Report: Marketers Place Priority on Nurturing Existing Customers

The days of marketers mulling lofty concepts such as Six Sigma, game theory and long-tail effects are over. According to a survey of senior marketing executives, nuts-and-bolts issues such as customer satisfaction and retention, return on investment and segmentation top their list of concerns.

“Forget the long tail. [In today’s economy] you’re going after the 20% that generates the 80%. Long tail is for when you have everything and can go after a few more responses,” says Tom H.C. Anderson, managing partner at market research consultancy Anderson Analytics.

The firm’s 2009 Marketing Trends Report shows that marketers’ priorities reflect the need to nurture existing customers during a recession. Satisfaction and retention are still first and second, as in last year’s study. If anything, they’ve become more important: In the current survey, satisfaction is up by four percentage points and retention by 11.

Return on marketing investment (up 12 percentage points) moves from sixth place to third, reflecting the increasing importance of accountable advertising. And in a sign of the times, concern about credit availability shows the greatest gain to 23rd place, with 35% of respondents citing it. Last year, at 9%, it didn’t crack the top 50.

Lead generation, even given today’s protect-the-customer mentality, isn’t getting short shrift. Forty-three percent mention it — up from 33% last year — good for a jump from 19th place to 10th.

Marketers are accomplishing all this with fewer resources. Slightly more than half say their budgets are shrinking, compared with 11% who report increases. And nearly one out of five are actively reducing staff, with another 25% cutting head count passively through attrition.

“Companies that cut advertising, marketing research and other forms of marketing do worse [following a] downturn,” Anderson says. “It will come down to the firms’ senior management. Are they going to listen to the bean counters or the marketing people? This could be an opportunity for [smart marketers] to get rid of [their] competition.”

Other key concerns include housing markets (which 30% cite, up from 15% last year), alternative energy and trade deficits.

Among issues diminishing in importance are global warming, falling seven percentage points to 23% — the biggest single drop of any item listed. Time shifting, such as using TiVo to save precious minutes while watching taped television shows, went from 18% to 13% and media fragmentation from 40% to 36%.

Marketers apparently have had their fill of the latest industry buzzwords. At 19%, ‘Web 2.0’ stands far above any other as the term respondents are most tired of hearing. ‘Social networking’ and ‘social media’ lag it, at 12% and 11% respectively, followed by ‘blogging’ (8%) and ‘viral marketing’ (6%).

Which is not to say these concepts and strategies aren’t important. “On the one hand these words have been used very frequently recently, and sometimes incorrectly,” Anderson says. “Most senior marketers understand that Web 2.0 is extremely important. But there’s also frustration in that marketing professionals haven’t been able to leverage it better than they have.”

‘ROI’ makes an appearance on the overdone list at 5%, in line with ‘branding’ and ‘green’ and just trailing ‘synergy.’ The takeaway? Marketers know they have to consider these things. They’re just tired of hearing about them.

At 15%, the percentage of executives who base any of their marketing functions overseas is comparable with last year’s 19%. But marketers as a whole tend to view offshoring with suspicion. Fifty-eight percent believe these activities are “not as profitable as others think, and [are] fraught with risk,” according to anonymous comments in response to the poll, vs. 49% last year.

“A lot of things are playing a role,” Anderson says. “During good economic times there was a rush to [move operations] offshore. Unfortunately, people have not been so happy with things like overseas call centers. Price pressure is growing; in India there’s been a lot of turnover. Costs are going up, and now we have a situation where thousands of layoffs happen every Monday. The American worker is becoming cheaper, is of better quality, and nationalism is coming back a bit.”

The findings are based on 643 responses to an e-mail survey Anderson sent out in mid-November.

Marketers’ Top 10 Concerns