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A friend recently directed me to an argument that flared up between Graham Hill and Doc Searls on the subject of Vendor Relationship Management (VRM) and Doc Searls’ VRM Project. Graham’s critique is essentially existential. He claims that VRM can’t exist, and if it does exist, it’s irrelevant and a giant step back for commerce and the consumer.

Graham makes a compelling case by dint of its organization. He outlines a dichotomy between CRM and VRM. Either customers own the data or companies own the data. If customers own the data, it would be subject to four claims. And he strings up VRM as a straw man to be invariably dismissed. Unfortunately, the dichotomy is false and the claims don’t match subject — VRM.

But that’s not so much the issue. Instead, it reveals two implicit claims: consumers have no interest in their consumption; consumers and their vendors would not benefit from the tools to organize and act on that interest.

Let’s start with the dichotomy – the existential question. Is VRM impossible?

Rather than companies owning huge databases of customer transaction data which they can mine for their own advantage, customers should take control of their own transaction data and selectively release it to companies when they want something from them.

For a customer to take control of their own transaction data doesn’t require companies to give up control. Isn’t this what ERP systems do when they manage and help negotiate with suppliers? That relieves us of the either/or. Lo — VRM can exist, and it can exist if we have the tools to harvest transaction data, understand it and act on it.

Moving to the fallacies. First, the data is already out there. I receive credit card statements, mobile phone bills, and other statements that give me the data. Second, of course people want control of the marketing sent to them. Does that mean that they don’t want the transaction data? No. Third and fourth, these arguments could be parsed as non sequiturs, bundled in a false dichotomy and finished by begging the question.

Starting with the position that VRM can’t exist, Graham proceeds to say, if it were to exist, it wouldn’t have access to data. If it did have access to data, people wouldn’t want it. And if VRM cleared these hurdles, it would do nothing less than attempt to supplant the free market system by way of managed markets and the principled dissolution of Apple as we know it.

The distillation proves extreme, but it’s revealing. It uncovers the two claims driving Graham’s post: consumers have no interest in their consumption; consumers and their vendors would not benefit from the tools to organize and act on that interest. VRM is a bet that these are both false. If they are, there’s interest and an economy, and that could be a business.

First, consumption. People are passionate, particular, and opinionated about the stuff they buy. We call those people enthusiasts, and we can find them in the Makers Mark Ambassadors program, Ducati owner groups, and even fanboy sites for the media they consume. They might obsess over any one step in the process: finding, acquiring, managing or consuming — or, all of the above. But people are interested in their consumption.

Second, organization, or VRM. Consumers benefit from tools to manage their vendors. comes to mind, and the Mint / Wasabi effort looks like an early attempt to better understand spending through parsing credit card data. The problem with these is that they may or may not make money.

So yes, the bet is right, but the question remains: does it make money?

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