For about ten years now I’ve been banging on about buyer-centricity – the concept of a business that exists to work for and on behalf of the individual, helping the individual manage his or her relationship with the world out there, including organisations.

For a long time now, I’ve been working with Iain Henderson and others, including William Heath and David Alexander, to make this vision a reality.

Next week we announce publicly a test of the first working prototype of such a service: The Personal Data Store.

In preparation for this launch, we have published a White Paper (http://bit.ly/b1jvGN) which explores the concept in depth: what it does, how it works, what its implications are. I would be really interested in your comments.

PS: This is what the Press Release says:

30th September 2010

PRESS RELEASE

“The case for Personal Information Empowerment” –

Mydex publishes groundbreaking White Paper
Imagine a world where:

• Instead of signing companies’ terms and conditions and agreeing to their privacy policies every time you do business with them, they sign yours.

• Instead of people spamming you with messages, you choose who communicates with you about what, when – and can turn these communications on and off at will.

• You have much greater visibility and control over what organisations are doing with your personal information.

• You don’t have to remember a different password every time you log on to an Internet site.

• Instead of being tracked and monitored wherever you go online (or offline     for that matter), you collect your own data about yourself which companies pay to access.

• When you’ve got a complicated online form, you can fill it in almost automatically (and safely and securely) with just a few clicks, and automatically save a copy for your own records.

• When you move home or make other changes in your life, you don’t have to phone up or go online with dozens of different organisations jumping through their hoops set up for their convenience. Instead, you can tell them all at one go, simply by registering this change in your own personal database.

• Where governments and organisations can cut the cost of managing data and privacy protection whilst increasing security, efficiency and quality of service to individuals through a controlled exchange of information.

This is Mydex’s vision of the world outlined in its new White Paper: The Case for Personal Information Empowerment – The rise of the personal data store.

In the White Paper, Mydex * proposes that a fundamental shift in personal information management –  where individuals ‘own’ and manage their own personal data – transforms relationships between individuals and organisations with significant benefits for both sides. It is also the catalyst of an entirely new business and service eco-system of personal information management services.

The White Paper provides the context and ‘big picture’ for a unique live service – the Personal Data Store – which will shortly be trialled.

The Mydex service:

• helps people regain control of their personal data – so that they only share it with other people and organisations when they want to and how they want to.

• helps individuals turn their personal data into a personal asset which supports them in managing their lives better and which also saves them time and hassle and may even earn them a bit of extra cash

• uses next-gen internet technologies that transform users’ online experience (say goodbye to passwords, log-ins and cookies, for a start).

ENDS/

http://bit.ly/b1jvGN Mydex     White Paper: The Case for Personal Information Empowerment:                 The rise of the personal data store

* Mydex is incorporated as a Community Interest Company, which means that it is designed as a social enterprise that wants to use its profits and assets for the public good. Mydex’s social purpose is “to help individuals realise the value of their personal data”.

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AlanMitchell 'The Information Age', Buyer centric services, Data, Privacy, vpi

Whenever marketers use the word ‘customer’ or ‘consumer’ they bury themselves deep within an organisation-centric view of the world: these terms are seller-centric inventions.

The only entities that see ‘customers’ or ‘consumers’ when they look at the world are organisations trying to sell stuff. When marketers talk about customers and consumers, they are not talking about the world ‘out there’ as it really exists, they are looking into a mirror reflecting their own internal obsessions back to them.

A customer is someone who buys what we sell. When the organisation looks at ‘the customer’ it is just looking at ‘what we sell’ from a slightly different perspective, a perspective designed to help it sell better. There is nothing wrong with this per se. There is lots to be said for it. But it is a seller-centric projection. You can spend an entire lifetime peering into this mirror without ever seeing what lies beyond.

One way of looking beyond this mirror is to recognise that every product or service that meets a need – i.e. that’s sold – also generates a new need: the need to make a decision.

In the industrial age, meeting this meta-need – the need to make better decisions (and to implement them better) – wasn’t the seller/marketer’s job. There was a division of labour. The job of the organisation was to make a good product. The job of the ‘consumer’ was to make a decision – a choice. And the job of the marketer was to influence these decisions.

