Vendor relationship management

Vendor relationship management (VRM) is a category of business activity made possible by software tools that aim to provide customers with both independence from vendors and better means for engaging with vendors. These same tools can also apply to individuals' relations with other institutions and organizations.

The term appeared in ComputerWorld magazine in May 2000, albeit in the context of a business managing its IT vendors. The term was first used in the context here by Mike Vizard on a Gillmor Gang podcast on September 1, 2006, in a conversation with Doc Searls about the project Searls had recently started as a fellow at the Berkman Center for Internet & Society at Harvard University. Vizard saw VRM as a natural counterpart of Customer relationship management. Searls' project then became named ProjectVRM, and has since worked to guide development of VRM tools and services.

VRM tools provide customers with the means to bear their share of the relationship burden with vendors and other organizations. They relieve CRM of the perceived need to "target," "capture," "acquire," "lock in," "direct," "own," "manage," and otherwise take the lead of relationships with customers. With VRM operating on the customer's side, customers are also involved as participants, rather than as followers.

In its description of ProjectVRM, the Berkman Center says "The primary theory behind ProjectVRM is that many market problems (including the widespread belief that customer lock-in is a 'best practice') can only be solved from the customer side: by making the customer a fully empowered actor in the marketplace, rather than one whose power in many cases is dependent on exclusive relationships with vendors, by coerced agreement provided entirely by those vendors."

Doc Searls believes VRM will help create what he calls an intention economy, which he described first in an essay by that name in Linux Journal. There, he writes, "The Intention Economy grows around buyers, not sellers. It leverages the simple fact that buyers are the first source of money, and that they come ready-made. You don't need advertising to make them. The Intention Economy is about markets, not marketing. You don't need marketing to make Intention Markets." In May 2012 Searl's book titled The Intention Economy was published by Harvard Business Press. Searls also sees VRM addressing some of what he calls the "unfinished business" of The Cluetrain Manifesto, which he co-wrote in 1999 with Christopher Locke, Rick Levine and David Weinberger. Here he refers to Cluetrain's preamble, which says "We are not seats or eyeballs or end users or consumers. We are human beings—and our reach exceeds your grasp. Deal with it."

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