|BACKED BY A MAJOR NEW study, the CMO Council is urging B2B companies to create marketing performance models based on “customer affinity,” a concept that the Council concludes is far more meaningful than “soft metrics” such as brand awareness/satisfaction or response rates to marketing campaigns.
The study, “Profitability from Customer Affinity,” was conducted in the B2B technology sector, but has far-reaching ramifications for many markets.
“We’re pushing to sensitize the marketplace to the reality that engagement and interactivity with customers is far more meaningful and valuable than just blasting out one campaign after another, or measuring communications effectiveness,” sums up CMO Council Executive Director Donovan Neale-May.
The study confirmed that customers rank brand perception low on the totem pole in terms of what drives their relationship and purchasing decisions, and the council believes that traditional brand measurements actually reinforce ineffective marketing practices and “severely limit the role and vision of the CMO.”
In contrast, companies’ ability to develop strong interaction/ engagement with customers has “enormous impact” on their returns, and may actually be the most essential competitive advantage and determinant of their overall business performance in the years ahead, stresses Neale-May.
What exactly is customer affinity? It is a set of disciplines that includes brand awareness, trust and credibility, but goes beyond “surface metrics” like customer satisfaction, loyalty or advocacy. Affinity “digs deeper into critical aspects of the customer relationship and lifecycle experience,” including product relevance, value-added services, co-innovation, responsiveness, business practices and policies, problem resolution, value of customer interactions, clarity and resonance of messaging, customer knowledge, communications quality and consistency, explains the report. Marketers, it stresses, “need to play a significant role in defining, orchestrating and activating all of the factors impacting customer affinity.”
B2B technology was chosen as the focus of the initial affinity study because of its size and importance (annual expenditures of $488.5 billion in the U.S. and $1.5 trillion worldwide) and its unique, complex set of customer relationship challenges, explains Neale-May. A major deliverable was the Customer Affinity Index (CAI), which measures how leading technology companies stack up in terms of customer equity and attachment.
However, the Council views this study as a first step. Going forward, it plans to continue to research what drives customer affinity, hone metrics and use the methodology created for the tech sector to conduct similar studies in a number of markets, including financial services, Neale-May reports. The ultimate goal: Give companies within a market the ability to create their own, hard performance metrics based on the customer affinity model.
In the tech market, the Council conducted extensive qualitative and quantitative research over a six-month period with senior-level IT buyers/specifiers; channel solution providers; marketers with IT manufacturers/vendors; and customer relationship, service and call-center executives.
The findings revealed significant disconnects between customer and vendor priorities and communications. For starters, contrary to traditional marketer perceptions, branding isn’t all that important to customers. Customers’ top five factors in evaluating and selecting a tech vendor are level of competency, caliber of service and support, level of commitment, compatibility with existing infrastructure and quality of thinking-again, reaffirming the alignment theme. Brand perception/promise ranked in the bottom five responses.
Customers and vendors/channel partners also disagree about what it means to be “customer-centric.” Customers say that the most important factor is strategic alignment of the vendor’s organization with the customer. Meanwhile, alignment is “neither a top priority nor a real competency” among vendors/channel partners, concluded the researchers.
Over half (52%) of customers said that “organizational, operational and cultural alignment around the customer” best characterize a customer-centric company, compared with just 40% of marketers and 35% of channel partners.
No shock, then, that only 21% of vendor marketers themselves, and just 3% of channel partners, view vendors as being “extremely well-aligned” with the end-use customer.
More of the telling data:
* 56% of vendors perceive themselves as being “extremely customer-centric,” but only 12% of customers agree. In fact, fewer than half (47%) rank vendors as moderately customer-centric, although 65% rank channel partners as falling in this category.
* 85% of vendors believe they’re getting better at responding to customer needs, but 45% of customers disagree (and 41% don’t view channel partners as getting better at responding).
* 52% of customers described their relationships with vendors as “dependent and captive,” “struggling for common ground” or “combative and adversarial,” and 45% described their relationships with channel partners in the same terms.
* Customers and vendors by and large agree on the importance of co-innovation and collaboration in product and services development and decision-making, but they differ somewhat regarding which co-innovation factors are most important.
Customers’ top three factors are help desk and customer support center feedback channels, field technician and sales engineer visits, and input sessions around new-product road maps. Vendors’ top three are executive visits and interactions, the help desk/customer support channels, and beta visits and interactions.
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