This was probably inevitable at the time. Decision-making is an information intensive task and gathering and using information in an organised way was prohibitively expensive.

A tectonic shift

But today that’s changing and we can look at the world through a different lens – that of the decision-maker (the person) rather than that of the decision-influencer (the seller). Once you do this it quickly becomes apparent that this meta-need – to make (and implement) better decisions – is bigger than all other needs (for chocolates, for cars, for current accounts etc) because it embraces them all, subsuming them into the bigger task of achieving what the person (not the seller) wants to achieve.

Person- or buyer-centric services then, sit on the side of the individual, helping the individual achieve what the individual wants to achieve, including managing relationships with many different suppliers more efficiently and more effectively (VRM, or Vendor Relationship Management). The central questions here are, What challenges does the person face when doing this? How to do it better?

The difference between now and say, twenty years ago, is that twenty years ago this person-centric perspective was operationally irrelevant. You couldn’t do anything practical to help people address these challenges. When marketers said ‘the customer is king’, it was just a disguised way of saying ‘the organisation is king’.

Now, however, as information becomes a tool in the hands of the individual, that’s changing. The organisational king is being deposed. This is not about superficial changes in ‘how to achieve the same old marketing goals better’. For example, it’s got nothing to do with arguments about whether it’s easier, cheaper or better to get marketing messages across via social media or mass advertising. It’s a deep, structural, tectonic, remorseless and comprehensive transformation in the relationship between individuals and organisations.

And if you keep on looking in the customer mirror, you simply won’t see it coming.

Alan Mitchell

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This week the UK’s main political parties published their manifestos for the current general election.

The Tories, who are currently tipped to win, have included this sentence in their manifesto:

“Wherever possible we believe that personal data should be controlled by individual citizens themselves”.

The ruling Labour Party has included this promise in their manifesto:

“We will explore how to give citizens direct access to the data held on them by public agencies, so that people can use and control their own personal data in their interaction with service providers and the wider community.”

Of course we all know about politicians and election promises, but policy-wise this is a momentous breakthrough. It shows that in some pivotally important circles, the arguments for the old organisation-centric ways of dealing with personal/customer data have been lost and that a new, much more person-centric approach has been recognised as the way forward.

There are many ways this could go horribly wrong and we will have to work hard to make sure they don’t. But either way, this a momentous breakthrough – a decisive departure from the direction we have been travelling for the past 40-50 years.

It’s evidence that the person-centric paradigm is truly taking hold.

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Last night, eloquently supported by my colleague William Heath, I gave a master class on Volunteered Personal Information for the IDM (Institute of Direct Marketing).

My concluding summary was:

•    We are in the midst of a once-in-a-century tipping point in the information flows in our society: from ‘top down’ (organisation to individual) to ‘bottom up’ (individuals to organisations and each other).
•    Marketing as we know it was constructed around the assumptions and operational requirements of ‘top down’.
•    Most of its current problems and constraints are a by-product of this heritage.
•    In the course of organising and managing their daily lives – making and implementing decisions – individuals generate huge amounts of new, rich, accurate, timely information about who they are and what they want..
•    An emerging industry of Personal Information Management Services (PIMS) is making it possible for individuals to capture and share this information.
•    For this information to be shared on a mass scale however, three new ‘rules’ of personal data must be accepted: personal information is the person’s; the individual must have control over what information is shared with who, for what purposes; the individual has to derive a genuine benefit from the information sharing process.
•    Once these rules have been accepted, multiple different types of VPI will begin to flow.
•    Separately and together this VPI can help organisations cut guesswork, waste and costs, identify customer needs better and focus available resources on truly adding value: a ‘VPI value explosion’.
•    Every organisation needs to develop its own VPI strategy.

If you want to find out more, get in touch with me at Alan.Mitchell@ctrl-shift.co.uk and I will send you a shortened version of my presentation.

Alan Mitchell

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‘Customer Relationship Management’ (CRM) can never deliver its hoped-for benefits because it’s constrained by a series of intrinsic flaws. The emerging alternative for organisations is to rely less on data collected about customers behind their backs and outside of their control, and to rely more of data volunteered by customers under their control.

