The current economic expansion is five years old, and IT executives expect the good times will continue: 80 percent of respondents to this month's Customer Strategies Survey say they are focused on revenue growth, not on cutting costs. But when the inevitable recession arrives and 2006 starts to seem like the good old days, will your company look back with satisfaction at the way it courted new customers or with regret over opportunities left on the table?
Our study suggests it will be the latter, despite the growth of e-commerce and "long-tail" niche-market tactics. Why? We found four main reasons: Companies are using only a fraction of the massive amounts of customer data they collect; many firms do not use analytics, salesforce automation, and other sales and marketing technologies, and often fall short when they do; company Web sites are often not among the most profitable sales channels; and customer-service problems are getting worse, despite increased Internet use. No wonder the tech strategies companies use to serve and profit from customers fail to meet expectations about a third of the time.
Companies will surely get better; the Internet era is young, and we have a lot to learn. But CIOs can do their share by continuing to push for integration and data quality, and by making smart investments in appropriate technologies. Remember: There's no such thing as a return on missed opportunities.
For more data and analysis, see CIO Insight's Research Center blog at go.cioinsight.com/researchcentral
Finding 1: The hunt is on for new customers; most companies continue to favor growth over cost-cutting.
Finding 2: Nine out of 10 companies sell on the Web, but only half say the Internet is among their most profitable channels.
Finding 3: More IT spending is directed to customers.
Finding 4: Companies are still suffering from data indigestion.
Finding 5: Sales and marketing technologies are often not deployed and frequently fall short when they are.
Finding 6: Despite IT's support for customer service, problems are not diminishing.
Read our previous surveys on customer strategies and related topics:
July 2005 Customer Strategies Survey: Can You Profit as Customers Get Smarter?
October 2005 Business Intelligence Survey: Business Intelligence Is Valuable, but Falls Short of Its Potential
August 2004 CRM Survey: Will Old Problems Sink New Users?
September 2003 E-Business Survey: Is E-Business Finally Starting to Deliver?
CK Prahalad & Venkat Ramaswamy on CRM
Gary Hamel on Thinking about the Customer
Zappos.com: Success Through Simplicity Continental Airline's Tech Strategy Takes Off
Morgan Stanley: Trading Sideways
Pipemaker Learns a Hard Lesson in Customer Profitability
Coldwater Creek: Using One Retail Channel to Fund Another
Harrah's Entertainment Inc.: Make Every Customer More Profitable
Megachurch Megatech: Using IT to Spread the Word
Individual Knowledge Doesn't Always Help Understand Customer Groups
Cross-Selling at Cross-Purposes
Bad E-Mail Response Equals Bad Customer Relations
Five Ways to Improve Online Customer Service
Customer Data Is Growing at 51% a Year
How Do You Plan to Grow?
Loyalty Programs: Use and Success Rates
Marketing's Research Agenda: Customer Insight, Customer Engagement