Only 50 percent of global marketers report having a strategy for further penetrating or monetizing key account relationships, reports the Chief Marketing Officer (CMO) Council in a new research study, "Business Gain From How You Retain."

 

In addition, what council officials call "a surprising 45 percent" rate the effectiveness of customer relationship management (CRM) systems as "deficient" or "needing more work," with only 15 percent of companies rating themselves "extremely good" or "effective" at integrating disparate customer data sources and repositories.

 

Conducted in late 2007 and early 2008, the CMO Council's "Business Gain From How You Retain" study undertook an evaluation of where and how marketers are "operationalizing" customer intelligence and insight to "reduce customer churn, increase lifetime value, improve the customer experience, and increase the effectiveness and targeting of marketing spend."

 

Funded by Computer Sciences (News - Alert) Corporation, IBM Software and D&B, the audit of more than 450 marketers located across the globe found what the report calls "a significant lack of customer knowledge" and "substantial obstacles and roadblocks to integrating disparate customer data repositories across the enterprise."

 

Just six percent of marketers say they have "excellent knowledge" of the customer when it comes to demographic, behavioral, psychographic and transactional data, while over 50 percent report they have "fair, little, or no" knowledge of the customer.

 

The study finds marketers "struggling" to gain a true and timely view of the customer due to inadequate or incompatible IT systems and databases, siloed data in functional areas, and a limited strategic focus or management mandate on Customer Data Integration.

 

Compounding the issue, according to the study, is a lack of formalized data-sharing policies and practices in the organization, combined with internal political or cultural barriers and IT obstacles and objections to data integration.

Alexander J. Black, a senior partner in the Strategic Services group within CSC's Global Business Solutions organization, said the inability to use data to reduce customer turnover "hinders a company's long-term competitiveness and profitability."

 

The study found that over 31 percent of companies surveyed had customer churn rates of more than 10 percent and 32 percent reported turnover of five to 10 percent. In comparison, more than 62 percent said they desired or expected a churn level of less than five percent.

 

While churn is a big issue, nearly 67 percent of those surveyed say they have no system for re-activating dormant or lost customers, while just over half of respondents have a strategy for further penetrating or monetizing key account relationships.

 

Efforts to increase customer retention include improving customer communications (65.2 percent); addressing complaints, problems and pain points (51.8 percent); and enhancing the customer experience  (54.8 percent). "Unfortunately," the study's authors note dryly, "fewer marketers noted their companies' willingness to modify business practices and policies to accommodate customer needs."

 

"Targeting, attracting, and retaining new customers" will remain a top priority for chief information officers in 2008, according to a worldwide survey of 1,500 CIOs by Gartner (News - Alert) Executive Programs.

 

The research firm also outlines seven types of initiatives that can help organizations "focus on specific efforts that, in aggregate, will boost customer loyalty and satisfaction."

 

"No one project will, by itself, improve the overall experience, but the combination of these seven types of projects, if implemented well, will contribute to the development and perpetual improvement of the organization's customer experiences," said Ed Thompson, research vice president at Gartner.