Friday, December 15, 2006

Customer Centricity Isn't Marketers' Major Concern--Yet

Reality can be so annoying. Contrary to my initial impression that “customer centricity” was the major topic at the National Center for Database Marketing conference this week, a close look at the program shows just four of the 45 sessions had this as their focus. The most common topic by far was data analysis and modeling—based on descriptions, I classify 15 sessions in that group. This includes three related to multi-variate testing (e.g. conjoint, discrete choice or factorial designs) and four on Web analytics and targeting.

The next most popular topic was system development and technologies, with ten sessions. This conflicts with another of my informal impressions, that the show had shifted from “how to build a system” to “what to do with the system you’ve built”. Of course, I could argue there used to be many more “how to build” sessions, and that’s probably true. But the larger point remains: even though people have been building database marketing systems for many years by now, it’s still hard and there are always new technologies to incorporate. So the topic will continue to be popular.

The balance of the conference was more fragmented. I counted six sessions on customer list acquisition and enhancement; five related to marketing programs such as loyalty and multi-channel coordination; four on being cuustomer-centric; three on business-to-business marketing; and two concerned with marketing results measurement.

Of course, these are somewhat arbitrary categorizations. They reflect only what the event planners thought was important and not which sessions actually attracted attendees. And it is after all a database marketing conference, so the audience has specialized interests to begin with.

But despite all these caveats, it would be denying reality to claim that moving to customer-centricity is a common priority. Our experience at the Client X Client booth reinforces this: people were very interested in the dashboard technology we displayed, but less intrigued with the customer experience concepts we find so exciting. That doesn’t mean customer-centricity and customer experience management are unimportant or won’t become even more important in the future. But it does mean we have to balance long-term evangelism against marketers’ immediate needs and be sure to address both.

As an aside, the conference program does confirm my impression that the exhibit hall contained many more marketing service vendors than software companies. I count 37 service vendors and 17 software companies. I don't have figures from previous years but am quite certain the proportion of software companies used to be much higher. This clearly reflects the shake-out in the software business in the past few years, and probably also growth in marketing services. I suspect that service agencies are growing faster than the industry as a whole: it seems part of the general outsourcing trend, as well as recognition that the marketing technologies are getting increasingly sophisticated, and therefore harder to run in-house. We need to factor that into our plans as well.

1 comment:

Dale said...

David:

I have posted the comment below at my blog: http://contextrules.typepad.com/transformer/ The Perfect Customer Experience Blog.

David Raab has been walking the aisles at the National Center for Database Marketing and arrived at an unexpected conclusion: Maybe the time for customer-centricity is not yet here. He found that many attendees and exhibitors were well aware of the buzz around customer-centricity but they were expressing doubt that it was not yet time for them to make the shift and some wondering if the shift was needed at all. Talk about the ostrich with its head in the sandhole!

At the same time, I am not really surprised at David's findings.

Customer Experience Management is being driven from the C-level. It is a business strategy that reaches far beyond the marketing department. And, with over 30 years experience in database marketing, I am not at all surprised to see database marketers acting like laggards in this movement.

Marketers tend to stay locked in traditional methods. Look how long it has taken them to see online media as a mandatory that has now finally shifted massive dollars from mass media budgets to targeted online media.

CEM is a movement that is far broader than marketing. It touches every department. It is just as much a focus of the HR department as it is marketing, sales, or customer service. It is delivered in product development and manufacturing as much as it is in brand positioning.

That said, David's discovery is not good for such lagging companies. They will be playing catch-up with competitors who saw this movement as something more than a choice ... should we become customer-centric or not. Those poor souls have not realized that the customer has already won the battle. We either respond or we don't ... and those that don't will not fare well in the future.

Now it would also be instructive to look at a Gartner hype curve ... CEM is still on the front side of the curve and Gartner indicates that this will be a growing cycle for the next 5 to 10 years. But that again makes a point. Technology laggards probably work for the same companies where the marketing laggards live. Good luck to them.

Best wishes

Dale Wolf