Next GeNeratioN

R E S E A R C H

New Survey Highlights Changing Priorities And Current Challenges Around Building Loyalty And Targeting Marketing Efforts

T h e

O fCustomer LifeCyCLeMarketing

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2The Next Generation of Customer Lifecycle Management

Table Of ContentsExecutive Summary...............................................................................................3

Tracking Lifecycle Of Current Customers Is Top Priority...........................................4

The Lifecycle Marketing Landscape..............................................................6

The Roadblocks In The Way Of Lifecycle Marketing.......................................8

What’s Ahead...........................................................................................10

About The Survey Sample...........................................................................11

About Demand Gen Report and Eloqua.......................................................12

3The Next Generation of Customer Lifecycle Management

Executive SummaryBoth B2C and B2B marketers are juggling multiple priorities when it comes to their customer marketing programs – investing resources in finding new customers and increasing the loyalty, and ultimately the profitability, of their existing clients. In order to address these new imperatives, marketers are looking for new solutions to help manage multiple systems, track customers’ behavior across multiple channels, improve their data integrity and bolster their ability to build a dialog with customers via multi-touch nurturing messages.

Marketing and sales departments must keep their eyes on generating leads and new revenue. However, many marketers are finding that the ability to communicate with both prospects and customers in a consistent and relevant way across multiple channels is the essential ingredient in building a lifecycle marketing strategy.

When asked about their top customer marketing priorities, 68% of those responding to a survey conducted by Demand Gen Report and Retail TouchPoints reported that identifying their most loyal/valuable customers was at the top of the agenda in terms of customer marketing and customer lifecycle management. Coming in a close second on the customer lifecycle priority list was acquiring new customers (52%), followed by tracking cross-channel behavior (43%).

Looking at trends for 2013, respondents agreed that the success of marketing programs will be defined more broadly than the current standard metrics – counting clicks, downloads and opened emails.

While these will remain important ways for companies to measure the impact of their marketing programs, they will also analyze their marketing efforts so that they are not only appealing to prospects but current clients as well.

This white paper will dig deeper into the survey results, including:

•An examination of marketing and loyalty management challenges;

•Status of current marketing initiatives;

•The quality of companies’ current databases; and

•Successful channels for nurturing customer relationships.

68% of survey respondents reported that identifying their most loyal/valuable customers was at the top of the agenda in terms of customer marketing and lifecycle management.

4The Next Generation of Customer Lifecycle Management

Tracking Lifecycle Of Current Customers Is Top PriorityWhen asked to rate the importance of focusing on existing customers, tracking their lifecycles and facilitating loyalty, nearly half of all respondents (49.5%) rated it a 4 out of 5 in terms of importance, with 5 being the highest. Combined with the 15% of respondents who rated the same question a 5, marketers are clearly looking for new ways to engage existing customers and garner loyalty.

The survey also revealed that capturing and integrating customer data is a key consideration for marketers, with more than 49% identifying it as a top priority. Savvy marketers are positioning themselves to gather and analyze as much data as possible about their existing customers – not only to serve them better but to give the organization as complete a profile as possible of their current clients to provide a model for pursuing the most profitable prospects. Providing a better picture of a profitable customer can help marketers target like companies of similar size and organizational needs.

Personalizing communications was a little further down the list, with 43% indicating personalization as a priority. Industry experts say there are opportunities for companies that move personalization further up on their agenda as customers are more likely to respond to targeted messages that address their specific pain points.

Marketers are becoming more sophisticated in measuring the effectiveness of their programs, and they realize the value of identifying successful marketing endeavors. More than one third (38%) indicated that measuring the response/business impact of programs is a top priority.

Identifying most loyal/valuable customers

Capturing and integrating customer data

Personalizing communications

Measuring response/business impact of programs

Segmenting customers/marketing programs

Leveraging web and social behavior

Managing multiple programs

Consistent communication across channels/partners

What are your top priorities in terms of customer marketing and customer lifecycle management (choose all that apply)?

68%

49%

43%

38%

38%

34%

31%

29%

Marketers say their top three priorities include identifying their most valuable customers, capturing and integrating customer data, and personalizing communications.

5The Next Generation of Customer Lifecycle Management

More than one third of all respondents rated segmenting customers and marketing programs as an initiative at the top of their agenda.

