Marketers still 'flying blind' with customer data

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By: Wise Marketer Staff |

Posted on April 24, 2008

An ongoing lack of customer data sharing, integration and insight is negatively affecting many companies' competitiveness, customer retention rates, revenue and profitability, according to a study by the CMO Council, Computer Sciences Corporation, IBM, and D&B.

According to the study, entitled 'Business gain from how you retain', only 50% of marketers around the world reported having any strategy for further penetrating or growing their key account relationships.

CRM still suffering from silos
Also, a surprising 45% of marketers rated the effectiveness of their customer relationship management (CRM) systems as "deficient" or "needing more work", with only 15% rating their company as "extremely good" or "effective" at integrating disparate customer data sources and repositories.

The study asked over 450 marketers about their strategies for retaining customers and increasing revenue, and found a significant lack of customer knowledge and other substantial obstacles to integrating disparate customer data repositories throughout the enterprise.

Only 6% of marketers said they have "excellent knowledge of the customer" when it comes to demographics, behaviour, psychographics, and transactional data. Worryingly, more than 50% reported that they have "fair", "little", or "no" knowledge of their customers.

Is IT really to blame?
Marketers said that they are 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 (CDI).

Compounding the problem is a lack of formalised data sharing policies and practices, combined with internal political or cultural barriers, as well as IT department-driven obstacles and objections to data integration.

Other key findings
Other findings from the study included:

  • Only 15% of marketers said that their companies are doing an extremely good or effective job of integrating disparate customer data sources and repositories, while 55% noted that there was room for improvement, or a deficiency in this area.
  • More than 31% of companies surveyed had customer churn rates of more than 10%, and 32% reported annual customer turnover (churn rate) of 5% - 10%. More than 62% said they desired or expected a churn level of less than 5%.
  • Respondents believed that customer churn significantly impacts business performance through revenue loss (59.9%), reduced profitability (39.6%), and greater marketing and re-acquisition costs (36.3%).
  • While churn is a big problem for most marketers, nearly 67% of those surveyed said they had no system for reactivating dormant or lost customers, while slightly more than half said they had a strategy in place for further penetrating or growing key account relationships.
  • While more than 35% of respondents reported that the CMO or marketing department (38.9%) has primary responsibility for the customer analytics function, they are not using its full value. Over 31% of those surveyed said that no data mining was being conducted at all, and 63% were only doing moderate levels of data mining for customer intelligence and insight.
  • Key initiatives to increase customer retention included improving customer communications (65.2%), addressing complaints, problems and pain points (51.8%), and enhancing the customer experience (54.8%). Sadly, fewer marketers cited their companies' willingness to modify business practices and policies to accommodate customer needs.

Top uses of customer data
The study also found that the top six strategic applications of customer information by marketers include:

  • Up-selling and cross-selling;
  • Segmenting and targeting;
  • Driving retention, loyalty and promotional programmes;
  • Identifying new opportunities and unmet needs;
  • Improving customer service;
  • Shaping personalised and customised communications.

For additional information:
·  Visit CMO Council at
·  Visit CSC at
·  Visit IBM at
·  Visit D&B at