Push Vs. Pull CRM

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Graham Hill
Guru
Member

Posted 24-Oct-2005 06:19 AM
A spirited on-line discussion is taking place about “push vs pull” models in business. This is an important conversation that impacts businesses and customers alike.

In a nutshell. The advocates of the push model suggest that businesses can continue to grow & prosper by becoming better at targeting the right customers, with the right products, at the right time. Businesses are actively in charge and customers are mostly passive consumers of what they offer. All CRM suites and most best-of-breed CRM applications are implicitaly developed on the basis of the push model. And the model has served customers able to choose from competing offerings in free markets very well for as long as markets have existed.

In contrast, the advocates of the pull model point to the increasing difficulties the push model has (little belief in advertisers’ claims, the rise in “do not spam me” lists and falling customer satisfaction) and suggest that businesses can only continue to grow & prosper by involving customers more in the development, delivery and consumption of their products. Push businesses provide a framework within which customers can manage their own relationships with them: from lead users being involved in product innovation, through customers being involved in co-creating buzz marketing communications (see http://www.mini.de/de/de/herbstkampagne_2005/index.jsp for a good example in German), to customers serving themselves on-line. Current Web 2.0 developments of the internet have trigered much of this discussion. Although this model is relatively new, it is being successfully piloted by many companies. It is not an alternative to free markets, but rather, an extension of free market ideas inside businesses themselves.

Two of the best explainers of push vs pull are John Seely Brown (ex Chief Scientist at Xerox) http://www.johnseelybrown.com/ and John Hagel (ex McKinsey) http://edgeperspectives.typepad.com/. Take a look.

As is so often the case, the answer is probably some combination of both, however, the implications of even a small shift from the push model towards the pull model are quite significant for marketing, sales and particularly for customer service.

What do you think?
Is Push CRM in long-term decline?
Is Pull CRM just another bubble?
What is the right combination of push and pull?
How do you bring Push and Pull CRM together?

Graham Hill
Independent CRM Consultant


Dick Lee, CRMGuru Panelist
Advisory Board
Member
Picture of Dick Lee, CRMGuru Panelist

Posted 25-Oct-2005 10:31 AM
Graham does us a great service by putting this topic on the front burner. One observation I would like to add regards the tension between buyers and sellers over “push-pull.”

Most sellers are adamant about remaining in the “push” camp—because “push” marketing gives them a sense of control over their market success. But it’s only a sense. In fact, in an increasing percentage of market sectors it’s outright delusional.

Buyers are becoming more and more resistant—and immune to—push tactics. They don’t wan’t to be sold this way. Instead, they want to do business with sellers who respect them—not only by showing more civility than sellers have traditionally shown, but by learning buyer tastes, wants, preferences and needs and responding to them. That’s the essence of “pull,” and the essence of future marketing success.

But don’t try to explain this to GM, Ford, the U.S. health care industry or the global banks. They’re still determined to fight their customers to the end over control of buyer-seller relationships. Sure ceding this control—or even sharing it—is a scary proposition at first. But when well executed, it’s a very successful proposition.

Dick Lee

Author Dick Lee is founder and principal of High-Yield Methods, a Twin Cities-based consulting firm specializing in helping clients achieve customer-centricity through CRM and proper alignment of process and technology. Dick is the developer of the Visual Workflow approach to business process improvement.


Gwynne Young
Managing Editor, CustomerThink
Member

Posted 25-Oct-2005 02:46 PM
[Posted for Jeremy Cox, Managing Director, The Wisdom Network]

Where I think a lot of market segmentation goes wrong is that it is often very transient or ad hoc.

A firm decides it wants to push a particular product to meet quarterly targets, it then identifies target segments, makes a leap of faith about their likely ‘hot-buttons’ and then ‘does marketing’.

This is really the ‘push’ approach, and is supported quite well by MRM systems and gives Mr Moneybags control.

By contrast, another firm decides which customers it would like to acquire, retain and develop. This firm finds out everything it can about the motivations of customers, market forces at work impacting them, buying behaviours etc.

To do this, it breaks its customer portfolio down into discrete segments. It would like to have a segment of one, but can’t operate profitably at this level, so has to make some compromises. It figures out what value propositions will be attractive, total go-to-market model, so it can reach opportunities and sell profitably.

It also ‘does its marketing’ and learns from experience, gradually adapting and getting closer to the right marketing mix. It has certain limitations to its freedom, but responds to customers. Is this a ‘pull’ or ‘push’ company? I suspect a hybrid.

This is what IBM transitioned to in the late 1990s. We used to talk about ‘market pull vs.. push’ back then.

A third scenario I’ve seen advocated, and would describe as on the extreme left wing of the debate, is ‘buyer-centricity’ which appears to subordinate everything (including presumably any chance of making a profit) to buyers or consumers. Probably an extreme form of ‘pull’.

As it seems with British politics at the moment, the middle way is probably where the competitive battle ground will be fought.

Good subject for a debate, though, Graham

Warmest regards

Jeremy

Jeremy W G Cox
Managing Director
The Wisdom Network Ltd


Bob Thompson
Founder, CRMGuru.com
Member

Posted 27-Oct-2005 08:18 AM
I suppose it’s no surprise that on a CRM site, we’re like the idea of “pull.” And I’m no exception.

