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The 21st Century Battle for the Future of MR has begun: Empowered Consumers Versus “Darth Data”

We look at our shiny new MR tools without paying proper attention to what aspects of the marketplace they are meant to enrich. To answer that question, let’s zoom above the trees and take a look at the battle just starting to take shape in the forest below.

 

By Kevin Lonnie

As a cottage industry, we often have trouble seeing the forest through the trees.  Traditionally, MR is meant to solely support the marketing function, but I think that describes only a portion of what we typically refer to as market research.

POP QUIZ:  What is the difference between market research and marketing research?  HINT:  They are mutually exclusive

ANSWER: Marketing research is concerned specifically about marketing processes, while market research is concerned specifically with markets

If you didn’t know the difference, it backs up my belief that MR is a confusing and outdated moniker.

Which brings me to my point, we look at our shiny new MR tools without paying proper attention to what aspects of the marketplace they are meant to enrich.  To answer that question, let’s zoom above the trees and take a look at the battle just starting to take shape in the forest below.

Forces are coalescing to support either the demand side or supply side of the new marketplace.  And the outcome of that battle will determine the role of MR for this new millennium.

Interestingly enough, there’s a good chance that MR will once again fracture, but this time it won’t be along “touchy/feely” qual versus “stat driven” quant.   This time MR will fracture along what side of the marketplace (e.g. the customer centric demand side versus the manufacturer driven supply side) it seeks to service.

When we look at New MR, we see tools that are perfectly suited to support both sides of the marketplace.

To empower the customer driven demand side, we have new collaborative tools, ones that allow consumers to co-create.  To some degree, this represents the next generation of MROCs as they evolve from passive listening stations to truly interactive and empowering customer ideation centers.   As MROCs add Crowdsourcing and predictive market modules to their platforms, they are perfectly suited to support the demand model.

Proving ourselves to be equal opportunity, New MR is also well suited to help drive the manufacturer centric supply side of the marketplace.  In particular, Big Data integration and text analytics may become the primary information tools in capturing & retaining customers.

But do customers really want to be captured and retained?

My thinking on this impending conflict has been influenced and inspired by Doc Searls, author of “The Intention Economy: When Customers Take Charge.”  Now Doc Searls is clearly an advocate for the empowered consumer in a new demand focused economy.   In fact, he runs “Project VRM” at Harvard University.

What the heck is VRM you might ask?  VRM is a relatively new idea.  It stands for “Vendor Relationship Management.”  Essentially, it flips the CRM concept on its axis and places the power position with the customer.

Wikipedia: VRM relieves 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.

VRM is based on the theorem that we are on the cusp of a new marketplace paradigm, and for the first time, it will be the demand side and not the supplier side that controls the shots.

Mr. Searls argues that the only way we as consumers will be fully empowered is by making us both independent of controlling organizations while at the same time being better able to engage with them.

Below are some of the basic tenets of VRM:

  • Works to support the individual demand side (Power to the People!)
  • Customers as individual, empowered human beings
  • Personal liberation, free to decide
  • Personal tool kit of trusted service firms
    • Changes you make once will automatically flow to all trusted members of your personal service teamo
    • No more silos

In contrast, Mr. Searls is not a fan of the traditional supplier model.  He feels its day has passed.  For the 1st first time, the fundamental tenet of mass efficiency (think of Henry Ford’s assembly plant for the Model T), is out of synch with a new customized client driven marketplace.

And if you asked Doc Searls to name the Darth Vader of the supply marketplace model, he would likely cite Big Data – (“Darth Data”).  In his view, Big Data allows corporations to secretly gather personal behavioral data and usage habits.  Those loyalty cards we carry around are a good example of using stealth powered technology.

Basic principles of a supplier driven marketplace include:

  • Everything must be scalable
  • Customers only get to choose their captors (e.g. wireless carrier)
  • Customers as targets, populations, segments
  • Customers are to be observed
  • Customers are to be acquired
  • We know what customers want better than they ever will

If Professor Searls is right and we are on the cusp of customers taking control of the marketplace (after all, they’re the ones with the money to spend), then clearly MR tools based on empowering customers through co-creation and collaboration will carry the day.    That is not going to happen overnight and we could see a gradual migration away from passive listening tools (e.g. Big Data) to customer empowerment tools.   At the end of the day, the companies that will flourish will be the ones in tune with customer needs.

As for myself, I think the fundamental questions become:

  • Do we wish to empower or capture our customers?
  • What are the terms of the new marketplace relationship?
    • Is it based on mutual empowerment or are we to view customers as acquired goods?
      • If we choose the latter, it surely doesn’t promote a common or sustainable purpose.

It is the smart choice for organizations to choose an empowered relationship with their customers for the simple economic reason that it represents the best sustainable option.

This POV is aptly defined by Doc Searls himself:

“Every one of us is naturally wild, free and untranslatable. This is why no computer, no algorithm, no electronic carpenter equipped with “big data,” can sweep us within the orbit of its compass. Their human operators will keep trying, of course. And we’ll keep confounding them — until we prove more valuable free than captive.”

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5 Responses to “The 21st Century Battle for the Future of MR has begun: Empowered Consumers Versus “Darth Data””

  1. Steve Needel says:

    August 18th, 2012 at 10:17 am

    If I’m reading Kevin correctly (and a most lucid arguement, Kevin) everything hinges on the concept of “the empowered consumer”. Wendy Gordon first talked about this in a 2007 ESOMAR speech – the consumer pulling information rather than having information pushed. The problem is, there’s no evidence of the empowered consumer. OK, sure there are some out there, but the numbers appear to be sufficiently trivial that it just doesn’t matter to us in MR.

