The Marketing Renaissance
Marketing has become the new hot spot in CRM. During the recession and even before, there was a great flurry of interest in customer service and related things. Consequently, we have seen a lot of attention being paid to customer experience and much of the social media oriented growth in that period was centered on the existing customer.
As the economy has begun to improve the orientation has been more toward sales but with a decided twist. By their actions, vendors have made it clear that they understand that the rule of the day is cross selling and up selling the customer base. That’s a big difference from rushing out to sell net new brands, products and categories. With that shift it becomes more important than ever to market well and at a macro level that spells the rising importance of marketing automation. This might seem redundant but it is not.
When we sell net new categories marketing is rather bare bones. Uber-marketer Thor Johnson describes marketing in explosive new markets as PR and brochure marketing and he has a point. When the world is a green field you need little more than a list of names to cold call. But the tenor of these times requires more incisive understanding of customer motivations and needs, hence the emphasis on data gathering through social and other channels, analytics and even revenue performance management.
I have written about all of these ideas before but the difference between then and now is that I was early then and today the change is upon us. You don’t need to look far for proof. The Salesforce-Radian6 nuptials are proof enough but if that was the only proof point you could be skeptical. However, numerous indicators suggest that this is real. Revenue performance management (RPM) with its emphasis on embedding analytics into sales and marketing business processes is a case in point.
RPM is all about building greater certainty into the sales process and if you dig a little it makes perfect sense. When selling into an established customer base the demand is relatively lower than it is when selling into a new market but the costs don’t change much. Consequently, a smart vendor will not simply chase every suspect but gather evidence of need, demand and ability to pay before committing expensive sales resources. Depending on the market, the vendor might forget all about direct sales and opt for channel representation or retail selling, each of which off-loads significant expense.
The reasons are manifold. Margins are smaller the second or third time around and subsequent products have to pack more value. Look at your latest wireless phone, how does it compare in features and functions with the device you had at the beginning of the century? Now, how does your monthly wireless bill compare with the bill you paid ten or more years ago? I rest my case.
All of that speaks to an era when marketing is ascendant. The last time something like this happened, in the US at least, manufacturing was king and we were able to stamp out any number of products for pennies. To keep the engine of commerce running we marketed the heck out of products and ushered in the golden age of advertising abetted by the rise of new technologies ideally suited to mass marketing — broadcast medial.
The situation is not identical today. Manufacturing went to ultra low wage countries and we became an economy dominated by the service industry. Smart vendors have tried to raise the idea of service to an art form calling it an experience and, of course, the experience starts with marketing, and our own new messaging technology, social media.
This entire preamble has a CRM point. If you look at the major CRM suites marketing is, in many cases, under-represented. It is a sub-division of accounting in many places and that might be a good thing. Before marketers could take an equal place in a company’s revenue discussion, they had to learn to talk the corporate talk. In addition to the usual lingo of clicks, responses, placements and square footage, marketing has had to learn the language of ROI and it has done that or at least the process is underway.
Today, in addition to the understanding of the art of marketing, advanced marketers are speaking the language of cost per lead, campaign ROI and revenue. This change comes along at precisely the right time as vendors in both B2B and B2C worlds grapple with a dynamic marketplace where success requires more than brute strength cold calling or uninspired retailing.
In this environment I expect to see more of the established CRM companies taking a second or third look at marketing and to strengthen their offerings beyond the basics. This makes for an interesting time if you happen to be an independent software company specializing in marketing, social media marketing or analytics. The IPO market is beginning to build but as the Salesforce-Radian6 deal shows, a good company doesn’t necessarily need to IPO in order to have a big payday.