Despite a depressed global economy, a surprising 76 percent of senior marketers believe they are not realizing the full revenue potential of their current customers. The Chief Marketing Officer (CMO) Council in the US released last December an insightful “Routes to Revenue” study. The core conclusion? Better Customer Data Integration and Analytics is seen as Critical to Revenue-Generating Strategies and Marketing Efficiencies.

Making communications more personal and relevant, as well as more targeted and timely the key to profits

The international audit during 2008 of some 650 senior marketers revealed that making communications more personal and relevant, as well as more targeted and timely, was among the top strategies for realizing greater revenue and profitability from existing customers. Other leading strategies included addressing under-penetrated markets or new customer segments, as well as finding new ways to up-sell and cross-sell existing accounts.

The CMO study highlighted three key obstacles and deficiencies to overcome. This included:

• Lack of real-time data that captures across all customer touchpoints.
• Information not only being selectively gathered, but often inaccurate.
• Data restricted in its availability and use across the organization.

The core need for change  has been simmering for a while now. It started with that groundbreaking research by Romano and Broudy way back in 1999 who clearly established the benefits of  utilising client profiling and transactional data within marketing campaigns.

“It is inexplicable that the vast majority of marketers today are still struggling to source and extract meaningful insights from customer data at a behavioral, transactional and account value level,” noted CMO Council executive director Donovan Neale-May.

Hospitality and Retail have the biggest growth opportunities

An earlier Retail Trends Report in 2005 came to surprisingly similar conclusions to the CMO one. It concluded that retailers that take a customer-driven approach to marketing will be able to withstand the competition for dwindling discretionary income, and still have a productive and profitable. The key to success for small retailers is to identify their best customers, find potential niches to cater to, get to know what motivates customers and then interact as individually as possible.

Retail Trends Report suggests that retailers creating personal experiences and communications are those most likely to come out ahead. Personalising the selling experience and marketing messages will help to level the playing field between small and larger retailers.

According to Gary Wright, of Wright Marketing who specialise in retail strategies, "Technology today puts personalised communications within the reach of every retailer, regardless of size. With new database and digital press technology, small retailers can affordably engage in one-on-one communications which has been proven to significantly increase a customer’s brand loyalty and lifetime value."

when you communicate with a known customer, you are 5 times more likely to generate a response and a sale

Wright encourages retailers to explore database programmes and digital production opportunities that will merge customer data with promotional materials in order to produce personalised and highly relevant materials at a fraction of traditional printing costs. His report indicates that when you communicate with a known customer, you are 5 times more likely to generate a response and a sale. When you add customer-specific information from a database to that correspondence, the potential increase jumps to 13 times.

Loyalty marketing guru Rafi Albo knows all this well. He’s shown us in his own retail sector numerous examples that gained a 15-35% response / voucher redemption rate. Winston Marsh also provided some handy tips for small retailers where he touched upon the benefits of using the internet and email in innovative ways. Now, in 2009, we can add in mobile TXT messaging and QR barcodes.

The opportunities here for all retailers, restaurants and the hospitality sectors are immense, but like any marketing strategy, expert planning and execution is the key to success.  Call us on 027 244 4884 to discuss how we can together devise a retail marketing plan to suit your industry or market sector.

If you want more information on the Routes to Revenue study go to  the CMO web site at http://www.cmocouncil.org/index.asp.

Kevin Trye