Monday, February 23, 2009

Push and Pull Marketing, CRM and Social Networking

What is Push and Pull Marketing?

Marketers often talk in terms of 'Push Marketing' and 'Pull Marketing' when describing their marketing communication. For the rest of us this is what they are talking about:

To summarize, if we think of a cola manufacturer who sells their product through independent cafes, if I give the cafes a larger margin on each can of cola, the cafe will 'push' the product more. If I do a promotion where every can of cola has a chance to win $10,000 and promote this on bill boards etc. the customer will demand the cola from the cafe.

So, at a really high level, 'Push Marketing' is where the seller tries to convince the customer to buy the product whereas 'Pull Marketing' is where the customer tries to convince the seller to sell the product to them.

The distinction gets murkier when there is no intermediate distributor as any direct conversation with the customer will have push and pull elements. For example:

Salesperson: If you buy today, you get 50% off (push in that the seller is trying to convince, although conventionally defined as pull as it has a 'call to action' for the customer)
Customer: I definitely need one but it has to be white. I need you to sell me one in white at the same discount (pull)
Salesperson: OK I'll sell you one in white at the discount, if you also buy a second one at the same price (push/pull)
Customer: Deal

CRM as a Push Marketing Tool

CRM systems are primarily built for push marketing. Here is why.

The traditional foundation of CRM systems is Sales Force Automation (SFA). That is, it manages the activities of the sales folk and the resulting sales opportunities generated therein. As time passed, CRM systems incorporated Marketing and Support modules. Generally the marketing module is focused around mass communication (mail merges) to the contacts in the CRM system and the support module was there to allow the support staff to manage their activities in regards to resolving customer issues once the sales team had sold a product to a customer.

The big problem with this is the CRM system is focused on who the individual users immediately speak with. In our cola example, the sales folk speak to the cafes. They populate the database with cafe contacts. The marketing team, if they are to use the contacts in the system, will be focused on push marketing, as defined above. There is nothing stopping the marketers engaging in pull marketing but the CRM system is going to be of limited help except in maybe managing high-level costs and activities. 

Support users are more interesting. In the case above, the support team, presumably would be speaking primarily to cafe owners but it is equally possible that they would speak primarily with customers, depending on the type of business. For example, in the case of a whitegoods manufacturer, the people phoning them up could well be the end user rather than the department store.

The support users will therefore be populating CRM with either the same cafe contacts we already have or end users who have already purchased and had reason to call the support desk. There is the possibility of pull marketing here as the marketers could target the end users in the CRM system the support staff have entered but it is also fair to assume that the most satisfied end users and therefore those most likely to be upsold to would be those that have not contacted support to resolve an issue and are unreachable through the CRM system. 

We could market to the 'unknowables' as a whole, but this is the antithesis of CRM where the relationship is king.

How Can We Make CRM Systems More 'Pull Friendly'?

Traditionally, it would have been very hard to achieve this. The body of unknowable end users would be difficult to access without a distributor giving up their customer lists. While this is possible it involves all sorts of privacy and logistical implications.

However, in the new world end user buyers advertise the fact on the internet all the time and communicating with them directly or indirectly could not be easier. In a world of forums, blogs, twitters, facebook groups and so on we not only have individuals telling us what they have bought, their thoughts on it and what they would like to buy next, they also cluster together to share thoughts making them an even easier target.

These conversations, interactions and clusterings is what Brent Leary refers to as 'Social CRM': has started to get the idea on how to tap this with their service cloud:

but this is merely support-focused, not sales-focused.

Imagine the potential of tapping into all the conversations going on regarding your product. 
  • Who is 'product-curious'? 
  • How to improve it? 
  • What products work well with it? 
  • What the next generation of it should contain? 
Imagine doing the same for your competitors products. Its all out there but requires effort to sift through, manage and interact with.

CRM needs to be able to tap this limitless supply of information, present it to users in a palatable format and allow them to interact with it. By my thinking, a good place to start would be with products. Using the products as a 'hook' the CRM system could fish for all related conversations and relationships. A nice tree view of conversations of various forms could then be presented to the user. Additional key words could then refine further depending on the requirement and eventually the user could trawl through, looking for gold.

Only when CRM is managing and interacting with both the conversations had by contacts directly with the organisation and those had without the organisation will CRM be truly managing customer relationships.

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