Direct marketing is supposed to be all about reaching out and touching customers and prospects in a dynamic way, as well as managing one-on-one relationships with target individuals through to conversion or actual deals.
But there may be a disconnect between what marketers profess is their commitment to this process and what they actually do.
According to a new Forrester Research study, marketers tend to overestimate the degree of their customer-centricity, as well as the extent to which they segment their targets.
“Forty-five percent of marketers say they are customer-focused, but only one-third say they have a systematic method of delivering the right message to the right person at the right time,” said Dave Frankland, senior analyst at Forrester.
The claim to customer centricity appears to be more an aspiration than a fact, Frankland said. He added that only 11% of marketers admit that customer engagement is the primary factor in their customer communications.
“This tells me marketers are delusional about customer value as a key performance indicator,” Frankland said. “It doesn’t make sense to claim you’re customer-centric but have no engagement approach.”
The study, “Integrated, Customer-centric Marketing,” sponsored by database marketing agency Merkle Inc., polled 149 senior marketers this summer by phone about current marketing metrics, followed by in-depth interviews with a smaller subset of marketers.
One of the metrics most pertinent to direct marketing is the careful segmentation of database lists. In the Forrester-Merkle study, 77% of marketers said they segment their lists by demographics, and almost half said they have a segmentation scheme consistent through their entire organization.
However, the study also revealed that only 27% say their marketing is integrated across brand and direct communications. This often means that customers receive one offer presented to them in one channel and an entirely different offer in another channel—or that they receive messages poorly tailored to where they are in the buying cycle.
“How many times do we see marketers do all this segmentation, and then when it comes down to getting out the next communication, they just hit ‘send to all’?” said Peter Platt, chief digital offer at direct marketing agency Catalyst Direct. “Obviously that’s something to avoid. The idea of customer centricity, of having knowledge about what’s important to them, is critical.”
Gathering enough information for segmentation at first touch can be dicey. Marketers are loath to ask too many questions of first-time inquirers, for example, for fear that they’ll abandon the information-gathering process.
But Platt said that segmentation can develop in stages by asking for additional information in subsequent communications. In these later requests for information, gaining another piece of information, such as job title, can be critical to customer-centricity.
“While there are core decision-makers in a company, there a significant number of influencers who have decision-making control,” he said. “The CFO needs to know about cost-savings. IT needs to know if the product is fast and requires less maintenance; and the CEO needs to know if it’s a safe purchase. Recognizing the different influencer audiences will prevent you from sending inappropriate messages.”
COMBINING SILOED KNOWLEDGE
The greatest barrier to effective customer-centricity is whether a company’s organization is based on product or operational silos, according to Forrester/Merkle. Their study revealed that 52% of marketers said their companies have no single “ownership” of customer management, and 46% said their companies are too siloed by business line, products and brand. (This may have been partly due to the survey’s demographic target of large companies. All respondents represented companies with greater than $1 billion in sales, with nearly half from companies with at least $10 billion in sales.)
“If manufacturers operate in silos with separate product groups, they probably keep their customers that way, too,” said Bernice Grossman, president of database marketing consultancy DMRS Group. “Thus, there is a lot of work that has to be done to find out who bought which product when and put that information together to be able to do some up- and cross-selling.”
Knowledge about customers increasingly can be gained from social media interactions, said Dan McQuiston, chairman of the marketing and management department at Butler University. That presents opportunities for two-way communications, he said.
“The two most dangerous words in marketing are ‘we think,’ ” McQuiston said. “The real customer-centric companies focus on what ‘they think,’ finding out what customers want and the promise they’re looking for from the company. Most companies don’t have a handle on that.
“The smarter companies have an orchestrated social media strategy, chat rooms and bloggers to gain this information,” he said. “I tell marketers, just stay in touch with your customers and ask them what they’re looking for. If you ask them, it’s amazing what they’ll tell you.”
For business-to-business companies in particular, part of the barrier to effective customer interaction may be the misuse of the customer information they already have, Forrester’s Frankland said.
“We found that b2b marketers often use customer intelligence to drive nonmarketing functions, such as informing business operations and making staffing decisions,” Frankland said. “It’s encouraging they they’re using customer knowledge to make broad decisions, but there is a big opportunity to use it for more marketing purposes.”