Customer affinity trumps brand awareness: CMO Council 23 December, 2007 By Patricia Pickett

For the study, titled "Profitability from Customer Affinity," the Palo Alto, Calif.-based organization interviewed more than 1,000 B2B technology buyers, IT marketing and customer relationship executives and their channel partners in order to gauge the marketing effectiveness of technology companies.

According to the CMO Council's executive director Donovan Neale-May, brand awareness, value and recognition are typically used to measure the success of marketing efforts. However, "this is not something that we believe is customer-centric and it is not based on customer experience," Neale-May said. "Marketers have become increasingly removed from their customer audiences."

Many marketing departments have focused on big campaigns because "that's where all the action is," Neale-May said. Plus, they're facing a lot of pressure for revenue growth. However, they are missing out on other ways to approach revenue generation that address customer needs at the same time, he noted. "There's a lot of pushing out of messages . . . but not a lot of in-depth conversations. Many vendors aren't co-designing products with customers they don't have customer councils and advisory boards. Their marketing departments operate in a vacuum."

As a result, there is a huge disconnect between how tech vendors think they're doing on the customer front, and what their clients actually think. For example, most vendors badly overestimate their effectiveness in addressing customer needs. While 56 per cent of vendor respondents in the survey perceived themselves as being extremely customer-centric, only 12 per cent of customers agreed. In addition, although 85 per cent of vendors believed they were getting better at responding to customer needs, 45 per cent of customers disagree.

"No matter how much (vendors) are advertising or promoting a product, if they're not delivering a satisfactory experience, that's wasted marketing dollars," Neale-May said. "Marketers have to step into the organization, get that customer-facing touch point information and act on it."

Not enough attention is being paid to the power of peer communication, said Neale-May. "Vendors are not taking advantage of the fact that customers trust peers more than anyone else," continuing to send out e-mails, distribute fancy promotional booklets and make phone calls when those things ultimately don't play the biggest role in forming a client's perception. If one customer is not happy with a vendor's service, you can be sure other customers will eventually find out about it.

Many customers also feel ignored and trapped in vendor relationships that are marred by broken promises. More than half of customers surveyed described their relationships with vendors as "dependent and captive," "struggling for common ground," or "combative and adversarial." Many feel like vendors cease to be responsive once the customer is locked into an agreement, Neale-May said. When asked to describe their relationships with the channel, 45 per cent of customers surveyed evaluated their channel relationships in a similar way.

Nearly six out of 10 customers said co-innovation is extremely or very important, with another 30 per cent agreeing that it is at least somewhat important. Customer responses indicated that collaborative, two-way conversations -- followed by continuous improvement -- are key.

Vendors seem to understand that partnering with the channel is linked to success, and that going to market effectively with the channel is critical to maximizing value to customers. Yet only 8 per cent of vendor marketing respondents said they do an extremely good job of teaming with the channel to build stronger links with the customer.

Finally, more than 30 per cent of customer respondents said they would terminate relationships with companies that fail to gain their trust; 62 per cent said they would scale back existing engagements, while 7 per cent would no longer consider the vendor for future business.

To address these issues, the CMO Council is advocating a new way of measuring marketing effectiveness, dubbed "customer affinity." This method involves analyzing the depth of the customer-vendor relationship to determine its capacity for sustainability, strategic value and long-term engagement, digging into product relevance, value-added services, co-innovation, problem resolution, customer interactions, message resonance and communications consistency.

"We are pushing for more analytics, insight and a better marketing approach to ensure that vendors are influenced and geared toward enhancing and satisfying and delivering a consistent customer experience," Neale-May added.