How IT Can Help Attract New CustomersBy Allan Alter | Posted 01-22-2008
How IT Can Help Attract New Customers
Customer service is the No. 1 business priority for IT executives in 2008 but it's not due to altruism. Without sales, few IT organizations would have reason to exist.
That's why our third Customer Strategies Survey examines the priorities, strategies and technologies used in sales and marketing as well as customer service.
The study shows that the Web sites that make more money than others are designed to uncover the product features customers want most and to close sales. Many companies are still in walk-before-you-run mode when it comes to Web marketing tools and techniques and use of smart phones for marketing purposes. Early adopters can sprint past competitors if they can get ahead of the IT and marketing learning curves.
Companies are making progress on many customer service problems--a change since our November 2006 Customer Strategies Survey. Many organizations are increasing IT staff and developing new applications to further improve customer service. That's good news for customers and IT professionals.
But is it enough to satisfy CEOs and chief marketing officers? Probably not. Acquiring new customers is more important than customer retention at many companies. Using metrics in marketing decision-making is a top concern for marketing executives at the Marketing Science Institute, yet IT executives place measuring sales and marketing effectiveness 10th on their priority list. Process-minded IT organizations should not be so focused on improving service that they pay insufficient attention to other sales and marketing priorities. In a troubled economy, companies need all the help they can get.
FINDING 1: IT on Service and Retention
FINDING 1: IT Focuses on Customer Service and Retention
But are IT's priorities in the right place? Our 2008 Top Trends survey found customer service is the No. 1 priority and business intelligence is the most important technology this year. Similarly, the 2008 Customer Strategies survey finds IT puts most of it effort into serving current customers, and in analyzing customer needs and behaviors. However, despite the worrisome economic climate, companies are as likely to focus on customer acquisition as on customer retention. The dominance of customer service and retention-focused goals and projects begs the question, Are companies so engrossed in working with the data they've collected on existing customers that they aren't making sufficient use of IT to win over potential customers?
FINDING 2: Service Priority No. 1
FINDING 2: Making Customer Service Priority No. 1 Pays Off
Most companies are striving to improve services rather than add services. Our 2006 Customer Strategies Survey found customer service problems worsening. It seems that, thanks in part to the high priority given to customer service and process improvement, there has been real improvement--most notably in billing. The exception is call centers: Although just 19 percent now say they use offshore call center staff, more respondents say there is dissatisfaction with call center reps now than in 2006. But the biggest surprise is how few report that spam or lost data is harming customer relationships despite the publicity about these problems. The survey also found companies that focus on existing customers are more likely to focus on improving services while acquisition-minded companies are more likely to focus on adding services. One beneficiary of these new services is IT professionals; nearly half our respondents are adding IT staff as part of their customer service programs.
FINDING 3: Online Experience
FINDING 3: Build the Online Experience Around Closing Sales
About seven of 10 companies generate revenues through online sales, primarily through direct sales on their own Web sites. Companies generating an above average share of their revenues online not only offer product descriptions but personalize the information to buyers' needs. Web sites that generate above average sales are more likely to provide product recommendations, comparisons and product configuration services to help customers find products that best meet their needs. They also engage customers with video, seek customer suggestions through product co-development and surveys, and direct customers to channel partners. The lesson here: Web sites that generate more revenue are designed to close sales and generate information about the product features customers want.
FINDING 4: Marketing Novices
FINDING 4: Most Companies Are Web Marketing Novices
Web 2.0 has to wait until Web 1.0 marketing is mastered. Other than e-mail newsletters and search engine optimization, organizations make limited use of the many sales and marketing tools the Web offers. One reason, besides their novelty: Web marketing tools are often less helpful than expected. Web 2.0 technologies such as social networking are rarely used for marketing, although companies monitor blogs and Web sites, and IT executives are interested in the use of social networks. Web marketing technologies have promise; they are more often part of the mix at companies with above average online revenues. CIOs can help by advising line managers how these technologies can be used and what doing so would involve.
FINDING 5: Mobile Phones
Finding 5: Few Use Mobile Phones To Provide Services
Companies haven't yet reached the tipping point to rapid adoption of mobile customer service, sales and marketing applications. True, 40 percent are or soon will provide information about their products or services via mobile phones or PDAs. But with pilot programs in the single digits, it may be a while until many more companies launch their own mobile marketing and service applications. But companies are reticent about providing account or personal information via mobile means. Given the higher security risks--easy to lose, easy to steal, lack of security software--for mobile devices, companies must tread carefully.
FINDING 6: CIOs Create Strategy
Finding 6: CIOs Help Create Marketing and Sales Strategy
With online sales, marketing and service so deeply dependent on IT, CIOs should and do get involved at the highest level in those decisions. Yet CIOs are split on whether or not they help decide on sales, marketing and service software. That suggests line executives and CEOs often have the final call on which systems they want to install, CIOs defer decisions down to lower level staff,or that they limit themselves to setting guidelines and standards.