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Why Precision Marketing is Still an Oxymoron

Across all industries and company size, growing revenues is a top priority for organizations. This holds true for all business models -- business to business (B2B), business to consumer (B2C), and not-for-profit. Moreover, top-line growth is not the only pressure faced, according to an Aberdeen Group market study.

Marketers also seek to do more with less. They are pressured to identify and invest in their most valuable or profitable customers while optimizing both budgets and resources applied. In short, marketers must find ways to communicate, interact and provide service to customers based on value metrics.

Ideally, highly profitable customers would receive more attention, service and resources than less profitable ones. Customer retention and acquisition rates among preferred segments or profiles would increase, as well as market share among most valuable customers.

Aberdeen Group surveyed and interviewed 200 companies to gain an understanding of how best-in-class organizations select, deploy and measure precision marketing techniques. Their research demonstrates that effective precision marketing techniques leads to improved customer retention rates, higher revenues from up-sell and cross-sell campaigns, and enhanced levels of customer satisfaction.

Enterprises that deploy precision marketing enjoy a greater share of each customer's wallet. More than fifty percent of top performers have customers who purchase multiple products or services from them annually -- twice the rate of other benchmarked groups.

Overall, top performers that hold higher competencies in advanced precision marketing capabilities also enjoy a higher return on investment in key performance metrics. Case in point, 51 percent of these top performers -- in contrast to only 10 percent of other benchmarked groups -- attained customer satisfaction levels in excess of 70 percent.

While enabling technologies and service providers facilitate the planning and execution of both inbound and outbound marketing campaigns, enterprises are more challenged by lack of internal expertise in precision marketing techniques. The majority of survey respondents revealed they lack the ability to establish and measure meaningful performance metrics.

Ironically, organizations struggle to secure the budget and resources necessary to improve precision marketing techniques, but lack the ability to build a business case and gain buy-in through the establishment of measurement of key performance indicators (KPI), metrics or goals.

All respondents confirmed they are addressing challenges from a technology, process, performance and organizational perspective. They realize that no quick-fix solution exists, but that a more holistic, process-driven approach to customer interactions, comprised of closed-loop marketing techniques is necessary to drive continuous performance improvements in precision marketing.

In the meantime, bearing in mind the "experienced talent" void, the notion of precision marketing remains an oxymoron within many organizations. Therefore, Aberdeen suggests to pro-actively hire marketers, business analysts and statisticians with extensive precision marketing expertise and create an in-house center of customer excellence.

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