    Co-creation is rarely used successfully – apparently you have to spend millions in TV advertising to get people interested in the next flavor of Mountain Dew or Doritos. Social media relies on “push” from “friends” or it will never become a viable message vehicle – read Joel Rubinson’s work on why “likes” don’t matter much. Behavioral Economics tells you this idea of an empowered consumer is silly – why would anyone choose to engage in System 2 thinking when System 1 will work just fine (sorry, I’m reading Kahnemann right now).

    There is no revolution, there no war, the apocalypse is not happening, and we are not approaching Armageddon or Ragnarok.

  2. Kevin Lonnie says:

    August 20th, 2012 at 3:26 pm

    First of all Steve, thanks for the comment and the “lucid argument” compliment. I genuinely appreciate that

    However, it’s pretty clear that you’re not buying what I’m selling. And although I am naturally drawn to a bit of hyperbole, I don’t think I brought it up to “Armageddon” level. I’ll save that for a future post.

    I appreciate your viewpoint that there is no historical basis to support the “consumer empowered” paradigm shift, but I don’t feel we will ever see radical changes by relying on our rear view mirror.

    It will take a true shift in corporate philosophy to enter into a reciprocal arrangement with their customers. Why would they do that? Only if they feel the chances of success are greater.

    I agree that the consumer is a poor choice to serve as a corporate visionary, but why not entwine them in the creative process. By working together in an iterative fashion, the chances for success should improve.

    As for the current “system 2 thinking” of simply supplying customer data to corporate decision makers, I think the supply chain of that data will quickly change from surveys to big data analytics. To some degree, I think big data will put traditional MR data collection out of business. I also feel that a move to big data will place a greater emphasis on stealth data collection techniques for manipulative purposes, but that’s a different argument.

    Hyperbole aside, I don’t think the consumer empowerment movement will be a significant factor to MR in the next decade (so much for Ragnarok.) MR Firms that specialize in what all this data means (regardless of the source) should do quite well.

    So to sum it up Steve, I agree with you that consumer co-creation to date has been spotty at best. Still, I’m choosing to hitch my sails to the consumer empowerment (VRM replacing CRM) argument because I think that’s where the next opportunity (A.K.A. money) will be for MR firms.

    The natural extension of holistic customer understanding is to move consumers further up the food chain and allow them into the creative kitchen.

  3. Lucas Borja says:

    August 23rd, 2012 at 8:42 am

    I agree with you Kevin in that there is an inevitable paradigm shift occurring in the marketplace, and if I would bet on where this shift is heading, then I would also place my money on an empowered consumer.
    Where I might be a little sceptical is the plane on which this shift would play out for MR. It seems to me that the assumption is that the type of data being exchanged would remain pretty much the same while the way the data is obtained will change radically (i.e. from corporate collection to unsolicited consumer input/participation). But the reality is that as a consumer (and I make reference to Steve’s Doritos Flavour example above) I don’t know what the taste of Doritos are or should be, so my input on this matter is pretty unreliable to some extent.
    My view is that an empowered consumer will not try to participate in an already established production line and contribute only what is being asked of h(er/im). An empowered consumer would actually try to take over the entire production process, or at least aim to feel as having control over it, and then would ‘act’ to obtain whatever it needs to consume. Now, data on these consumer ‘actions’ for the purpose of creation and consumption (rather than data on a preference such as food flavour) is in my mind the type of data that will define the new manner of researching the consumer.
    Successful organizations will become part of the consumer’s production line and MR can support them with insights on where in the consumers process they would add the most value. MR will continue to observe the consumer, but as you point out, we might now want to place them in an environment that entices participation and action, not for idea generation, but for a fully finished ready to consume product.

  4. Kevin Lonnie says:

    August 23rd, 2012 at 10:17 am

    Thank you Lucas for your insightful feedback! I think these forums work best when we use them as an opportunity to better articulate a viewpoint, rather than simply defending the initial argument.
    And I feel that you & Steve have helped to better articulate my thoughts. I especially appreciated your thinking on the role MR can play for the empowered consumer. If we accept the framework of VRM and that the consumer wants to only deal with companies that are consistent with their individual brand needs, then MR could take on a vital role to act as a facilitator in the process. I could see some very sophisticated segmentation models that would allow the provider to know the level of interaction each consumer feels is required. In other words, at what point in the process and to what degree does the consumer need to interact with the brand in order to establish some level of reciprocity? And I’ll define that reciprocity agreement as the point where the relationship becomes sticky and a sense of quid pro quo is achieved.
    However, I will take issue on the point that consumers should be banned from idea generation and relegated to “fully finished ready to consume products”. Why can’t the consumer act as a muse to help stimulate creativity? Too often, we relegate the consumer’s voice to the caboose. Again, I’m not suggesting we turn the keys over to the consumer and let them drive the car, but maybe we could at least let them into the front seat. As product/brand managers ideate, why not invite consumer feedback in an iterative fashion from the get go. Customers may be able to offer tweaks, suggestions or even “out of left field” ideas that could greatly increase the chances for success. So my argument is not for consumer creation as much as it is for consumer contribution.

  5. ESOMAR Congress Was A Pivotal Event For MR | UpSearchMR says:

    September 19th, 2012 at 7:29 am

    […] the various mobile/social/e-commerce platform providers and consumers,  most likely through a VRM type consumer data bank model. It is the role of trade bodies to understand regulatory issues as they […]

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