Of course, this requires all sorts of changes in attitudes, processes, mechanisms, even business models. But my prediction is very simple. Over the coming five to ten years, organisations that get up to speed on this have a good chance of prospering. And those that fail to ‘get it’ will be left behind, hamstrung by two pretty damaging weaknesses: reduced ability to deliver customer value, and reduced customer trust.

I’ve written more about this for MyCustomer.com here.

The research on which this article is based is here.

Alan Mitchell

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I’ve written an article on Volunteered Personal Information. You can read it at http://www.marketingmagazine.co.uk/news/926139/Reinventing-marketing-Alan-Mitchell-asks-marketers-prepared-era-volunteered-personal-information/

Alan Mitchell

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Two  welcome bits of news this week from the UK.

First, BT has distanced itself from Phorm, the behavioural targeting advertising company that stalks individuals’ usage of internet sites to deliver more ‘relevant’ advertising to them.

In one sense, there is nothing wrong with the idea of building a profile of an individual’s web-surfing habits and using that information to serve up relevant information. Where Phorm went wrong was that it tried to do it behind individuals’ backs, without their knowledge or permission.

Now. Turn the Phorm proposition on its head, so that individuals use exactly the same technology to build up a profile of their own activities, and are then able to bundle bits of the profile into packages (‘this is the research I have done for my new holiday’, ‘this is the research I have for my new car’) and to selectively disclose this information to organisations they want to do business with and trust.

Hey presto! All of Phorm’s privacy invasion issues disappear as the technology becomes a tool of consumer empowerment. And advertisers actually get much better value from it!

When, oh when, will marketers and advertisers see that their current adversarial, targeting mindset is precisely why their initiatives are so inefficient, ineffective and (as with Phorm) counterproductive?

The second bit of news is the Tories’ announcement that they might turn to companies like Google or Microsoft to help build personal health records, as opposed to the current approach of centralised NHS (i.e. organisation-centric) medical records that has been a dismal failure and cost the citizens of this country £18bn so far.

As the Tories are likely to be the next government, this is significant, which is why The Times carried a lead front page story on it. Unfortunately, The Times got the wrong end of the stick (they are still working to an old and out of date political agenda). The issue is not who holds the data – state organisations or private sector organisations – but who controls the data: individual or organisation.

The Tories have woken up to what Phorm hasn’t – The Times reports a Tory spokesman talking about the need for people to ‘own’ their own data. Is Google or Microsoft the right organisation to facilitate this?  Not in my view, but then I’m biased because of my involvement with Mydex whose mission in life is to help individuals do exactly that.

But the key point is this. It’s now becoming clear that the issue of helping individuals ‘own’ and manage their own information is moving rapidly from the ‘far out’ fringe to the mainstream.

About time too!

Alan Mitchell

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Fascinating discussion over dinner last night with Drummond Reed, Bill Washburn and my colleagues Iain Henderson and William Heath from our personal data venture Mydex (www.Mydex.org).

We had just flown in to San Francisco for the VRM meeting, so were jet lagged and hardly sparkling. But Bill made the comment that the real potential of the internet was not being realised because of a pervading lack of trust. This is interesting because previously, trust-issues have not created barriers to our ability to realise the full potential of new technologies.

Metallurgy, steam power and electricity transformed the world in many ways, but the general rule of thumb was, in good old entrepeneurial capitalist style, ‘do anything you like with it, so long as you don’t break the law.

Computing technologies started out much the same, transferring that ‘do what you can!’ motto from matter and energy to information. So, in the industrial age we did lots of fantastic new stuff with matter and energy, and then we had an information age where we started doing lots of fantastic new stuff with information. With the internet however, this no holds-barred approach to information creates problems – because I don’t necessarily want you to start doing fantastic new stuff with my information if it’s fantastic for you and awful for me.

The power of trust

When the key issue is no longer just the technology, but the relationships surrounding that technology, you have a different type of problem. You need a parallel set of innovations in ‘social technologies’ – new ways of bringing people together to create new and better outcomes.

Perhaps the last time we had a problem of a similar scale was with the growth of trade. The more trade you do, the clumsier and more constraining barter becomes. You need something to oil the wheels. The ‘obvious’ answer is money, but for many years it was not an obvious answer at all.

