Why don't companies like their loyalty tools?
While 94% of senior executives feel that keeping customers for life is a priority within their business, almost half (49%) said they are unhappy with their current marketing technology's ability to support those goals, according to a study from Forbes Insights and Sitecore.
The report, entitled 'Customers for Life: Technology Strategies for Attracting and Keeping Customers', was based on a survey of more than 300 senior executives in North America and provides insights into the way businesses understand and approach the customer experience.
While organisations say that retaining customers and obtaining a single view of the customer are top marketing priorities, most still concentrate on customer acquisition. Only 38% of companies are primarily focused on retaining repeat customers for revenue growth, while nearly half (49%) are focused on gaining new customers.
"This suggests that many companies fall short of their potential when it comes to nurturing the full customer lifecycle," said Bruce Rogers, chief insights officer for Forbes. "A lack of internal collaboration and integration of systems often leaves them with siloed data, crippling their efforts to maximise customer lifetime value and leading to chaos and complexity."
By 2020, customer experience is expected to surpass product and pricing as the key differentiator for businesses.1 To remain competitive in this evolving landscape, companies must orient themselves toward creating and keeping customers for life.
"Fostering the personal relationships and compelling experiences that lead to customer loyalty is now a requirement for achieving market leadership," said Sitecore's CEO, Michael Seifert. "However, many organisations are held back because they're unable to achieve a 360-degree view of the customer."
Among the study's other key findings:
- Developing a single customer view is a top organisational priority; however, technical challenges-including a multiplicity of systems, fragmentation of data and the resulting silos and complexity-slow progress.
- Only 16% of organisations surveyed do not consider a single view of the customer a priority, while 53% consider it a high to very high priority. The biggest challenges to developing this 360-degree view are difficulties with keeping track of data among multiple systems, data redundancies and silos. On average, organisations use 36 different data-gathering systems and vendors for marketing efforts.
- Only a quarter (24%) of all respondents feel that customer communications and data gathering systems are fully integrated, while 13% report no level of integration at all.
- Silos and a lack of integration among teams also pose challenges to the delivery of seamless, personalised customer interactions.
- Only 37% of respondents say the teams responsible for customer acquisition and interfacing regardless of lifecycle stage, are fully integrated.
- Half (49%) of all respondents indicate marketing and data teams are siloed.
- The top challenges to more integrated ways of communicating with customers include a lack of willingness to collaborate cross-team, and insufficiently evolved talent or technical capabilities to warrant integration.
- Organisations understand the benefit of utilizing customer lifetime value (CLV) metrics in strategic planning for acquisition, retention and revenue growth; however, regular usage rates are low.
- Over three-quarters of respondents indicate average and maximum potential CLV metrics are highly valuable to their planning.
- Only 58% regularly calculate average CLV, and 47% do not know potential maximum CLV. These low regular usage rates suggest that intention and action are disconnected.
- While organisations recognise the importance of a strategic approach to retaining customers for life, C-level marketers and technology executives are often left out of the process.
- The importance of a strategic approach is well understood by the businesses surveyed. Eighty-four percent report having a strategy in place, and 49% indicate it is an integral part of their overall business strategy.
- While 73% say the CEO is involved in developing that strategy, only 38% indicate the CMO is involved. Even fewer (33%) include the CIO in these conversations.
The full report has been made available for free download from the Forbes web site - click here (free registration required).