As further evidence that marketers are seeking more in-depth knowledge of their customer base to serve them more effectively and to identify profitable prospects. Thirty-eight percent also rated segmenting customers and marketing programs as an initiative at the top of their agendas.

Experts expect this trend to play an even greater role in the coming years as customers become more responsive to messages that address the needs and concerns of their specific industries. Segmenting this data can also help marketers get a better handle on their most valuable subsets of customers to avoid investing resources in reaching out to unprofitable customers or to those less likely to purchase.

More than one third (33.8%) of respondents are aiming for consistent communication across all channels, and this will likely become an even higher priority for more marketers will likely become an even higher priority for marketers as customers look for a clear and consistent message, whether they connect with a company through email, text, social media or on their web sites.

Leveraging web and social behavior is an emerging priority as well, cited by 31% of respondents. This is also likely to come to the forefront for even more marketers in the near future as B2B and B2C brands look for ways to monitor the social media activities of their customers and prospects.

6The Next Generation of Customer Lifecycle Management

Email remains the most popular way to reach customers, with 67% of respondents indicating it as their most successful communication channel.

B2B and B2C marketers recognize that a formal customer loyalty/rewards program is essential to a successful lifecycle management program. Of the respondents, 40% already have a program in place and 18% plan to launch a loyalty program in the next 12 months.

Email remains the tried-and-true method of building customer relationship and loyalty marketing, with 67% of respondents indicating it as their most successful method of communicating with customers.

While traditional marketing channels such as events and direct mail represented the other preferred channels, those categories proved to be dropping as priorities, in favor in digital investments. Web and search marketing showed a slight increase in priority, increasing from 41% of marketers prioritizing the channel in 2012 to 42% in the coming 12 to 24 months. Social media showed a bigger spike, climbing from 23% in 2012 to

36% over the next two years. Mobile also posted a big jump in expected investment, moving from 16% up to 29% in the future.

As further of evidence of the need to focus on multiple channels, when asked how much of a priority it is to understand and track cross-channel behavior of customers, 43% rated this as a high priority. Of all respondents, 32.7% rated it a 3, so it is steadily moving up the priority list. Only 8.4% rated it a 1, or a minimal priority.

The Lifecycle Marketing Landscape

Yes

No plans

No, but plan to launch one within the next 12 months

Other

Do you currently have a formal customer loyalty/rewards program in place?

40%38%

18%

4%

7The Next Generation of Customer Lifecycle Management

When seeking new customers, more than one quarter (29%) rated acquiring new customers by converting them through special offers a 4 out of 5. However, almost the same number rated this 5 (23%) and 3 (25%), so it is clear that marketers feel the pressure to provide special incentives and new programs to win new business.

More than half (55.1%) reported that their customer marketing and relationship management are conducted mostly in-house, while 38.3% used a mix of in-house and third-party resources, and 6.5% rely mostly on third parties such as agencies and partners.

Email

Event

Web site/SEO/SEM

Direct mail

Social Media

Online advertising

Coupons/FSI

Mobile

In-store promotions

Loyalty card programs

Telemarketing

Most Successful Methods And Channels

67%53%

36%

42%

22%

36%

12%

17%

10%

29%

8%

15%

53%

41%

39%

23%

18%

17%

16%

16%

14%

13% Expected

Traditional

8The Next Generation of Customer Lifecycle Management

Managing multiple, disparate systems was cited as the top obstacle to achieving customer marketing/management goals, followed by insufficient data.

The Roadblocks In The Way Of Lifecycle MarketingThere are a number of organizational and operational barriers to achieving marketing and management goals, but many marketing departments are finding their efforts hampered by inefficient systems and a lack of data.

More than half cited managing multiple, disparate systems as the biggest obstacle to achieving their goals. Experts say those pain points should ease as marketing automation becomes more mainstream and is more tightly integrated with enterprise platforms.

Not surprisingly, another major roadblock noted by 44% of respondents is insufficient data to support segmentation/targeted marketing initiatives. It is a Catch-22; segmentation was low on the priority list as marketers look to collect more data to make it a worthwhile endeavor.

More than one third (36%) said a lack of integration between channels was hampering their marketing initiatives.

Marketers are also looking for more data to measure the impact of marketing programs, with 36% citing manual reporting and insufficient intelligence as roadblocks to meeting their goals.

