Aberdeen Report Cites Need for Customer Value Models

Aberdeen Group recently released “Creating a Customer-Centric Marketing Organization” available here (registration required). The paper is based on a survey of senior marketing executives at 500 small and mid-sized businesses. It was designed to identify the marketing practices of best-in-class customer-centric companies and to determine whether those companies actually report better results.

No prize for guessing the right answer. They do.

Of course, the devil is in the details. Aberdeen found “companies that adopt closed loop marketing processes are more than three times as likely to report a greater than 50% return on marketing investment (ROMI) than those that do not”. It defines a “closed loop process” as one that “successfully brings together the right metrics, differentiating capabilities, and integrated and sophisticated technologies.”

What they really mean by that will sound very familiar to regular readers of this blog. You know how I’m always droning on about the importance of customer value models? Well, it’s not just me: Aberdeen’s top two action recommendations are “define how to measure customer lifetime value models and preferred customer profiles” and “develop competencies around customer modeling, segmentation, product/channel mix and predictive analytics.” So there.

In fact, most of the paper’s five “key value findings”—structured marketing planning, customer information integration, customer profitability modeling, measuring the effectiveness of each interaction, and responding to customer behaviors with personalized and event-based interactions--mirror Client X Client themes. It’s not that Aberdeen has been listening to us (or vice versa), but that we’re all looking at the same situation and drawing similar conclusions.

Actually, one of the more interesting comments in the paper was another point that we often discuss within Client X Client, but rarely raise in public: that the technology needed for competent customer experience management is often already in place. The real barrier is knowing how to connect the pieces and what to do with them. Or, as Aberdeen puts it: “Lagging and average companies are not ill-equipped with technology products, rather they lack the integration and sophistication to realize higher results.”

I do have some complaints about the paper. It’s a bit more focused on outbound marketing than I’d like, the scope is largely limited to marketing rather than all customer experiences, and it’s hard to understand some of their figures. But it will provide good support for marketers trying to take their company to the next level of customer management, and that’s what really counts.