Thursday, October 19, 2006

Aberdeen Group Study Raises Question about Marketing Serivces Providers

Aberdeen Group ( recently released “The Precision Marketing Benchmark Report”. It found that companies making “best in class” use of precision marketing tools—which apparently means treating customers differently based on their value—enjoy higher customer retention, cross-sell and up-sell revenues, and customer satisfaction than companies that don’t.

I haven’t read the study itself, since Aberdeen’s Web site informed me “Our records indicate you are a Technology Services Provider” and therefore not eligible to receive a copy. Since I’m not a TSP, this mostly makes me wonder about the quality of Aberdeen’s research. But it also means I have to rely on an article about the study in, which reports what I consider the most interesting finding: “only 16 percent of leaders had invested in marketing service providers or agencies, while 40 percent of other companies had gone this route.”

This is real news. That more successful companies have more tools is expected, and doesn’t prove the tools caused the success. (It could just be that more successful companies have more money for tools.) But you might expect the more successful companies to be more active in customer management in general, and thus also spend more on marketing service providers. That they don’t suggests a significant negative correlation between success and use of marketing services providers.

Again, this doesn’t prove causation: maybe unsuccessful companies can’t afford to buy tools, or (more likely) to hire skilled staff, and thus have to use marketing services providers as a cheaper alternative. But perhaps Aberdeen’s Leslie Ament has it right when she is paraphrased by as saying “software provides ample advantage over human services providers”.

I imagine the marketing services providers would disagree. Ironically, Aberdeen itself was just purchased by marketing services provider Harte-Hanks.

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