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CMO Council study finds maximizing existing relationships takes a back seat to new leads

BtoB Magazine | By Kate Maddox

While b-to-b marketers are increasingly focused on improving relationships with customers, they still have a long way to go in implementing effective, consistent customer retention practices, according to a study released last month by the Chief Marketing Officer Council.

The study found that only one-third of global marketers have strategies in place to win back dormant or lost customers, and only half have strategies to further penetrate or monetize key account relationships.

The study was based on an online survey of more than 450 global marketers, conducted in the fourth quarter of 2007 and the first quarter of this year.

"Everybody is spending money on demand-generation programs, but they are not taking their existing customer data and leveraging it," said Donovan Neale-May, executive director of the CMO Council.

"Marketers should determine their most profitable customers and look at how to improve the customer experience and how to increase business with those customers."

According to the study, only 6.8% of marketers said they have excellent knowledge of the customer when it comes to demographic, behavioral and psychographic data, while 51.9% said they have fair to little knowledge of the customer.

One of the problems is a lack of ownership of the customer relationship across the company," said Jim Hintze, senior VP-marketing at Fujitsu, which provides hardware, software and services for the tele-communications industry.

No matter what your function, you have some relationship to the customer, whether it is direct or indirect," Hintze said.

To help reduce customer churn, Fujitsu has given ownership of customer satisfaction metrics to functional heads across the organization, including product development, sales, marketing and customer service.

"Customer relationship management doesn't usually touch the entire company," Hintze said. "We haven't solved it yet, but we have a game plan to do that."

Fujitsu also implemented a CRM system about a year ago and is now trying to broaden its use from a sales contact tool to an enterprisewide customer asset manager.

"There are so many untapped areas for us to take advantage of [in] retaining customers. We're trying to get the systems and processes in place," Hintze said.

TRACKING TROUBLE

One challenge is tracking all the interactions a customer has with the company, including the customer service experience, and including those in an overall measure of customer satisfaction.

"A customer might call in to an 800-number for warranty support and get turned off because the call isn't handled properly," Hintze said. "People might not see it in total because it doesn't roll up into an overall metric."

Another challenge is dealing with the sheer amount of customer data, he added. "There is so much information out there that even for a company as sophisticated as Fujitsu, managing it intelligently is really, really difficult," he said.

Tom Karrat, exec VP-sales and marketing at online printing company Mimeo.com, said his company is trying to improve its processes for communicating with customers once they place their first order.

"Often the client doesn't know the breadth of offerings we have except through their salesperson or their willingness to go in and navigate our Web site," he said.

Using Mimeo.com, customers can order documents to be printed, bound and delivered. To help retain and upsell clients, the company is rolling out an automated system that will send out e-mails or trigger a live contact based on customer behavior, such as placing an order, receiving a bill or asking a question.

"We don't want to lose the customer-service feel," Karrat said. "Sometimes our clients can order products without our knowing it until we receive the order."

One of the goals of improving the customer experience is to have a salesperson or customer service person engage in a live conversation with a customer anytime the customer initiates an activity, he said.

Mimeo.com has grown at a rate of about 40% a year since 1998.

HIDDEN "BAD STUFF'

Karrat said one of the problems with such high growth is that "bad stuff can get hidden in the good numbers." "Order volume is not the only measure of the customer relationship," he said.

The company uses a combination of standard metrics, such as frequency of use, frequency of orders and shopping cart dropoff, as well as free-form questionnaires to measure customer satisfaction.

Mimeo.com has rolled out new services and products based on the findings of its customer surveys, including a service called Marketplace that lets customers present documents to their clients in a storefront environment.

Mimeo's retention rates are greater than 90%, but the company still aims to improve performance. "We're trying to make sure we see the good things we're doing, and repeat them and catch any problems," Karrat said.

When asked what their companies were doing to improve customer retention, 65.2% of marketers surveyed in the CMO Council study said improving customer communications; 54.8% said enhancing the customer experience; and 51.8% said addressing complaints, problems and pain points.

The marketers also said they need to do a better job of integrating customer data within their organizations.