In this new age of CRM, when many of the most popular books on marketing focus on the importance of the customer, we decided at the CMO Council to explore some of the attitudes, trends and day-to-day realities that are shaping customer-centric marketing operations. We are just gearing up to release our study, "Select and Connect: Strategies for Targeted Acquisition and Retention." The results, unfortunately, have not been encouraging.
The report, sponsored by Netline Corp., surveyed 558 senior marketing executives and managers, representing a wide variety of industries in both b-to-b and b-to-c markets. We asked about 40 questions that were designed to cover the entire Customer Relationship Lifecycle, including acquisition and retention programs, and the data systems used to manage and measure them.
At first glance, the results seem to show that the global repositioning of marketing as an efficient and effective business function has made its mark; marketers on every level have internalized the bottom-line message. Marketers in our survey report that the customer data they are most concerned with for planning programs are value and profitability, and that increasing organizational discipline is important for the purposes of improving market and revenue growth. But when we put aside the grand vision of marketing and dug down into the details, the disconnects were somewhat startling.
The most troubling finding from our study is that marketers appear surprisingly detached from their customers. Marketers report an overwhelming reliance on their CRM systems as a primary source of customer data, with very little insight gained through customer service, distribution channels, customer organizations or communities, or even online customer networks.
That reliance on CRM wouldn't be a cause for concern if marketers actually had faith in those systems. On average, 40% of all respondents rated their customer data systems as "weak" or "very weak" in critical areas. This includes the timeliness and depth of transactional data; the availability of useful data, reports and analytics; and the relevance of available data to marketing strategies. In fact, marketing executives, as a subgroup in our study, called out the complexity of data and system integration requirements as the most significant barrier to achieving optimal customer intimacy.
Perhaps a little more emphasis should be put on human contact rather than systems integration. Our study revealed an astonishing lack of direct customer involvement, with marketers relying heavily on the sales force to initiate customer engagements. Nearly 75% of marketers in our survey said they have no customer advisory group of any kind, whether a formal advisory board or even an informal Web community of users or buyers.
This lack of direct contact with customers paints a disturbing picture of a customer-centric business defined more by processes than real engagement, and seems to support the common complaint among sales teams that marketers don't really know their customers.
What then, are marketers focusing on? Unfortunately, we know from our report that they're not focusing adequately on the performance of their campaigns and programs. Two-thirds of the respondents in our study said they had no formal system for tracking marketing's role in customer acquisition, retention and value creation; more than one-third did not have a model or profile of the best customer prospect or opportunity; and just under one-third had no reliable data on revenue, value and profitability of key accounts. Three-quarters of respondents said they had no dashboard system for modifying marketing spending; more than one-third of respondents had no formal system or process to evaluate, grade and score leads and contacts; and fewer than half did not monitor churn and retention rates.
It's hard to reconcile the details of these findings with the high-level assertions that marketing is focused on driving value and profitability, or even that marketing is focused on building customer-centric businesses.
But perhaps the cause of this breakdown is that marketers are not really setting their own agendas. One of the most critical aspects of determining marketing strategy is the segmentation and targeting of key customers. Nearly 50% of our survey respondents said someone other than the marketing team influences or determines segmentation and targeting strategy. Of those, 30% said the CEO or business unit manager controls this critical process.
In a telling division between executives and managers, marketing executives in our study were far more likely to state that they were driving the segmentation and targeting agenda, while managers were more likely to say the CEO is calling the shots.
There is some good news in our study. We were able to identify a subgroup of marketers in our audience that consistently reported optimal levels of customer insight and intimacy in their marketing programs. The traits of these organizations are instructive. They have more control over setting marketing strategy; they have strong relationships with sales and other business units; they directly drive engagements with customers and support them with robust and reliable data systems; and they maintain a clear view into where and how customers are using their products.
The conclusions we are drawing from this study are important for marketers to understand. We certainly didn't set out to deliver a body blow to marketers that are already challenged on so many fronts, but they appear to fall short in how they address those challenges. Marketers are under tremendous pressure to build technically sophisticated organizations that deliver precisely tuned acquisition and retention programs with measurable investment returns.
While building a marketing organization that serves, measures and responds to customers is important, it is not sufficient. Marketers can't afford to get lost in the weeds on tactical development while losing their connection with customers. In fact, direct engagement with customers should be the source of inspiration for programs and processes.
Christopher Kenton is senior VP of the CMO Council (www.cmo council.org), and its corporate parent, GlobalFluency. He can be reached at [email protected]