Price and Service are highest customer priorities according to survey

in General Business Marketing

There are interesting insights for businesses in the August 2009 edition of the twice-yearly CMO survey sponsored by the American Marketing Association (AMA) and Duke University Fuqua School of Business. The survey sample included 3,363 top marketers at Fortune 1000, Forbes Top 200, CMO Club Companies, and marketers who are AMA members or Duke University Alumni and Friends.

Asked to rank their customers’ top 3 priorities over the next 12 months; most (34.1%) of the survey respondents ranked Low Price as the #1 priority. 62% ranked low price in the top 3 priorities. 70.6% of respondents ranked Excellent Service in the top 3 priorities but only 15.3% ranked it as their #1 priority. The emphasis on Low Price as the #1 priority increased from 30% to 34.1% since the February survey. Innovation lost ground from 11% to 7% as the #1 priority in the past 6 months. Branding scored the lowest of all priorities.

Some good news are the expectations of increased customer purchase volume (48%), increased customer purchases of related products/services (44%) and increase of new customers entering the market (35%). All these numbers are appreciable higher than 6 months ago. Similarly expectations for the purchase volume and purchase of related products/services by channel partners show substantial improvement.

Marketing spending continues to shift from traditional advertising to Internet marketing with a 9.5% year-to-year increase for Internet marketing spending. New product introduction is second with a 9.3% increase in marketing spending. A curious anomaly is the expected 4.5% increase in marketing spending for brand building even though branding scored the lowest customer priority as mentioned earlier.

Some downbeat but unsurprising news is that companies in the survey consistently underperformed on all key marketing and financial metrics over the past 12 months. The goals for these same metrics are more optimistic for the next 12 months with the biggest increases expected in customer acquisition (5.6%) and profitability (5.3%).

Companies continue to focus more marketing resources on social media with an expected spending increase of 300% in the next 5 years. The top social media activities in descending sequence are Brand awareness and brand-building (81.1%), Acquiring new customers (55.8%), Introducing new products and services (51.9%), Retaining current customers (47.6%), Market research (46.1%), and Promotions such as contests or coupons (42.2%). The significant focus on brand building is incongruent with branding scoring lowest of all customer priorities.

How to use this information to benefit your business

  • These survey results are from marketers at larger companies. While there are good insights and relevance for all businesses, be circumspective for relating to your specific business circumstances.
  • Customers are price conscious in the current economic conditions as evidence by Low Price being the #1 customer priority. How important is low price in your market and how does your business meet customer expectations on price?
  • Excellent Service ranked highest in aggregate across all 3 priorities. Internet technologies and social media create new opportunities for providing great customer service. But there are risks – see the Putting the ‘Service’ Back In ‘Customer Service’ article for guidance on improving customer service.
  • Internet marketing continues to supplant traditional marketing. Continue to reevaluate your marketing programs take advantage of this trend and the power of Internet marketing for your business.
  • We’re seeing some optimism in this survey for the next 12 months – these expectations often become self-fulfilling prophecies. Consider how your marketing activities align with these expectations.
  • Use prudent judgment for spending on branding. See the article Focus on Positioning before Branding for thoughts on why branding should not be a high priority for most businesses.
  • Social media marketing continues to grow and produce tangible results for businesses. You should consider social media marketing as an integral part of your business marketing strategy. See the What is Social Media Marketing? article for more information.

Apple and P&G were the winners for the Marketing Excellence Award in the survey. No surprise here, Apple and P&G are perennially outstanding marketing companies.
All data for this article acquired from public domain sources.
Copyright © 2009 Ingistics LLC and Marketance™ www.marketance.com

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