Money requires a huge leap of faith. You give somebody something of real value, and in return, they give you a worthless token. The only way you can then retrieve the value you have given away is by persuading someone else to part with something of real value in exchange for your worthless token.

It’s absolutely crazy, once you stop to think about it. But as long as people fail to make this gesture of trust, the prevailing lack of trust acted as a brake on the economic potential of the trading system. And to build the trust that was necessary, a whole set of new rules, institutions, practices, safeguards, social rituals and relationships, norms and expectations, divisions of labour and so on had to be developed.

As Drummond pointed out, one of these institutions is banking, which is an entire global industry built on ‘meta-trust’. First, you make a leap of trust in accepting money in exchange for real value. T hen you make a second leap of trust by giving it to somebody else to look after! With no real recourse if they decide not to give it back! Craziness piled on top of craziness. So, once again, we had to develop a whole new set of rules, regulations, practices, institutions etc to deal with this trust problem – and we’re still struggling with how to do it, as the credit crunch shows.

Bill’s point was that we’re now facing the same sort of problem with the sharing of personal information on the Net.

The old assumptions about ‘if you can, do anything you like with it within the law’ may work brilliantly with new inventions like electrical machinery. But it creates a nightmare of mistrust and lost economic potential when it comes to personal information. And that’s basically what’s happened with the last 50 years of centralised corporate data gathering: the underlying assumption in the corporate world was ‘if we can gather information about you, the customer, it’s ours to what we like with’. Just imagine if banks said that to us in relation to our money!

The next leap

That’s what Mydex in particular, and VRM more generally is about. It’s about creating the new ‘social technologies’ of trust to allow personal information to be shared the way we share money. If all the right conditions are there – if it’s a mutually acceptable exchange in conditions of mutual trust – we hand over money to somebody else without a thought – and by doing so we contribute our little bit to the larger public good of economic activity. We help unleash its potential. But if those conditions are not present, then our immediate attitude is ‘No Way!’. And the economy’s potential is constrained.

So what are the right conditions – the rules, institutions, practices, safeguards, social rituals and relationships, norms and expectations, divisions of labour – necessary to unleash the potential of personal information sharing in a networked world?

That’s a huge question which we need to tackle as a society. But our bet is that one necessary building block is to create the distinction with personal information that banks did with money.

You hand your money over to a bank for safekeeping. But that does not mean the bank can do anything it likes with it. You may give the bank permission to do some things with it, such as lend it out to other people. But if so, they have to pay you interest for it. You share in the benefit of sharing its value.

Personal data banks like Mydex create the same distinction. You use the personal data store to keep your information in a safe place that’s also easy to access. Mydex also allows this information to be shared, but only in ways that you choose, agree to, and get some benefit from.

Personal data stores are certainly not the whole solution to the dilemma Bill raised. But I’m pretty sure they’re a part of it.

Alan Mitchell

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As far as I know, ‘What Would Google Do?’ by Jeff Jarvis is the first book to talk about VRM. When I started reading, I was excited. Jarvis was telling it like it is – clarifying and explaining the vast changes now under way.

His critique of old-style corporate mindsets is spot on. “Listen to the rhetoric of corporate value,” he writes. “Companies own customers, control distribution, make exclusive deals, lock out competitors, keep trade secrets.”

All these points of ownership and control are now exploding, he points out. The new rule is “Give the people control and we will use it. Don’t and you will lose us”. Value lies not so much in the product or service companies sell, but in the tools they provide for individuals to use, he explains.

This is not just semantics. It’s a real shift. It’s about providing individuals with platforms that enable them to build their own value; that “help users create products, businesses, communities and networks of their own”. These words – enable, help, build and create – are important. In this new world, the individual is no longer just a ‘consumer’ or a ‘customer’ of the corporation. He and she is an active, creative, equal partner in the process of wealth creation.

Fantastic stuff, and it’s really helpful to have it explained so clearly.

The more I read, however, the more concerned I got. What is the alternative to yesterday’s centralized, controlling business?

Well, it turns out that Jarvis has only one, one-size-fits-all answer. Here’s how he describes the rules of the new networked ‘link’ economy. “First, you must produce unique content … Second, you must open up so Google and the world can find your content … Third, when you get links and audience, it is up to you to exploit them, usually through advertising.”

