By Claire West
60% of firms are reconsidering how to identify their most valuable customers, according to a new report.
The proliferation of new customer communication channels, including social networks, microblogs and wikis, has led to a deluge of information. Customers are sharing not only their opinions about the brands with which they do business, but their ideas for new products and marketing strategies as well. Beyond improving how they respond to customers, companies that are able to interpret and act upon these insights can also enhance how they develop new products and operate their businesses.
As a result, this new wealth of information is forcing a majority of companies to reconsider how they determine the value of their customers. This is the main finding of a new report, Redefining customer value: corporate strategies for the social web, produced by the Economist Intelligence Unit and sponsored by SAS. The report, the first of a two-part series, includes a survey of nearly 400 executives from around the world, as well as in-depth interviews with business executives and experts.
While this effort is still nascent–very few companies have figured out just how to rewrite the definition of a valuable customer–a majority of respondents (75%) say that customers are now a critical source of innovative ideas. And more than half (55%) say that customer service is now an enterprise-wide responsibility, indicating a recognition among firms that customer insights need to be harnessed more effectively and by more than just the marketing function.
“Executives realise that customers need to be approached in new ways, to give them a greater opportunity to share insights and ideas about new products and services,” says Debra D’Agostino, managing editor of business research at the Economist Intelligence Unit and editor of the report. “However, companies still struggle with how to measure the actual value of that effort, or how to create processes that allow for the easy transfer of customer insight across the enterprise. Firms that can find ways to do this will have an edge over their rivals.”
Other findings from the report include:
• Extracting a competitive edge from these new channels will require improved analysis of customer behaviour. Analysing the new patterns of customer interactions will not be easy, considering their high volume and frequency. Given the many ways in which companies are interacting with customers, data will need to be shared more widely and analysed quickly and effectively so that the appropriate action can be taken. This presents a significant challenge: just 52% of survey respondents are confident that their companies are using technology adequately to understand customers, and just over one-quarter believe that their companies are able to respond adequately to new business environments.
• Organisations need to broaden their approach to market information. In the C-suite, this means that the CMO should consider how to integrate multi-channel customer feedback—including via social networks, blogs and online communities–with conventional inputs. Marketing executives will need to be as comfortable interpreting these data as they are with traditional means of tracking customers.
• The CMO should partner with the CFO, and share information more frequently with the legal and risk departments. Currently, this link has been forged primarily in the heat of crisis, when companies are facing falling revenue or a situation that can harm the firm’s reputation.
[i]Redefining customer value: corporate strategies for the social web is available free of charge at: www.businessresearch.eiu.com/redefining-customer-value.html