VRM seeks to address the imbalance of power when it comes to customer and vendor relationships. Traditionally, vendors collect and hold information about a customer, and use it to get the most out of their relationship with the customer. For many vendors, “get the most out of the customer relationship” translates to making the most revenue for the lowest cost from a particular customer or group of customers. VRM notes that customers can be far better custodians of data that is very useful to vendors. For example, Amazon.com collects data about a customer’s purchasing and browsing history, and makes recommendations based on that history. However, the customer possesses information that Amazon.com doesn’t: e.g. the customer knows which books were purchased as gifts and therefore are not indicative of personal
preferences.
VRM seeks to address the imbalance of power when it comes to customer and vendor relationships. Traditionally, vendors collect and hold information about a customer, and use it to get the most out of their relationship with the customer. For many vendors, “get the most out of the customer relationship” translates to making the most revenue for the lowest cost from a particular customer or group of customers. VRM notes that customers can be far better custodians of data that is very useful to vendors. For example, Amazon.com collects data about a customer’s purchasing and browsing history, and makes recommendations based on that history. However, the customer possesses information that Amazon.com doesn’t: e.g. the customer knows which books were purchased as gifts and therefore are not indicative of personalpreferences.
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