Oh dear. Jarvis’ previous career was in ad-supported content publishing and guess what? Despite frantic, breathless huffing and puffing about how revolutionary and different the new world is, it turns out to be almost exactly the same as the old one – all about ad-supported content publishing. The only thing that’s different is that this time the ads are delivered a different way (via Google) and the content is (sometimes) produced by different people.

Jarvis then applies this vision basic one-size-fits-all vision to everything he touches.

For example, he cites the Cluetrain Manifesto countless times in the support of his arguments. But (Doc, please tell me if I’m wrong) I thought the whole point of the Cluetrain Manifesto was that if you are having a proper conversation both sides are in a much better position to navigate their way to value without advertising.

By the end of the book I was seething with irritation. Right now, there is a particular form of hype coming out of silicon valley – let’s call Hype 2.0 – that is singularly unhelpful. Jarvis’ hype gets three things wrong. They are intimately connected.

First, he has an ‘either/or’ attitude towards atoms versus bits. Time and again, he is sneeringly dismissive of the real world of material goods, and of services provided using material infrastructure. “Stuff is just so last century. Nobody wants to handle stuff any more,” he declares. “Many industries are saddled with slowness because they are trapped by atoms and complexity.” “Manufacturing is expensive, vulnerable to commodity pricing, labour-intensive, weighed down by gigantic benefit costs, and competitive. That’s the tyranny of atoms.” And so on.

Fact is, we are material beings living in a material world. I’m sure Jarvis would be the first to complain if he could only drink Googlejuice with his breakfast; if he couldn’t catch a plane to his next speaking engagement and sleep in a comfortable bed with nice cotton sheets in a safe, secure hotel afterwards; and if he didn’t have a boring old atoms-based computer to access the Internet.

This is not just about rhetoric. It’s about economics: the real opportunity in what’s going on right now is not the ‘either/or’ of atoms or bits but the ‘and’: how better use of information can help us strip away waste in material production and distribution, attack its complexities, improve its value and so on.

This links to the second flaw in Jarvis’ argument. For him, the new world is all about ‘content’. The opportunities individuals now have to create their own, new content. Opportunities to co-create content via communities. Opportunities to share content. Opportunties to search for and find the content you want.

These are all fantastic things. But they are less than half the story. They ignore other uses of information: for example, the critical role it plays in organisation and coordination.

There’s a saying in the boring old material supply chains that Jarvis dismisses as “so last century” that “uncertainty is the mother of inventory”. In other words, if you don’t have the right information about who wants what, when and where, then you are ‘saddled’ (to use Jarvis’s term) with guesswork and just-in-case operations.

In fact, without the right information about the who, what, when and where of demand everything you do – production, distribution, communication – has to fall back on wasteful guesswork and ‘just-in-case’. And at least half – probably much, much more – of the potential value of the web is its ability to help us deal with these ‘tyrannies’ of waste. What Jarvis misunderstands is that these are not “tyrannies of atoms” as he calls them – they are tyrannies of poor information.

This leads to his third flaw. In his obsession with ‘content’ and cool new things that involve content such as communities and co-creation, Jarvis misses the point of VRM.

Wave 1 of the information revolution resulted in an explosion of ‘top down’ flows of information: cable, satellite, publishing on the web, etc. These were the first fruits of digitalisation.

Wave 2 made sideways or peer-to-peer information sharing possible. And thanks to Google, it gave us new tools to help us navigate our way through the tidal wave of top down, published content to find what we wanted. Wave 2 is very ‘content’-focused. It’s what Jarvis focuses on.

It’s Wave 3 however, where the real fruits of the information revolution finally pass into the hands of individuals. Under Wave 3 individuals will be able to build their own databases – to manage information on their own terms for their own purposes – and to use this information to articulate their own needs, preferences, priorities and so on to the marketplace. Wave 3 reverses commerce from ‘top down’ to ‘bottom up’ and right side up. Yes, this third wave has important content elements (as with atoms and bits, it’s not either/or) but it’s just as much about personal analytics, organisation, coordination and logistics.

The next economic revolution lies exactly in the three bits Jarvis overlooks: the importance of the connection between atoms and bits, the fact the web is not just about content and advertising, and that it is not just about peer-to-peer information sharing – it’s  also enabling personal information management and volunteered personal information.

