Photo by mary hodder via flickr

Let’s start with the basic question: What is VRM and why should businesses and marketers care about it?

VRM is Vendor Relationship Management. It’s the customer-side counterpart of Customer Relationship Management, meaning it’s the way customers manage their relationship with vendors. Businesses should care about it because customers will come to market with their own tools, and it’s a good thing to be ready to engage with those tools and those customers.

What role do Facebook, Twitter and other so-called social media play in VRM?

They provide ways to test or prototype some VRM activities. For example, one can put out what we call a “personal RFP” on Twitter. A couple years ago I did that at O’Hare when my family was delayed several hours by a snowstorm. I tweeted a request for pointers to a good sit-down restaurant at the airport and got a pile of helpful responses.

But we were still inside Twitter’s silo. Twitter owns and controls the means by which I issued that RFP. This is very much like it was when e-mail was owned and controlled by companies. You had to operate inside AOL’s mail, or Microsoft’s mail, or MCI’s mail. Today only one company controls all of tweeting, and that’s a problem, no matter how well Twitter behaves.

We have the same problem with Facebook. One company owns the whole show. It’s AOL 2.0. No matter how big Facebook gets, it can’t be bigger than the Web, and certainly not bigger than the Net. It’s a giant walled garden. And walled gardens are not free marketplaces. They are private ones.

Both Twitter and Facebook are close to becoming clichés as well. See Dilbert from last month, especially that first frame:

That you say “so-called social media” says a lot as well. As I’ve pointed out, social media are largely understood as marketing vehicles. Telephony, texting and blogging are no less “social” than Twitter and Facebook, but are dismissed or ignored because they have less marketing value.

VRM is social to the degree that humans are social, shopping is social, and dealing with companies in the marketplace is social. And, to the degree that “social media” – whatever they are – help, we might call them VRM tools. But VRM will never be a branch of social media or marketing, any more than any of us are branches of commercial entities.

What opportunities does the widespread adoption of mobile smartphones present for VRM?

This is the limitless sweet spot for VRM.

Humans are mobile animals. We were not built only to sit at desks and type on machines, or even to drive cars. We were built to walk and talk before we did anything else.

This is why mobile devices at their best serve as extensions of ourselves. They enlarge our abilities to deal with the world around us, with each other, and with the organizations we relate to. This especially applies to companies we do business with.

Right now we are at what I call the “too many apps” stage of doing this. Every store, every radio station, every newspaper and magazine wants to build its own app. At this early stage in the history of mobile development we need lots and lots of experimenting and prototyping, so having so many apps (where in lots of cases one would do) is fine.

But as time goes on we’re going to want fewer apps and better ways of dealing with multiple entities. For example, we’ll want one easy way to issue a personal RFP, or to store and selectively share personal data on an as-needed basis.

We won’t want our health data in five different clouds, each with its own app. We may have it in one cloud, for example, much as most of us currently have our money in one bank. But we’ll also need for that data to be portable, and the services substitutable.

Are there any businesses or services putting VRM tools into action? Anyone making money with them?

A number of companies are making VRM tools. Azigo, Kynetx and MyDex are three that come to mind. A number of open-source projects are also in the works. I’m working with students at MIT and Kings College London on my own development projects (r-button, EmanciPay and related tools). The list goes on.

It’s important to remember that not everything useful in the marketplace comes from companies or makes money. The protocols in the Internet’s suite make no money in themselves, yet support trillions of dollars in economic activity and benefits.

Look up RSS on Google and you’ll get more than two billion results. Dave Winer created RSS (Really Simple Syndication) as a tool to make it easy for anybody to syndicate what they publish. He didn’t do that to make money for RSS itself, but to enlarge the publishing world as a place where many – including himself – could make money and do other good stuff.

The authors of the e-mail protocols we all take for granted (SMTP, POP3, IMAP) just wanted a simple zero-cost way to do e-mail, not to make money with it. And e-mail supports a heap of economic activity as well.

In fact both RSS and e-mail qualify as VRM tools already in use.

If you want to see which way the wind is starting to blow here, look at this tweet from Alexander Ainslie:

Blaine is one of the founders and architects of Twitter. Webfinger is a way to translate e-mail addresses to URLs. This too can be a powerful VRM tool.

You recently hosted a VRM+CRM summit, where you brought folks from both sides together to cross-pollinate. Did you find any common ground?

Well, it was a workshop, rather than a summit, and it was terrific. We had a lot of very productive dialog, and agreement about the need to engage. We also saw clearly that both sides have a long way to go.

What mattered was that both sides were moving toward meeting in an open marketplace where customers roam free and companies see more value in free customers than in captive ones.

Check out Part II of our interview in which we ask Doc about privacy, marketing buzzwords and his contention that “brands are boring.”