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If Marketers Shift to Customer-Centric Focus Will They Gain Greater ROI?

Over at CMO Magazine's "Analyst View" research analysts Claudio Marcus and Kimberly Collins of Gartner offer the Top 10 Marketing Processes for the 21st Century.  The article says that by 2007, marketers that devote at least 50% of their time to advanced customer-centric marketing processes and capabilities will achieve marketing return on investment that is at least 30 percent greater than that of their peers, who lack such emphasis.  Yet, also by 2007, fewer than 20 percent of marketing organizations among Global 1000 companies will have evolved enough to successfully leverage customer-centric, value-added processes and capabilities.  This strikes me as odd since almost everywhere we look these days the focus on the "consumer" is more apparent than ever.  Look at the way advertising is changing - viral and online ads are popping up everywhere. And the blogosphere is playing a major role in the way companies interact and gain knowledge from consumers. I wanted to take a closer look at what Gartner had to say about the low percentage of companies shifting focus. 

Gartner believes marketing organizations must move away from a tactical focus on day-to-day activities and place more emphasis on high-value business processes that add value to customers, enhance brand equity and produce stronger, more-predictable return on investment (ROI).  So how do companies make this change?  Although it will vary by industry and size of the company, here is the suggested list:

  1. Marketing operations management: Due to increased competitiveness, product and channel proliferation, and greater market, media and interactive channel fragmentation, the complexity of marketing operations has increased. As such, the marketing function must strive for higher degrees of process standardization and automation to drive greater efficiency and productivity, as well as better alignment of resources and activities with corporate objectives. TRANSLATION - if you haven't already - need to tie marketing into the rest of the organization.
  2. Marketing visibility, accountability and value measurement: As the sheer number and complexity of marketing efforts have increased, the ongoing visibility of marketing activities across the entire enterprise and all its distribution channels has become a significant challenge. TRANSLATION - Companies must have a measurement or metrics program and it must be tied to the rest of the organization.
  3. Customer and market insight generation: Beyond traditional competitive analysis, market research and customer surveys, enterprises must be able to capture and leverage vast amounts of customer and market information.  OPINION - I would suspect all marketing departments are starting to realize this now - and those who are not will soon.  The key piece marketers should look at is the ability to integrate this "new realm of digital influence" by understanding and analyzing online consumer AND business discussion.
  4. Customer-value-based segmentation: The practice of segmentation is not uncommon, but among many enterprises, it remains mostly product-centric, focusing on demographic or "firmographic" (that is, demographics related to business statistics) characteristics that align products to market segments.  OPINION - Here is another area that marketing can gain a vast degree of knowledge by looking at unfiltered consumer-generated media. 

The other "processes" are available on CMO Magazine's site.  If these numbers are correct, marketers are going to have to play catch up, and fast.  It might be more reasonable to say that many companies do recognize they have to make this shift - its just matter of time before they take action.

In fact (but also on a side note), an article in today's New York Times offered a preview of a survey released at the Association of National Advertisers "2005 Marketing Accountability Forum".  The survey reveals that 61.5 percent of respondents said it was important to them to define, measure and take concrete steps in the area of advertising accountability. But only 19 percent said they were satisfied with their ability to take those steps. (The survey was conducted by the advertiser association and two partners, Marketing Management Analytics, part of the Aegis Group, and Forrester Research.)  In an excerpt from the NYT's article:

Back in the day, "marketing had a rock-star mentality, able to do what it wanted," said Ed See, executive vice president and chief operating officer at Marketing Management, which is based in Wilton, Conn. "But we're not living in a rock 'n' roll world anymore," he added. "Elvis has left the building."

John Nardone, executive vice president and chief client officer at Marketing Management, said the survey showed that it was more important than ever for advertisers to give their marketing departments the types of controls, models and "repeatable processes" they use in areas like supply-chain management and human resources.

Ironically, there are research companies and marketing services companies that already offer these types of services and can help marketers overcome hurdles and adapt to these processes.

Posted by Jim Nail on July 27, 2005 at 01:11 PM | Email this post Permalink

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According to a recent CMO Magazine article, Gartner predicts the top 10 marketing processes for the 21st century (here - via cymphony marketing) First, here are some of their assumptions:By 2007, marketers who spend 50% of their time on advanced,... [Read More]

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