However, in emerging markets, or fast-growing markets where size really does matter (think telecom, software, railroads in days gone by), it seems to me that the successful companies are great at “pushing” their customers and the market along.

How else can you explain the success of Apple, at least in the early days? Who could be more pushy than Steve Job pitching the “insanely great” Mac.

But when markets mature, CRM and “pull” thinking comes to the forefront. The power has shifted to the customer, and businesses have to adapt.

You can almost hear customers saying, literally, “you can’t push me around any more. I’ve got other options!”

Has anyone seen any research on companies or industries shifting from one mode to the other? I have a theory that’s it’s one reason why some companies, like Siebel, disappear. They aren’t able to make the transition from push to pull, and end up being acquired or going out of business.

But isn’t it fair to say that Siebel wouldn’t have become the CRM industry leader if it wasn’t “pushy” about it?

Bob Thompson
Founder, CRMGuru.com


Jim Novo
Member

Posted 28-Oct-2005 06:44 AM
Methinks someone better define “push” and “pull” or this whole argument is headed for paradox and the marketing trash bin. It reminds me of the equally weak “Branding versus direct marketing” argument—or is it the same argument in a new set of clothes?

By “push” do people mean “broadcast” or “not customized” or “one size fits all” communication, and by “pull” they mean the opposite? Or is “push” equal to basing targeting on flimsy demographics and “pull” basing targeting on actual individual behavior? Or are push and pull “directional”, meaning they are not media-centric but more like “outbound” and “inbound”? Or do push and pull refer to a “mindset”, more like copy treatments? What the heck do these terms mean?

Jeremy Cox is on to the nub of the issue when he mentions “hybrid”. The way I have explained this to people engaged in the “Branding versus direct marketing” argument is this: think of these supposed opposites as two ends of a continuum with a “slider” between them (like on a stereo for bass and treble control). For some products / customers the slider mix should favor branding, others direct marketing, but it is rare that the highest ROI is found with the slider “pegged” to one side or the other. It’s the same for “push” and “pull”- whatever they mean. The appropriate approach is defined by the status of the relationship with the customer, by the customer LifeCycle.

For example, take the case of a defecting customer. If you are 100% “pull”, how are you going to reach out and retain this customer? Isn’t this something CRM is supposed to do? If you are always “waiting” for the customer to engage and not “pushing” them, e.g. customer in complete control, you defection rate is going to rise and profits fall. The optimized model is you pull when you can, but push when you have to. The trick is to understand when to push and when to pull.

In other words, what irritates people is a getting a push when they want or deserve a pull. The marketing landscape is indeed changing, but the answer to this challenge is not becoming 100% pull.

Jim Novo | Author: Turning Customer Data into Profits
http://www.jimnovo.com
Co-Author: Marketer’s Common Sense Guide to E-Metrics
http://www.hiqhq.com/marketersguide.asp


Graham Hill
Guru
Member

Posted 03-Nov-2005 01:22 AM
Bob

Experience suggests that you are right.

Young companies are often in a hurry to make sales with which to offset their start-up costs. This typically leads to push-based branded marketing communications to make potential customers interested in buying. Once a customer has bought, it also typically leads to more push-based customer management communications to build a ‘relationship’ with the customers and to keep them coming back for more. And what goes for young companies also goes for established companies with an expanding product line-up.

This model was developed in the 1950s in the US as a way to inform the post-war masses about the wonderful new products that the booming economy was producing. It resulted in the development of the disciplines of brand management, marketing planning and direct communications amongst others. And it was an enormous success, propelling the US to the dominant global economic position it has today.

How times change.

Today, things are a little different. Rather than shortages of products, many customers today have a shortage of time and an even bigger shortage of attention. A typical US citizen sees about 5,000 advertising images per day, how many do you think they notice?. And where there were two or three companies producing a product, there are now dozens or even hundreds, all competing for attention and ultimately, for sales. The response of the marketing profession has been to push harder, with more innovative advertising, more exciting packaging and more targeted direct communications. But more and more customers don’t believe what they hear from marketers anymore. A recent survey in the UK found that 82% of customers don’t believe that they will get what the companies’ slick marketing communications promise. And 82% of them will still be disappointed when they don’t. Clearly, push-based marketing isn’t working as well as it once was.

People have all the products they need, can’t be bothered with the communications they receive and don’t believe them anyway. But most marketers still continue to believe that if they can be more creative, better at targeting, better at timing and better at designing offers, that customers will continue to buy. Many will, but an increasing number of customers won’t. These customers want to be more in control than they were. They opt out of receiving junk communications, they screen out unwanted adverts with their Tivo recorders, they self-serve and they are enjoying it. This is the early signs of the new pull-based marketing.

The challenge that we have is to integrate the best of the old push-world (that still works) with experiments with the new pull-world (that is still being developed). It isn’t about branding vs. direct communications, or advertising vs. word of mouth communications (as a current debate in the advertising world would have it), but about reorganising around mutual value creation along the end-to-end customer experience. There is a role for both types of marketing, but we still have to work out how to achieve integration and how to balance push and pull.

There may be many marketers who don’t believe this. They will have to wait and see much harder they will have to push to stay exactly where they are today.

Graham Hill
Independent CRM Consultant

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