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The 8 Traits of Customer-Relevant Companies
Ovum research finds very few customer-adaptive enterprises exist today.
For the rest of the January 2014 issue of CRM magazine please click here
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Research from Ovum has found that 90 percent of organizations are at risk of becoming irrelevant to their customers unless they can learn to adapt their practices much faster and in ways customers value. They're also missing key opportunities for exemplary customer satisfaction, greater customer loyalty, and faster growth.

While CRM systems are prevalent, businesses are being held back by slow decision cycles, a lack of workforce engagement, operational and channel silos, and a serendipitous attitude toward innovation, the firm found.

In its report "Customer-Adaptive Enterprise Maturity Levels," Ovum also notes that rising customer expectations and customer power brought about by social and mobile technologies have made it more challenging than ever for companies to remain relevant to their customers. This drives the need for a deeper and broader company-wide perspective of the customer, not just the customer-facing parts of the company. This hasn't come easy for most companies.

Ovum evaluated companies across eight key attributes it identifies as central to making a company a customer-adaptive enterprise. Those attributes are leadership, workforce engagement, collaboration, sensing capabilities, customer experience, innovation, process integration, and enterprise architecture. Any organization that masters this level of purposeful orchestration "can claim to be a customer-adaptive enterprise," Ovum principal analyst Jeremy Cox maintains.

The problem, however, is that few can make this claim. In fact, in Ovum's evaluations, the average score was only 52 percent, and no single company scored higher than 80 percent across all attributes. Among the companies that have displayed customer-adaptive capabilities are IBM, Virgin Atlantic, First Direct, Handelsbanken, Apple, and GE, but they are among the minority.

This, Cox argues, indicates that companies "are insufficiently connected to their customers and do not have the insight or discipline to enable them to sense and respond...in ways that will ensure their relevance to customers."

Still, given the advanced nature of customer-adaptive companies, Cox isn't surprised by the results. "No sector is impervious to the rapid march of technology developments or the rise of the increasingly choosy and powerful consumer, whose often vociferous voice can make or break reputations in minutes," Cox explains.

Carter Lusher, chief analyst for enterprise applications ecosystems at Ovum, points out that "technology is an enabler, but not at the core of the customer-adaptive enterprise approach." Achieving customer adaptation "takes a true customer-first approach," he says.

Among his recommendations, Cox says the voice of the customer must be embedded so the customer experience can be monitored and fine-tuned over time. Additionally, innovation is crucial to success and needs to be supported and managed.

"There is no shortage of technology out there to support those with the ambition to become customer-adaptive, but the fundamental blockage is a lack of visionary leadership, insight, and the ability to translate that into a fully engaged and connected enterprise," Cox concluded in the report. "It is time that investors examine the capabilities of firms to truly engage and build trust with their customers, then perhaps we’d see more evidence of leaders orchestrating and enabling rather than commanding and controlling and chasing short-term results."

The study’s findings are supported by a Forrester Research report entitled "The State of Customer Lifecycle Marketing, 2013," which found that only 13 percent of brands are leaders when it comes to customer obsession, based on strategy, organization, technology, management, and data and analytics.

In fact, more than 40 percent of brands can be classified as laggards, showing little effort to put customers first and failing to leverage structured and unstructured data sources in one centralized database to inform marketing decisions, Forrester found.

"This group has significant ground to make up to make the necessary adjustments to succeed in the age of the customer; as they currently stand, companies that deliver on customers’ needs are ripe to disrupt them," noted Forrester analyst Corinne Munchbach in the report.


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