Anyone involved in web presence knows it is imperative to engage customers in order to gain their attention and win their business. Yet, most companies grapple with many moving parts in order to execute on this business imperative.
In IBM’s Institute for Business Value 2010 "From Social Media to Social CRM" survey, 88 percent of CEOs said their most important priority for the next five years was to be closer to customers. Given the lower barriers to entry in nearly every industry, this priority is certainly understandable.
Customers have more product and service choices than ever -- and less reason to be loyal to their suppliers and service providers. As a result, they increasingly make purchase decisions based on how engaging they find a supplier’s products and services, and their ease of access.
In their landmark study published in the Harvard Business Review entitled, “Zero Defections: Quality Comes to Services,” Frederick F. Reichheld and W. Earl Sasser, Jr., asserted that a 5 percent increase in customer loyalty can increase profits from 25 to 85 percent.
And 72 percent of B2B marketers rated customer engagement as a high priority, but 55 percent gave their organizations’ customer engagement practices a grade of C or lower, according to the "2010 Customer Engagement Study" by the Business Marketing Association (BMA) and SPSS.
Plenty of organizations are adopting customer relationship management (CRM) solutions from companies like Salesforce.com in response to these issues. However, I believe a broader group of cloud-based customer engagement management (CEM) is going to emerge, which encompasses CRM, social networking, marketing automation, and a variety of other related applications aimed at strengthening the bond between a supplier and its customers.
The CEM market today is highly fragmented, consisting of a mix of on-premises and on-demand/cloud solutions, spread across a wide array of functional capabilities. The challenge facing CIOs is how to help corporate executives and business unit managers sort through the myriad of piece-parts to build a unified CEM capability that captures timely customer data and provides insights into how to respond to this information. In order to improve the quality of these experiences and strengthen their customer engagement processes, Gartner expects CMOs to command more IT spending power than CIOs by 2017.
How CIOs and CMOs team in this effort will depend on how they leverage today’s more flexible cloud alternatives. Of course, the key is deploying CEM solutions that can generate timely data, collate that information to generate meaningful insight, and enable administrators to share that data so business executives and end-users can properly act on the analysis.
— Jeffrey Kaplan is managing director of strategic consulting firm ThinkStrategies; founder of online directory, the Cloud Computing Showplace, and a loyal Boston sports fan.
For example, magazine publishers. I never renew a subscription. Why should I when they cater to the new subscription, by flaunting a much lower subscription rate.
Tweaking the B2B relationships should pay off in noticeable results since business loyalty might be a tad more stable than consumer relationships. Consumers are getting used to price comparison shopping in everyday life, while businesses might treasure service and stable relationships among suppliers more than a slighly lower price.
Selling more services to an existing customer costs less than to a new customer and existing customers who are satisfied are more likely to buy more services. Therefore, they are more profitable.
@jkaplan that is very true. Yet, amazingly enough, businesses forget that basic fact when they offer special deals only to new customers and exclude their existing customers from them. Without loyalty on the business side, there is not much incentive for the customer to stay on and not look for better deals elsewhere.
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