Technology Marketers Challenged to Reorganize Around Customers

Despite an increased focus on customer engagement, most B-to-B technology companies continue to fall far short of meeting customer expectations and commitments, according to the results of a major research initiative by the Chief Marketing Officers (CMO) Council. Most technology vendors badly overestimate their effectiveness in addressing customer needs, while a majority of customers feel ignored and trapped in vendor relationships that are marred by broken promises.

These are among the findings of Profitability from Customer Affinity, a new study that advocates major customer-centric changes in the way technology companies measure their marketing effectiveness. The study uncovers profound disconnects between vendors and customers and finds that IT companies risk serious customer alienation and lost business if they don’t realign their organizations around customer needs through improved co-innovation and cooperation.

Some 99 percent of customers surveyed said they would either scale back or terminate relationships with vendors who fail to build customer trust. Meanwhile, less than seven percent of customers believe their vendors are extremely well-aligned with their needs.

In fact, customers say that brand awareness and existing relationships — often thought to be leading factors in purchasing decisions — have little bearing on their decision to do business with a vendor or channel partner. Customer decisions are influenced by competence, quality service and support, and a sense of true commitment from vendors. Yet vendors continue to direct budget toward initiatives that are ineffective at building customer affinity, the study argues.

Among key findings of the new study:

• Fifty-six percent of vendors perceive themselves as being extremely customer-centric, but only 12 percent of customers agree. An overwhelming majority of vendors (85 percent) are convinced that they are getting better at responding to customer needs, but 45 percent of customers disagree.
  
• More than half of customers surveyed described their relationships with vendors as "dependent and captive," "struggling for common ground," or "combative and adversarial." When asked to describe their relationships with the channel, 45 percent of customers surveyed evaluated their channel relationships similarly.
  
• More than 30 percent of customer respondents said they would terminate relationships with companies that fail to gain their trust; 62 percent would scale back existing engagements, while 7 percent would no longer consider the vendor for future business.
  
• Co-innovation with customers is vital to building customer affinity. Nearly six out of 10 customers say co-innovation is extremely or very important, with another 30 percent agreeing that it is at least somewhat important. Customer responses indicated that collaborative, two-way conversations — followed by continuous improvement — build customer affinity.
  
• Vendors seem to understand that channel partners truly are partners in their success, and that going to market effectively with the channel is critical to maximizing their value to customers. Yet only 8 percent of vendor marketing respondents said they do an extremely good job of teaming with the channel to build stronger customer affinity.

The survey results highlight the challenge marketers face in driving organizational and cultural changes to focus the business around customers. Customers want vendors to rethink the structure of how they embrace, interact with and respond to customers. Cultivating higher customer affinity will lead to better business performance and higher profitability — if companies will pay close attention to the qualities and factors that customers care about.

More information on Customer Relationship Management can be found at www.CRMindustry.com