Enhanced intelligence maximizes customer acquisition and retention.
Posted Oct 1, 2006
Most companies must grow or die. Putting aside growth by mergers and acquisitions, savvy companies grow by discovering how to best meet customer needs that drive both acquisition and retention while favorably differentiating their company and its offerings from competitors.
Customers are the key to company growth because they generate revenue. C-level executives want to see as many customers as possible successfully acquired and retained.
Therefore, it's not uncommon to see competitive intelligence (CI) and market research groups working on various company growth initiatives mandated by these senior executives. This may include exploring customer interest in a potential high-growth new product on the research side or analyzing the growth potential of forthcoming competitor products on the CI side.
Companies that develop superior marketing and customer relationship strategies are the ones that understand the importance and encourage the intersection of their market research and CI functions. This combined effort produces optimized market intelligence that leads to best-informed executive decision-making regarding company growth. Unfortunately, many companies fail to combine their efforts in this way and are missing out on valuable opportunities to grow their businesses, improve ROI, and best connect with customers.
A Case in Point
The key to success is for CI and market research teams to design and launch super surveys that gather both customer needs and purchase decision drivers related to a potential high-growth product/service. They should also collaborate on how their company is perceived versus its competitors along all marketing Ps (product; promotion/positioning/brand; price; and place/distribution, which includes customer service; and product/service support).
For example, a Fortune 500 hardware company that launched a super survey learned that customers' top three purchase decision drivers for a forthcoming high-growth product line were product, brand, and customer service/product support, respectively. The company knew it was superior to competitors regarding product and customer service/product support.
However, the company was surprised to discover that customers wanted to purchase these products from a company that held an as-yet-unclaimed brand position. Customers also identified two services they wanted "wrapped around" the hardware product to mitigate the risks of purchasing perceived "bleeding edge" technology.
This company revised its marketing strategy to best differentiate itself from competitors and meet customer needs in a manner that maximized customer acquisition, purchases, and retention. Now, customers in five distinct segments in North America are expected to spend over $13 billion from 2005 to 2009 on services supported by the hardware products of the company and its competitors. The company is also either the market leader or one of the top leaders in supplying each of these five segments.
This example shows that by joining forces, market research and CI departments can contribute vital questions to the survey based on knowledge held by both or either group to best drive the company's growth initiatives.
Six Steps for Success
How can your company's CI and market research groups cooperate to reap the benefits of a super survey? Here are several key steps.
CI and market research should choose the high-growth product or service and the known or hypothesized customer segments to study based on their own knowledge and input from top marketing and other company-growth decision-makers.
Jointly examine relevant evidence and decide which two competitors are your company's greatest arch rivals regarding this product or service and its target customers.
Design the marketing P-related questions in a workshop of CI, market research, and product development/product marketing experts. Once the marketing P questions have been set, market research should design and launch the survey. Market research should add any customer need- or segmentation-focused questions as necessary.
When the results come in, market research should analyze the survey results to identify where your company has competitive marketing advantages or disadvantages is areas that are highly important to customers. Typically, this information is passed to strategic marketing, product management, or another group that recommends how your company should adjust its marketing strategy to maximize customer acquisition, purchases, and retention.
The CI group should combine the survey information with other competitive information gathered outside of the survey and use these data as inputs to CI analytic models. The CI group then can transform this output into an internal intelligence product that will inform executive decision-makers about emerging opportunities and threats in this product category, the implications for your company, and strategic recommendations regarding actions your company should take.
Although market research and CI groups are increasingly merging, they have at times existed as contentious siblings. The companies that have discovered how to unleash the combined capabilities of these two groups are the ones developing marketing and customer relationship strategies that maximize sales and customer acquisition and retention.
About the Author
Allen Long is managing director at Outward Insights, a Boston competitive intelligence and strategy consulting firm. Please visit www.outwardinsights.com