Shotgun marriage: customer service and marketing

Acxiom and Loyalty 360 released their joint research project, “Making Every Interaction Count: How Customer Intelligence Drives Customer Loyalty,” at Loyalty Expo 2012. The research focuses on how most brands “are not leveraging (customer data) as a strategic asset that helps create and maintain long-lasting relationships with their high-value customers.”

We know, from conversations with agency holding companies, that demand for data and analytics has driven growth — so brands are certainly investing in it. But the key distinction is that these brands are not using that data for customer retention or loyalty.

I haven't acquired the full study yet — just read the press release — but my initial impression is that marketing is more about customer acquisition; customer service tends to focus more on customer retention and loyalty. For better or for worse (usually for worse) these are typically two separate departments that don't do a particularly great job talking to each other or swapping data back and forth. Maybe that might change as social media looks to become an increasingly company-wide endeavor.

Traditionally however, the analytics that determine the successful addressing of cross-channel customer query (say it originates in an online form and escalates to a phone conversation with a customer service representative) aren't always readily available to the marketing department. Conversely, a marketing department might use analytics to determine the efficacy of an online promotion won't be available to the customer service department. Fundamentally, the issue is siloed data.

Ultimately, these key stats, which I pulled directly from the press release, aren't surprising at all:

• The vast majority (84.5%) of respondents uses customer retention marketing strategies, yet barely half believe their strategies are working. 5.4% admit they do not evaluate their customer retention efforts at all.
• Less than half of respondents know who their best, most loyal customers are, and how best to reach them.
• 70% of respondents have less than 20% of their employees dedicated to customer retention.
• 60% of respondents dedicate less than 20% of their marketing budget to customer retention.
• 40.2% of companies access data individually through different lines of business, and slightly fewer (34.8%) report that their data is centrally located with universal access.
• More than half believe that attitude and behavior analytic models help with customer engagement; the most important outcomes of data insight are understanding customer's attitudes and behavior and improving the customer experience.

I think the key to solving this is to merge customer service and marketing departments. This is easier said than done, of course. Each department has stakeholders more interested in the success of their respective areas than in sharing data. It will also require enterprises build a set of business processes that encompass the interests of both departments. It will require time and money and significant reallocation of resources, without any guarantee of ROI.