Thursday, December 11, 2008

CMOs Don't Seem to Get It

I just finished reading the executive summary of the Routes to Revenue. It is a report that presents the findings of a survey of 650 senior marketers in 2008 published by the Infoprint Solutions Company. The first item that jumps out of the report is that 76 percent of the senior marketers believe they are not realizing the full revenue potential of their current customers. Only about 46.5 percent believe they have know their retention rates, customer profitability and customer lifetime value.

The report goes on to list various obstacles for not attaining greater customer penetration. The report lists the following obstacles:
1. Lack of real time data and analytics.
2. Information being selectively gathered and often inaccurate and incomplete.
3. Data being siloed and restricted across the organization.

The new roads to acquiring new business were listed as:
1. Launch new products aimed at specific market segments.
2. Establish new partnerships and revenue-sharing agreements.
3. Stepping up demand generation and customer acquisition programs
4. Expand geographical presence and intensifying international focus.
5. Ramping up eCommerce and customer-direct communications
6. Restructuring or expanding channels of distribution.

The answers to the question of what the companies are doing to improve revenue and reduce costs, the responses were:
1. 40 percent said they were reducing headcount and overhead
2. 38.7 percent said they were automating complex and costly processes.
3. 31.2 percent said they were outsourcing more services and functions
4. 27.8 percent said they were reformulating products or minimizing packaging to contain costs.

When asked what they were doing to increase efficiency and effectiveness, the responses were:
1. 64 percent were evaluating all areas of marketing to increase yield and accountability.
2. 47.3 percent said they were bringing more discipline and rigor to marketing budgeting and spending.
3. 47.3 percent said they were leveraging existing resources within the organization to enhance customer communications.
4. 40.9 percent said they were exploring new customized communications technologies.
5. 38.7 percent said they were moving more marketing investments to internet and mobile channels.
6. 33.3 percent said they were improving behavioral targeting of advertising and online marketing campaigns.
7. 31.5 percent said they were driving adoption and use of CRM and sales automation applications.

The survey listed the ways companies are trying to better engage core audiences. The Routes to Revenue were:
1. 60 percent said they would introduce better segmentation, profiling and targeting strategies.
2. 48.7 percent said they would add or improve their data base marketing systems.
3. 30.3 percent said they would acquire new customer and market analytics capability.
4. 29.8 percent said they would personalize multi-channel communication and customer touch points.
5. 26.4 percent said they would individualize print, email and text messaging, call center or web interactions.
6. 25.8 percent said they would build online customer communities and interactive channels.
7. 25.2 percent said they would capture more customer information via the web and at point-of-sale.

The bottom line is that CMOs (chief marketing officers) don't seem to understand the impact of customer service on loyalty, retention and customer attraction. There are a number of blogs in my archives that provide supporting evidence of the value of customer service in keeping business and attracting new business. See if you can find the few insights they noted that would increase share of pocket through customer service or attraction of new customers through customer loyalty. They may find the answers to higher retention rates, customer profitability and customer lifetime value if they can think outside the box of marketing. It would appear that they can only see the customers through the eyes of marketing - seems a bit myopic. For more data check my next blog.

1 comment:

Zoomerang said...
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