The real potential of VRM and buyer-centricity will be unleashed when we bring these three elements together, as we would bring chemicals together to create an explosive reaction.

Alan Mitchell

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The Financial Times kicked the new year off with a long editorial about ‘the media industry in an internet age’. The editorial discussed the spreading ripple effects of digital downloading on the music industry, and then turned its attention to newspapers, to note that people will always want information that is “researched, scripted and edited in the traditional way”.

“There will be more competition and uncertainty in the new world,” it concluded, “but some things will be the same”.

Sameness and difference. We humans seem to have incredible difficulty dealing with these concepts. We can’t seem to stop ourselves trying to pigeon-hole things into neat boxes. One thing is ‘revolutionary’, we say. But another thing is merely evolutionary; more of the same. We then argue endlessly about what should go into which category.

But the real world around us doesn’t recognise these distinctions. Every revolution has its elements of continuity. And most evolutionary change has increasingly ‘revolutionary’ effects as it accumulates over time.

The Bolshevik Revolution in Russia was a real revolution, for example. An entire social class and system of governance and administration was overthrown. A new way of running things came into being, with new people in power. For most of the ensuing century we were all in thrall to its knock-on effects. Yet, looking back, we can also see strong elements of continuity. The Soviet system revolved around more of the same. More industrialisation, more electrification, more wealth creation via the mass production of standardised units – just as Fordism did across the ideological divide. It was the sameness, not difference, that triumphed in the end.

Meanwhile the falling cost of computing power and our increasing ability to distribute digital information at low cost has been an evolutionary affair, starting over fifty years and trundling on ever since. There are some significant milestones, but it’s difficult to pinpoint any defining turning points; only symbolic markers such as Apple’s launch of the personal computer. The same trend towards ‘democratised information’ has simply continued, with accumulating effect.

The FT was forthcoming about these accumulating effects in its comments about the music industry. What bundles of value are made available (e.g. single songs or complete CDs), how much we pay for them, how we pay for them, how we access them, using what tools, and how we use the resulting value bundle – all of these things have changed.

Like the FT, the music industry can claim that things are still the same. We are still listening to music. Likewise, there will always be demand for well-researched, edited information. But if I was the FT’s owner, Pearson, I would still be quaking.

Real value-creating businesses do not revolve around abstractions like ‘music’ or ‘researched, edited information’. They revolve around the nitty-gritties: the exact bundle of value, how it is distributed, purchased and used, at what cost and for what revenues: all the things that are increasingly not the same. The market for quality information may well grow. Whether it grows within the framework of an institution like the FT is a very different matter indeed.

So why go on about this silly editorial? Because it sums up much of the debate surrounding buyer- or person-centric commerce. It’s often said that the printing press was one of the most revolutionary (there we go again) of all inventions because it democratised knowledge and learning. Well, ‘the information age’ is extending that democratisation to other forms and uses of information too: to the information that is used for planning, organisation, administration, coordination, communicating, transacting and so on. To the information that lies at the heart of every business, in other words.

The falling costs and increase ease of all these different aspects of information processing mean that increasingly, they are becoming tools in the hands of individuals instead of remaining a monopoly preserve of big institutions, as they once were.

Thanks to this accelerating, accumulating ‘evolution’ we are increasingly able to reconfigure the bundles of value, the means of distribution and access (and associated costs, revenues, payment mechanisms and other forms of value exchange such as information and attention trading) around the specific circumstances and needs of individuals.

Instead of starting with ‘a supply chain’ and then going looking for ‘a market’, we can start with an individual and his needs and wants, and then go looking for ways to address them. Because we have the information infrastructure to do so, at a viable cost.

Like the FT, you could insist that even so, “things will be the same”. Individuals will still want to eat, find shelter, stay healthy, move from place to place, and so on, just as they have always done. Just as they have always liked music, and valued quality information. Absolutely. But exactly how they do all these things is becoming increasingly person-centric.

Is this evolutionary or revolutionary? Is it more of the same? Or different? It doesn’t really matter which pigeon-hole you choose. What does matter is that the opportunity is real.

Alan Mitchell

6 January, 2006

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