What's behind the loyalty malaise?

WM Circle Logo

By: Wise Marketer Staff |

Posted on September 5, 2013

Only a small percentage of companies are truly committed to relationship marketing strategies, despite a widespread understanding among marketers about the need to build long-term loyalty, according to a report from Econsultancy and Responsys.

The second annual 'Cross-Channel Marketing Report' found that many businesses are failing to move beyond a campaign-centric marketing mindset rooted in acquisition. According to the survey of nearly 900 companies, only 30% of respondents said their organisations were "very committed" to relationship marketing, with 22% conducting no relationship marketing at all.

Despite the fact that more than two thirds of respondents (70%) agree with the statement that "it is cheaper to retain than acquire a customer", 44% of companies have acquisition as their primary focus compared to just 16% who say they focus mainly on retention.

The most commonly cited barriers preventing companies from committing to relationship marketing are a 'lack of resources '(22%) and 'no clearly defined strategy' (19%).

"Companies in all sectors should be using marketing technology to build individual relationships with customers across the digital channels. However, this study shows that relatively few marketers are capitalising on this opportunity," warned Simon Robinson, senior director of marketing and alliances for Responsys. "Evidence suggests that most marketing departments are still focused on a campaign-centric approach and are therefore missing out on the gains they know are waiting for them."

While companies are struggling with relationship marketing, the research found that they are at least becoming more integrated in their approach to cross-channel marketing. As part of the survey, companies were asked to indicate the level of integration between specific digital and offline marketing disciplines and their wider marketing programmes.

Across every single digital channel and discipline that was queried, a larger proportion than last year said that their channels are "very integrated" with their wider marketing efforts. Over the previous 12 months, the largest total changes were seen for online display advertising (+9%) and social media marketing (+9%).

As was the case one year before, the most commonly cited factor enabling effective coordination of cross-channel marketing campaigns was a 'clearly defined strategy', with 37% of companies now identifying this as such in 2013 (up from 28% in 2012).

The research also noted some worrying indications that many companies are failing to focus on strategy, with more than half of companies (54%) saying that less than 20% of their time is spent on 'strategy and planning'. Furthermore, according to the research, 40% of companies have no strategy for integrating mobile into their broader marketing campaigns.

"Companies switching away from static, campaign-centric models to those that place an emphasis on building lifetime customer value are likely to be those that succeed in achieving sustainable and growing revenue streams in the future," said Andrew Warren-Payne, senior research analyst for Econsultancy. "As customer behaviours change and information is consumed from an ever greater number of channels, it will become more important to build relationships at an earlier stage of the customer decision-making process."

More Info: