According to Deloitte’s Richard Lee, the lead principal of its customer and channel strategy practice, companies need to step back and take a holistic, customer-centric view of their organizations.
With Sarbanes-Oxley and PIPEDA in Canada, there are escalating demands for corporate transparency.
For marketing and sales — there is no exception, with accountability an increasingly important component of maintaining best practice marketing and sales, Lee said.
Other key trends Deloitte predicts will continue to shape the market going forward include; innovative marketing techniques using alternative channels; a focus on customer education to maximise retention; privacy issues in relation to the use of customer data; and proximity technology. Once organizations achieve a balance of these key areas, they will better understand and be more prepared to market their businesses effectively, achieving their desired results.
Following are Deloitte’s top Customer and Channel forecasts for 2005:
1. A strong tie between marketing and bottom-line results. Traditionally, marketing has escaped accountability in being subject to performance metrics that match inputs with outcomes. But in an age of increased transparency, the Chief Marketing Officer (CMO) will come under the same pressure as the CFO and CIO to measure results. Expect to see:Companies increasingly tying marketing and advertising expenditures to results and spending more time aligning internal performance measures with brand promises. The result will be a tighter focus on driving more tangible and targeted results in brand awareness, customer acquisition, loyalty and customer insights.
2. Greater scrutiny of corporate data protection. Now that Customer Relationship Management (CRM) technology is ubiquitous, companies have an abundance of customer data. Most companies focus on using this data to create marketing campaigns to precisely target their customer base. However, very few worry enough about protecting the privacy of customer information. Expectto see: A high-profile scandal about the misuse of customer information that will lead to greater scrutiny of corporate data protection practices and stricter enforcement of privacy laws and standards.
3. Innovative Customer Segmentation. Marketers tend to focus on traditional market segments, such as the 18-34 age group. But, new thinking and sophisticated yet easy-to-use data mining and campaign management tools allow marketers to target non-traditional customers. Many political parties successfully used this approach in both the Canadian Federal election and the US Presidential election. Expect to see: Marketers increasingly justifying their investments through innovative customer segmentation and going beyond traditional parameters such as demographics to include other characteristics such as shared interests and values.
4. Innovative Marketing. Alternative marketing channels provide a fresh yet effective approach to acquiring new customer channels and sparking market interest or ‘buzz’. Expect to see: Major companies using blogs, online trends newsletters and word-of-mouth marketing as channels to engage hard-to-reach customers at lower incremental costs.
5. Educating the customer. It’s common knowledge that it is less costly to keep an existing customer than acquire a new one. Marketers recognize that they can maximise the lifetime profitability of customers by educating them during and following the acquisition process to reduce the volume of customer service, returns and churn. Expect to see: More destination stores with knowledgeable staff that can provide educational service and sales support.
6. Customer Service Integration. Multi-channel customer service is not delivering on its hyped potential. Although companies offer customers multiple channels, they rarely deliver high-quality service across them all. Instead, customers are expected to provide the same information repeatedly and, in return, receive inconsistent, ineffective service. Expect to see: More companies, realizing that customers ultimately determine which channels they will use and how they will use them, will focus on integration of customer service channels to help ensure continuity for customers.
7. Increase in Proximity Technology. Radio Frequency Identification (RFID) has attracted a lot of market attention, but mostly in the context of supply chain. Proximity technology is a variant of RFID with a variety of uses – such as contactless payment. However, proximity technology can also be used to provide customers with targeted marketing information at the point of sale. Expect to see: Companies becoming innovative with proximity technology. The successful ones will find non-intrusive applications that enhance the customer’s experience.
8. Focused customer strategies and solutions. Many companies have invested in CRM platforms, but there has been a shift away from utilizing CRM programs with large-scale implementations. Increasingly, companies are focusing on specific technology-enabled solutions that address a particular business issue and show a definitive return on investment. Expect to see: Companies investing and realizing the benefits from smaller-scale technology-enabled CRM strategies and solutions that are well conceived, focused and results oriented.