Unrealised potential: US study maps route to revenue

The Chief Marketing Officer (CMO) Council and its strategic interest communities include over 6,000 global executives across 57 countries in multiple industries, segments and markets. Regional chapters and advisory boards are active in the Americas, Europe, Asia Pacific, Middle East and Africa.

Sponsored by Ricoh/IBM InfoPrint Solutions Company, the comprehensive international audit of some 650 senior marketers earlier this year revealed that making communications more personal and relevant - as well as more targeted and timely - was among the top strategies for realising greater revenue and profitability from existing customers.

Other leading strategies included addressing under-penetrated markets or new customer segments, as well as finding new ways to up-sell and cross-sell existing accounts.

With only 47% of respondents saying they have good insights into retention rates, customer profitability and lifetime value, the CMO Council study highlighted three key obstacles to optimising the full revenue potential and lifetime value of existing customers. They include:

• Lack of real-time data and analytics that captures insights from across all customer touch points

• Information not only being selectively gathered, but often inaccurate or incomplete

• Data being restricted in its availability and use across an organisation

"It is inexplicable that the vast majority of marketers are still struggling to source and extract meaningful insights from customer data at a behavioural, transactional and account value level," says CMO Council executive director Donovan Neale-May. "Marketing must assert its role as the owner of both customer experience and information and apply this to devising growth strategies that leverage better knowledge of customer opportunity and potential."

In acquiring new business, the Routes to Revenue study shows that global marketers have a far broader and more comprehensive set of strategies, the top six of which include:

• Testing and launching new products aimed at specific market segments

• Establishing new partnerships and revenue-sharing agreements

• Stepping up demand generation and customer acquisition programs

• Expanding geographical presence and intensifying international focus

• Ramping up eCommerce and customer-direct communications

• Restructuring or expanding channels of distribution

When asked what companies were doing to improve top-line and bottom line performance, 40% said they were reducing head count, overhead and/or budgets. Other plans included automating complex and costly processes (39%), outsourcing more services and functions (31%) and reformulating products or minimising packaging to contain cost (28%).

Looking at where marketers were seeking more efficiency and effectiveness, almost 64% of CMO Council survey respondents said they were evaluating all areas of marketing spend to increase yield and accountability. Primary areas of focus included:

• Bringing more discipline to marketing budgeting and spend (47%)

• Leveraging existing resources to enhance customer communications (47%)

• Exploring new customised communications technologies (41%)

• Moving more marketing investments to internet and mobile channels (39%)

• Improving behavioural targeting of advertising and online marketing campaigns (33%)

• Driving adoption and use of CRM and sales automation applications (32%)

According to Sandra Soratti, VP of Strategic Business Development and Transformation for Ricoh/IBM InfoPrint: "There's a big shift to more individualised delivery of marketing messages." Her company is a pioneer in "precision promotion" and the market leader in developing database-driven "transpromo" print-on-demand systems. "The Routes to Revenue findings clearly underscore the value of more personalised offers and interactions across all customer touchpoints, particularly regular monthly communications, such as statements and invoices."

Almost 60% of Routes to Revenue respondents believe that introducing better segmentation, profiling and targeting strategies topped the list of ways companies are trying to better engage core audiences. Other initiatives included:

Adding or improving database marketing systems (49%)

• Acquiring new customer and market analytics capabilities (30%)

• Personalising multi-channel communications and customer touch points (30%)

• Individualising print, email, text messaging, call centre or web interactions (26)

• Building online customer communities and interactive channels (26%)

• Capturing more customer information via the web and at point-of-sale (25%)

More information on the Routes to Revenue study can be sourced from the CMO Council web site at http://www.cmocouncil.org/index.asp