With margins perpetually under stress, competition ever fiercer and product life cycles shrinking, marketers must increasingly justify their actions and demonstrate the contribution they make to their company’s growth and profitability. Savvy marketers know what matters. A recent global Spencer Stuart survey1 of more than 300 senior marketing executives identified the top three metrics for success as – controlling costs, retaining customers and ensuring a measurable return on the marketing investment.
To meet these challenges, marketers are adopting Customer Intelligence as the essential source of meaningful differentiation and competitive advantage. Marketers are learning to use the insight gained from every customer interaction to foster more meaningful customer relationships and better understand what moves their customers. This is driving the expansion of the ‘marketing dashboard’ to include customer metrics such as recent buying behaviour and attitudes to brand, as well as customer profitability.
One of the biggest challenges marketers now face is the rise of the web and its related social influence. A recent A. C. Nielsen survey2 highlighted the greater importance consumers now attach to recommendations from people they know – and even from complete strangers – than to traditional marketing activity. This is a radical shift and it is therefore vital that marketers capture what people say on the web and are then able to measure and analyse that information in order to make decisions based on ‘social insight’.
The value of a customer intelligence framework also enables marketers to exploit two other big shifts in customer behaviour: the rise of digital media and the investment in two-way media. As customers gain the ability to interact with sellers – to ‘pull’ rather than be ‘pushed’ by promotional activity – marketers need the customer intelligence framework in order to measure these communication streams.
Findings by Forrester Research3 show that marketers gain significant benefit when their metrics are measured on the back of a customer intelligence framework. The Forrester survey revealed that insight had improved by well over 50 per cent across eight key measurement areas with Campaign Metrics (response rates, transactions etc.) at an uplift of 83 per cent showing the greatest gain, and Customer Satisfaction, Incremental Revenue, Customer Retention and Cross- & Up-Sell Opportunities running close behind.
Another major trend we see is CRM maturing into CEM (Customer Experience Management) and this trend, too, requires marketing metrics for measuring success. Most marketers acknowledge that another of their major challenges is managing the customer’s full lifecycle experience across different products and channels. Whereas CRM has typically focused on individual transactions, CEM calls for building an experience profile of the customer from past interactions, addressing that profile through multiple channels, and then mounting a process of continuous interaction improvement. In short, CEM is about creating learning relationships over the long term.
Customer Experience Management has the potential to help companies develop more profitable customers who – having enjoyed a richer experience – are more loyal and more likely to become valuable advocates. With the internet shifting the balance of power more towards the customer, with mass marketing losing its impact, and with product differentiation becoming harder, savvy marketers are adopting CEM to create deeper bonds with their customers in order to better understand them and give them what they want.
For more on marketing measurement check out the Measure what matters webcast series