More measurement, but of the right things: There has already been some change in emphasis in measuring customer attitude and behaviour. These include measuring commitment by customer value group (determined via questions such as "Have you recommended a friend to buy this product?"; "Would you still buy it if the price rose by 20%?"); and immediate customer feedback on the good and bad points of service at every touchpoint. New technologies and mechanisms are already available to manage this almost real-time feedback. Behaviour measures include retention, acquisition, share of spend and cost to serve measures by customer value group. Other measurements include the determination to be best, not just in one sector, because customers often compare companies across sectors.
Organisational commitment: In many surveys of CRM success and failure, most of the factors associated with success are in the areas of people, planning, objectives and measurement.
Technology issues are usually less important. However, a proper change plan - addressing all the non-technical issues may make the technical deployment and design much more complicated, but this cannot be avoided - is required to do the end-to-end job properly. This message is slowly getting through. Organisations are finally taking responsibility for the important factors and for getting return on investment.
Marketing effectiveness: Although this is a current buzz phrase, the need has been apparent for years, and boards have been asking for it. Marketing and IT budgets are being more tightly controlled, and there is mounting pressure to show a tangible return on marketing and IT investments.
Real insight: At last, companies are starting to integrate information about customers` needs and wants, obtained through primary research, with information from analysing behavioural and demographic data. For the first time, the word "insight" is starting to mean more than customer data and research. It now relates to integrating and summarising all relevant data. If your analysis and data mining still result in mass campaigns by the marketing and sales divisions then the value of your investment is diminished - and the customer experience continues to worsen.
Understanding the customer experience: A re-emergence of the focus on service has evolved into the need to understand how the customer experiences the organisation at all of its touchpoints, and to translate that experience into improved and revitalised customer service. The focus is on meeting customers` needs (not "delighting" them - a dangerous and uncontrollable aspiration which is easiest to achieve if your normal service is bad), not just serving them. Where this cannot be done for all customers, segmentation is increasingly used to decide which customers` experience should be improved, while ensuring that most customers` experience does not deteriorate.
Interestingly, the true customer experience seems to be getting worse.
Doug Leather, MD, REAP Consulting
Interestingly, the true customer experience seems to be getting worse. In some sectors, customers find it harder to contact their suppliers when they need advice, but find that their suppliers often contact them intrusively when the supplier wants to sell to them. Inappropriately targeted and uninformed contact is still common. The customers` sense of being over-marketed to and poorly served is becoming well developed, and accompanied by a growing sense of dissatisfaction. Intrusive phone calls, spam and 140% more direct mail than 10 years ago all threaten to exacerbate this situation.
Tools in their place: The past few years have seen technology providers selling and promoting technology as the answer to all customer management and relationship needs. In 2003, businesses began to recognise (perhaps in direct proportion to the amount of investment "lost" in vain) the role of technology as a key component in recruiting and keeping customers, but certainly not the most important one.
Marketing transformation: In some cases, organisations are trying to make small changes to how they manage their customers when their entire marketing approach needs transformation, possibly including the supply chain. In many service organisations, severe process breaks add high costs to serving customers. Putting a nice front-end on this will add to costs but not to success with customers if the breaks continue to occur. Over-reliance on contact centres to manage customers may create vulnerability to competitive action using customer-managed, Internet-based approaches.
Success is highly correlated with action: Obvious as this seems, many organisations still cannot capitalise on their investment in data, technology and customer insight because they do not prioritise the many actions available so as to do the right thing - that action most likely to help the business meet its and its customers objectives. In other words, making it happen - delivery - is still a problem.
Customer insight management: A new and much acclaimed role has emerged to take responsibility for extracting value from data. Most large businesses and many smaller businesses have identified the need for this role. In some larger organisations, this role has merged market research with data and analytics roles. However, in many cases, the term "customer insight" has not been well defined. This is to be expected in the early stages of use of the term, but those who use it should firm up not only on the definition but also on the roles and responsibilities involved.
New digital channels: The Web as a serious route to market, rather than the only route to market, seems to have been broadly accepted, with most organisations developing a channel strategy using the Web as a main delivery channel, in the best cases integrated with other channels, and with clear costs and benefits. SMS is emerging rapidly in specific markets - youth, sports, media competitions, certain impulse purchases, service alerts, but needs help from the mobile companies if it is to become as robust a channel as the Web. Interactive digital television is making great strides, particularly in sectors such as financial services and travel, and will continue to do so.
Data privacy: The legal framework has been ever-changing. Many businesses are still not taking seriously the legal impact on their customer and prospect contact strategies. A survey conducted recently by Customer Essential showed that 40% of companies did not include an opt-out in their marketing communications!
Although the outlook for customer management is improving, there are still many quite basic concerns. Addressing these concerns through a transformational approach - and not through simple return on investment calculations - is the central requirement for marketing to demonstrate value to customers as well as shareholders and other stakeholders.
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