Other barriers included over-reliance on one-off communications (27%); inconsistent messaging between divisions/branches (23%); and an inability to determine or communicate through customers’ preferred channels (19%).

Managing multiple, disparate systems

Insuffient data to support segmentation/targeting initiatives

Manual reporting /insufficientintelligence of program impact

Lack of integration between channels (web,social,ect.)

Over-reliance on one off communications

Inability to determine/communicate with customers’ preferred channel

Inconsistent messaging between divisions/branches

What are the biggest obstacles to achieving your customer marketing/management goals (choose all that apply)?

52%

44%

36%

36%

27%

23%

19%

9The Next Generation of Customer Lifecycle Management

Marketers say they continue to struggle to identify their most loyal, valuable and profitable customers.

Respondents were asked to rate a number of challenges on a scale of 1 (not a challenge) to 5 (a huge challenge). Managing multiple customer marketing and customer relationship efforts was cited most often, rated a 5 by 22.4% or respondents and a 4 by 40.2% of respondents.

Managing multiple campaigns across multiple channels was rated a 4 by 36.4% of respondents, and 15% gave it a 5.

Marketers are also struggling to identify their most loyal, valuable and profitable consumers. More than one third (35.4%) rated this challenge a 4, and 19.6% put it at 5. When it comes to focusing on the most loyal and profitable 20% of their customer base while maintaining and cultivating relationships with the other 80%, this challenge was rated a 4 by 29% of respondents and a 5 by 19.6%.

More than one third (36.4%) reported that maintaining ongoing, connected communications with customers was a 4, while 15.5% rated it a 5.

One major hurdle is apparently the quality of the data and customer records. When asked to rank the current state of their current database, 35.4% gave their database a 3, while 36.5% gave it a 4. There is surely room for improvement, as a recent study by NetProspex found that only 72% of email addresses in marketing databases were deliverable.

Managing multiple customer efforts efficiently

Managing multiple campaigns across multiple channels

Measurement

Understanding who most valuable customers are

Capturing valuable customer data

Top Customer Marketing And Loyalty Management Challenges

Respondents chose more than one option.

62%

52%

56%

56%

60%

MOST VALUABLE CUSTOMER

10The Next Generation of Customer Lifecycle Management

Marketers plan to redesign their web sites, launch customer centricity programs and upgrade their technology in the next six to 12 months.

What’s AheadIn looking at the planned investments marketers are making to improve their customer lifecycle capabilities, web site redesign is a top initiative, with 19.6% planning a web redesign/refresh in the next six month and 23.4% planning to update their web sites in the next year.

Launching a major customer centricity program or campaign is in the plans for 16.3% within six months and 22.1% over the next 12 months

Marketers are certainly looking to upgrade their technology to meet their marketing goals, with 8.7%

planning an upgrade in the next six months and another 11.5% looking to roll out a new system in the next 12 months. Another 38.5% said they were preparing to upgrade their marketing systems but did not specify a time frame.

CRM implementation is on the agenda for 11.5% of respondents in the next six months and 17.3% reported that they will roll out a system in the next year.

AFTER

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BEFORE

11The Next Generation of Customer Lifecycle Management

By role:

•Manager

•Director

•VP

•CxO

•Other

The Trends In Automating The Customer Lifecycle Survey was conducted in December 2012 and was based on a sample of 109 executives, representing a variety of industries and company sizes.

In terms of vertical industries:

•30% were retail

•16% were tech/software

•14% were in business services

•12% were in manufacturing

•3% were media/Internet

About The Survey Sample

19%

18%23%

10%

30%

28%

32%20%

6%14%

The breakdown by revenue:

•$5M to $10M

•$10M to $50M

•$50M to $250M

•$250M to $1BM

•$1B+

12The Next Generation of Customer Lifecycle Management

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About Demand Gen ReportDemand Gen Report is a targeted e-media publication spotlighting the strategies and solutions that help companies better align their sales and marketing organizations, and ultimately, drive growth. A key component of the publication’s editorial coverage focuses on the sales and marketing automation tools that enable companies to better measure and manage their multi-channel demand generation efforts.

About EloquaEloqua is the category creator and leading provider of demand generation applications and best-practice expertise for business marketers around the world. Thousands of customers rely on the power of Eloqua’s products and services to execute, automate and measure programs that generate revenue. Eloqua is headquartered in Vienna, Virginia, with offices in Toronto, London, Singapore and throughout North America.

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