New focus on acquisition instead of retention?
The majority of financial managers from large UK businesses now favour putting more resources into prospecting for new customers and less into nurturing existing customer relationships, due largely to the current recession, according to a survey by Lloyd James Group.
The data solutions firm surveyed 1,000 finance directors and senior financial managers, finding that 79% of respondents from companies with 250-1,000 employees and 70% of those at businesses with more than 1,000 employees backed the idea of boosting investment in prospecting while cutting spend on customer relationship management (CRM) activities.
But the survey also found that only 42% of respondents from businesses with 1-10 employees and 49% of those from companies with 11-50 employees supported the idea in the current economic climate. In-between were mid-sized businesses, with 57% of respondents from firms with 51-249 employees agreeing that their marketing should lean toward prospecting for new business.
Overall, only 49% of all financial directors and managers favoured putting more resources into prospecting and less into CRM initiatives. The survey also found that, regionally, emphasis on customer acquisition was stronger among respondents in the North of England (where more than 56% of the financial decision makers favoured the idea), and in Scotland (where support ran at 57%). Support was weakest in the Midlands at 40% and Wales at 33%.
In terms of industry sectors, the weakest support for putting new business prospecting ahead of CRM came from respondents in retail, education, business services, healthcare, and IT, communications and high-tech, with fewer than 40% in each industry backing the idea. Support was highest in media and marketing at 73%, hospitality and catering at 67%, travel and transport at 65%, and utilities and telecommunications at 64%.
According to Darrel Linehan, client services director for Lloyd James Group, "Smaller businesses do risk losing out to bigger competitors if they don't continue marketing to new customers despite the economic downturn. Clearly, simply keep existing clients is not going to be enough to survive. With both consumers and businesses aiming to further tighten their belts, every company stands to lose some of their current customers, so finding new ones is vital."