Commentary: Best-in-Class Companies Invest in Customer-Focused Processes, Technologies

Businesses no longer choose manufacturers or plants based solely on lowest pricing, configuration capabilities, location, just-in-time or on-time delivery. AberdeenGroup research suggests that higher customer expectations, shrinking budgets, and increased competition from numerous vendors, all clamoring for a piece of the supply chain production pie, are pressuring marketers to increase their investment in customer-focused processes and technologies. In short, marketers in manufacturers will need to work faster and more efficiently to capture a greater share of each customer's wallet -- or to be the sole producer of their products. Marketers in manufacturing industries understand the need to plan effectively. Fully 77% of recent survey respondents* reported that they have a documented marketing strategy process that is regularly reviewed and adjusted to provide a sustainable competitive advantage. This disciplined approach pays off. Leaders reported an average customer retention rate of 31%, as well as a greater than 15% increase in annual revenues. Additionally, many manufacturers have invested in various enabling technologies in the last decade. These platforms, applications, and tools include customer relationship management (CRM), marketing resource management, sales force automation, market analytics, and call center solutions -- all implemented with a goal of automating processes, enhancing productivity, and increasing revenues. However, these changes have been largely incremental, with approximately 52% utilizing one or more of these enabling technologies. Among senior marketers who reported having these enabling technology tools at their disposal, only 10% have the processes and infrastructure in place to automate and integrate their outbound campaign planning across multiple marketing, trade promotion, advertising, or communications channels. In fact, 37% of marketers that do integrate their planning processes do so manually. Aberdeen research suggests that senior marketers in manufacturing still spend much of their planning time e-mailing or sharing printouts of "spreadmarts" in multiple meetings that end with more data being reentered or imported into multiple databases. Informational silos -- whether by product line, brand or by function, such as business development/sales, operations, promotion, advertising or corporate marketing -- reduce productivity and are an impediment to the flow of customer information across the enterprise. Best-in-Class Leverage Analytics to Understand Customers Marketers continue to make advances in tracking and understanding customer behaviors. Best-in-class marketing-ready manufacturing enterprises have developed competencies that enable them to drill down into both transactional and interactional customer information to predict, model, and report on their markets, customers, products, campaign effectiveness, partner and distribution channels. Marketing operations, analysts, and/or IT support run reports and perform predictive analytics and/or "what if" planning scenarios to forecast results from various campaigns that are planned well in advance of actual execution. Leaders report using point of sale (POS) or distribution channel data and customer demographics in planning outbound campaigns at rates that are significantly higher than those of their counterparts. Not surprisingly, these best-in-class organizations also reported being better able to accurately predict campaign profit or loss within +/-3% as well as tracking and aggregating marketing campaign responses through multiple channels to assess their return on marketing investments (ROMI) by product, POS, or campaign. Key Business Findings The benefit of integrating customer information with analytical tools that model and predict customer behaviors is that organizations are better able to define, segment, profile, and interact with their most valuable customers through their preferred channels of interaction. Using advanced rules-based marketing tools, leaders are more likely to optimize their marketing investments by targeting their most profitable customers with personalized offers designed to trigger a purchase based upon life-cycle stage, demographics, or past behaviors. Aberdeen research shows best-in-class manufacturing organizations and their distribution partners are better able to understand, predict, and develop high-value relationships with both B-to-B as well as B-to-C customers through their preferred channels of interaction and are rewarded with higher rates of annual profitability per customer. Best-in-class organizations utilize enabling technologies more fully than do their "industry norm" and "laggard" counterparts. While the rate of CRM usage across the board had no statistical significance in this data sampling, best-in-class organizations in that best-in-class manufacturing organizations use call center and marketing resource management tools twice as often as either industry norms or laggards. . Moreover, the ability to automate and integrate back- and front-office customer data was reported at double the rate by companies categorized as "leaders." Not surprisingly, companies that leverage these technologies are better able to perform the following:

• Track customer behavior;
  
• Perform customer value modeling; and
  
• Utilize real-time decision-support tools that are integrated with marketing and customer data.

• Differentiate by becoming demand-driven and responsive to customers by proactively offering product customization, service upgrades, extended warranties, discounted shipping on rush delivery rates or enhanced customer experience for competitive advantage.
  
• Define and identify your most valuable customer by using customer profitability modeling and predictive analytics to determine the customer value metric that best suits your business model.
  
• Invest in technologies that empower your organization to respond to customer behavior patterns through any media channel with personalized communications, trade promotions and offers. (Click here to access Managing Automation's CRM product listings.)
  
• Track and aggregate customer touch-points to purchase or sales channel (POS) to better understand what type of relationship customers want with your organization.