New Study by the CMO Council and the Customer Experience Board Highlights Critical Need For Improved Customer Retention and Handling to Staunch Defections
PALO ALTO, Calif. (August 3, 2009) – Marketers in the $4 trillion global communications industry are facing unprecedented challenges in building loyalty and retaining customers as cut-throat competition and new service models undercut pricing, prey on lucrative customers and disrupt established markets.
According to a new study from the CMO Council and the Customer Experience Board (CEB), free or low-cost interactive digital media channels, social networks, mobile messaging devices, online communities and other forms of content-rich engagement are permanently altering the communications marketplace and redefining customer experience.
The global audit of over 140 industry marketers in the telco, wireless, cable, satellite, broadcast and Internet service provider sectors highlights where and how technology convergence and customer empowerment are bringing rapid and profound change to a once glacial and monopolistic landscape. Entitled “Service Invention to Increase Retention,” the 80-page CEB report finds that incumbent providers believe they must improve processes and systems for customer retention and monetization, enhance service and support, and increase delivery of innovative products if they are to keep pace with changes in today’s communication market. The report now is available for download at www.customerexperienceboard.org.
The huge popularity of social networking and user-generated content is viewed as the most significant digital lifestyle shift impacting the market say 47 percent of survey respondents. In addition, expectations for always-on access to content on every device and more personalized on-demand services and experiences are forcing service providers to re-think their operational structures, product portfolios, customer handling systems, and strategic partnerships and investments.
“Marketers are being challenged to create brand preference and differentiation in a growing and already crowded market,” said Donovan Neale-May, executive director of the CMO Council. “These incumbent communications providers are struggling to adapt to increased innovation, growing price pressures, and heightened competition from new and adjacent market entrants.”
Over 84 percent of respondents to the CEB audit reported the cost of acquiring and sustaining customer relationships is increasing for their companies, and 63 percent are seeing higher rates of customer churn and attrition. The biggest contributors to customer defection are competitive offerings, pricing or fee structures, and inadequate customer service. This is further accenting the need for more adept customer data integration and analytics, better listening, feedback and engagement systems, as well as closer collaboration between IT and marketing groups.
By its own admission, the communications industry is falling down in some key areas of customer experience, including listening and response to core concerns. The biggest sources of customer pain are said to be unmet needs and expectations (59 percent), followed by product/service usability and complexity (43 percent), billing errors (40 percent), as well as quality or relevancy of service or product offerings (32 percent).
Other key findings from the report include:
About the CMO Council
The Chief Marketing Officer (CMO) Council is dedicated to high-level knowledge exchange, thought leadership and personal relationship building among senior corporate marketing leaders and brand decision-makers across a wide-range of global industries. The CMO Council's 4,500 members control more than $120 billion in aggregated annual marketing expenditures and run complex, distributed marketing and sales operations worldwide. In total, the CMO Council and it's strategic interest communities include over 12,000 global executives across 90 countries in multiple industries, segments and markets. Regional chapters and advisory boards are active in the Americas, Europe, Asia Pacific, Middle East and Africa. The Council's strategic interest groups include the Coalition to Leverage and Optimize Sales Effectiveness (CLOSE), Brand Management Institute, and the Forum to Advance the Mobile Experience (FAME). www.cmocouncil.org
About the Customer Experience Board
The Customer Experience Board is dedicated CMO Council special interest group addressing the critical need for communications service providers to optimize customer experience and heighten retention in a highly convergent, competitive, and demanding global market. The Chief Marketing Officer (CMO) Council has brought together the Business Performance Management (BPM) Forum, and key industry and customer service organizations in an ongoing authority leadership program to drive best practices and new thinking among telephony, wireless, cable, satellite and Internet service providers worldwide. www.customerexperienceboard.org