Today’s guest blogger is CRM MVP Leon Tribe who is a Microsoft Dynamics CRM consultant based in Sydney, Australia. You can read more by him at his blog Leon’s CRM Musings.
In this article I will attempt to explain why traditional CRM systems only capture a fraction of the customer activities regarding your products and what CRM systems need to do to truly manage customer relationships through leveraging social networking.
What is Push and Pull Marketing?
Marketers often talk in terms of ‘Push Marketing’ and ‘Pull Marketing’ when describing their marketing communication.
To summarize, if we think of a cola manufacturer who sells their product through independent cafes, if they give the cafes a larger margin on each can of cola, the cafe will ‘push’ the product more. If they 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 (pull).
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)
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 team 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 CRM users immediately speak with. In our cola example, the sales team 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, engaging the cafes. There is nothing stopping the marketers engaging in pull marketing but the CRM system is going to be of limited help because it has no information on the cafe’s customers.
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 customers in the CRM system the support staff have entered but it is also fair to assume that the majority of satisfied customers 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 customers would be difficult to access without a distributor giving up their customer lists and the associated communication. While this is possible it involves all sorts of privacy and logistical implications.
However, in the new world, potential 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’:
Imagine the potential of tapping into all the conversations going on regarding your product or your services.
- Who is ‘product-curious’?
- How to improve it?
- What products work well with it?
Imagine doing the same for your competitors’ offerings.
This is not a new idea. Back in the days of Web 1.0 (1999), the ClueTrain manifesto was written. This identified the online world as a new conversational market where all aspects of commercial offerings are discussed with or without the involvement of the service provider. It also actively encouraged organisations to participate in the conversation and, while this has occurred, to do so systematically has been, until recently, almost impossible.
It’s all out there but requires effort to sift through, manage and interact with. CRM needs to be able to tap this almost limitless supply of information, present it to CRM users in a palatable format and allow them to interact with it.
Along with others, Dynamics CRM has started to access the ‘pull market’ through their Social Networking Accelerator. Barry Givens gives a great five minute overview of how the accelerator lets CRM users ‘tap the conversation.
As an example, let us say someone tweets that they love the cola product but hate the unrecyclable packaging. It soon becomes obvious that there are many likeminded cola consumers in the twitterverse with many proudly boycotting the product for this one reason. Through the collection and aggregation of this information, the manufacturer can now raise a case for their research team to consider changing the packaging and they also have a well-defined marketing list of those who would be very interested to know if changes are made. They also know who the key influencers are and target specific communication to these individuals in the true spirit of CRM.
Obtaining this feedback and being able to target communication regarding its resolution would be time consuming and largely impossible without this kind of automation.
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.