product.

Doc Searls and the other proponents of VRM have sketched out a technical architecture for the services that are required to make this vision a reality, the most important element of which is a personal datastore for each consumer which tells advertisers which products and services they are allowed to advertise. The datastore contains rich profile information which is valuable for advertisers, but the contents and access to the datastore are controlled by the consumer, who may choose to see no ads at all.

I stopped writing about VRM in 2009 when it became clear that the practical challenges to implementing VRM were such that we were unlikely to see any successful startups in this area in the short term. I think the biggest challenge is getting consumers to engage with the concept, both by contributing to a personal datastore and then by updating their preferences so advertisers know what they might want to buy. For a service to work the data needs to be captured and the preferences inferred without any effort from the consumer, and to my knowledge nobody has found a way to do that.

I still believe in this vision of the future though. It is much more efficient than today’s advertising which, despite much improved targeting, is still mostly irrelevant to the consumer and increasingly simply not seen.

I’m writing about this now because I just read an interview with Doc Searls about his new book, The Intention Economy. The interview is a good reminder of the problems with the existing advertising system and how things will look different in the future. As I say, I still believe in the vision of VRM, but equally the path that gets us there still isn’t clear. I think developments in smartphones and intelligent agents are bringing us closer to the point when that clarity will arrive though, and I’d be happy to hear from any startups working in this area.