PROPHET SURVEY: CUSTOMER TOUCHPOINTS CRITICAL BUT MARKETERS' INFLUENCE LACKING

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Despite their understanding that it's the customer-centric activities that best drive business growth, senior marketers admit to having failed to take a role in the functions that are closest to them.

Such were the findings of Prophet's 2005 State of Marketing Survey, conducted in partnership with IDG, which asked nearly 350 senior-level marketers for their take on marketing's influence on business growth. Prophet is a global consultancy to Fortune 500 companies on the integration of brand, business, and marketing strategies.

In identifying the most critical aspect to achieving growth goals, nearly one-third of respondents cited customer service and delivery and the customer experience, followed distantly by business strategy and marketing strategy. (Interestingly, the traditional MarCom tools of advertising and promotions only eked out a 1% response rate each.)

Yet the survey revealed marketing's disadvantage in applying those customer insights where it matters - at the touchpoints themselves. A significant percentage of respondents said they played no role in such critical functions as customer service (33%); pricing (43%) and the sales force (45%).

"Marketers know the increasing power of the customer, and of the importance of touchpoints that extend beyond marketing communications," said Prophet Senior Partner Scott Davis. "They're realizing that traditional tools aren't as significant as the need to grow their understanding of customer behaviors and ways to develop long-term profitable customer relationships. Yet they need to expand their sphere of influence if they hope to drive the material impact that management expects of them."

Survey respondents reported a mixed bag in terms of relationships across the organization. On the positive side, 86% of respondents categorized the relationship between corporate and business unit marketers as successful. Yet over 20% described their relationships with Human Resources and Information Technology as below average or not at all successful. Said Davis: "HR and IT are positioned to equip employees to deliver on the brand promise and capture customer insights. Marketing must do a better job of collaborating with these functions in order to play a more significant role in driving growth."

In other survey findings:

• More than half the growth experienced by respondent companies over the past 12 months came from existing customers, with 25% from new customers. However, 45% of respondents believed future growth will come equally from existing and new customers, "suggesting new customers are expected to deliver more growth than in the past," according to Davis. "That's tricky given the difficulty and expense of chasing new customers versus deepening relationships with current ones."

• In terms of driving future growth, more than two-thirds of respondents see new products and services, and improved branding and marketing as key growth drivers, whereas only 38% cited improved branding and marketing as key drivers in the last 12 months. Davis noted that this points to an increased confidence in marketing's contribution to the top and bottom lines.

• In looking at growing versus shrinking companies, both groups rank the integration of brand, business, and marketing strategies highly, yet growing companies seem to do it better - with 76% (versus 55%) marking themselves very or moderately successful at it. Moreover, they are achieving growth without having to spend more to do it, and, in fact, invest about the same percentage of revenues in marketing as do shrinking companies.

• Respondents uniformly ranked strong competition as the greatest past and future barrier to growth. Davis warned that this external perspective might prevent marketers from attending to internal issues that were also cited as growth barriers, such as inconsistent customer experience, insufficient investment in marketing and advertising, and ineffective allocation of marketing investment.

"With budgets smaller and accountability greater, the trick for marketers is to invest more wisely - not just more," said Davis. "By investing in levers that most influence customers and taking advantage of existing synergies, marketers can better fulfill their mandate to impact both top- and bottom-line growth."

10/17/2005

Contact:
Sally Saville Hodge
Hodge Communications
312.666.6662