Companies are reconsidering how to identify their most valuable customers, against a backdrop of the proliferation of new customer communication channels, including social networks, microblogs and wikis, that has led to a deluge of information. Customers are sharing not only their opinions about the brands with which they do business, but their ideas for new products and marketing strategies as well, according to a new report.
Beyond improving how they respond to customers, companies that are able to interpret and act upon these insights can also enhance how they develop new products and operate their businesses.
As a result, this new wealth of information is forcing a majority of companies to reconsider how they determine the value of their customers. This is the main finding of a new report, Redefining customer value: corporate strategies for the social web, produced by the Economist Intelligence Unit and sponsored by software firm, SAS. The report, the first of a two-part series, includes a survey of nearly 400 executives from around the world, as well as in-depth interviews with business executives and experts.
The EIU says while this effort is still nascent - - very few companies have figured out just how to rewrite the definition of a valuable customer - - a majority of respondents (75%) say that customers are now a critical source of innovative ideas. And more than half (55%) say that customer service is now an enterprise-wide responsibility, indicating a recognition among firms that customer insights need to be harnessed more effectively and by more than just the marketing function.
“Executives realise that customers need to be approached in new ways, to give them a greater opportunity to share insights and ideas about new products and services,” says Debra D’Agostino, managing editor of business research at the Economist Intelligence Unit and editor of the report. “However, companies still struggle with how to measure the actual value of that effort, or how to create processes that allow for the easy transfer of customer insight across the enterprise. Firms that can find ways to do this will have an edge over their rivals.”
Other findings from the report include:
The quantitative findings presented in the report are based on an online survey conducted by the Economist Intelligence Unit in October 2010. A total of 391 senior executives from a broad range of industries participated in the survey, of which 45% are CEO or above. Around 30% of executives are based in Europe, 25% in the US and Canada, 26% from the Asia-Pacific region, and the remainder from the Middle East and Africa. Participants also represent a wide cross-section of company sizes, with 25% posting annual revenue of over US$5bn per year.
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