PALO ALTO (April 14, 2008) — Only 50 percent of global marketers report having a strategy for further penetrating or monetizing key account relationships, reports the Chief Marketing Officer (CMO) Council in a new research study, "Business Gain From How You Retain." In addition, a surprising 45 percent rate the effectiveness of customer relationship management (CRM) systems as deficient or needing more work, with only 15 percent of companies rating themselves extremely good or effective at integrating disparate customer data sources and repositories.

Conducted in late 2007 and early 2008, the CMO Council's Business Gain from How You Retain study undertook a wide-ranging evaluation of where and how marketers are "operationalizing" customer intelligence and insight to reduce customer churn, increase lifetime value, improve the customer experience, and increase the effectiveness and targeting of marketing spend.

Funded by Computer Sciences Corporation (NYSE: CSC), IBM Software and D&B, the audit of more than 450 marketers located across the globe found a significant lack of customer knowledge and substantial obstacles and roadblocks to integrating disparate customer data repositories across the enterprise. Just six percent of marketers say they have excellent knowledge of the customer when it comes to demographic, behavioral, psychographic and transactional data, while over 50 percent report they have fair, little, or no knowledge of the customer.

More importantly, marketers are struggling to gain a true and timely view of the customer due to inadequate or incompatible IT systems and databases, siloed data in functional areas, and a limited strategic focus or management mandate on Customer Data Integration (CDI). Compounding the issue is a lack of formalized data-sharing policies and practices in the organization, combined with internal political or cultural barriers and IT obstacles and objections to data integration.

"We are seeing a fundamental need for marketers to be more effective at tapping the valuable vein of customer data that runs deep inside all organizations," notes Donovan Neale-May, executive director of the CMO Council. "Investing in integrated systems that harvest customer insight is critical to driving both marketing and business performance," he adds.

"The study illustrates a disturbing fact: many global companies are doing an inadequate job of integrating and applying customer data to reduce customer defections and increase loyalty," says Alexander J. Black, a senior partner in the Strategic Services group within CSC's Global Business Solutions organization. "Unfortunately, this results in lost opportunities and revenues from up-selling and cross-selling new products – as well as higher costs incurred in replacing lost customers. Most importantly, the inability to leverage data to reduce customer turnover hinders a company's long-term competitiveness and profitability. This study pinpoints the root causes of why companies are doing a poor job of integrating and applying data, and provides them with valuable lessons on the fundamental issues and how they can best be addressed."

Other key findings from the CMO Council’s online engagement program revealed that:

• Only 15 percent of marketers say their companies are doing an extremely good or effective job of integrating disparate customer data sources and repositories; 55 percent note there is room for improvement or a deficiency in this area.


• More than 31 percent of companies surveyed had customer churn rates of more than 10 percent and 32 percent reported turnover of five to 10 percent. In comparison, more than 62 percent said they desired or expected a churn level of less than five percent


• Respondents believe customer churn significantly impacts business performance through revenue loss (59.9 percent), reduced profitability (39.6 percent) and greater marketing and re-acquisition costs (36.3 percent)


• While churn is a big issue, nearly 67 percent of those surveyed say they have no system for re-activating dormant or lost customers, while just over half of respondents have a strategy for further penetrating or monetizing key account relationships.


• While more than 35 percent of respondents report that the CMO or marketing department (38.9 percent) has primary responsibility for the customer analytics function, they are not leveraging its value. Over 31 percent of those surveyed do no data mining at all and 63 percent are only doing moderate levels of data mining for intelligence and insight.


• The top six strategic applications of customer information by marketers include:
  
  
  
  • Up-selling and cross-selling
  
  
  • Segmenting and targeting
  
  
  • Driving retention, loyalty and promotional programs
  
  
  • IIdentifying new opportunities and unmet needs
  
  
  • Improving customer service
  
  
  • Shaping personalized and customized communications
  
  
  
  


• Key initiatives to increase customer retention include improving customer communications (65.2 percent); addressing complaints, problems and pain points (51.8 percent); and enhancing the customer experience (54.8 percent). Unfortunately, fewer marketers noted their companies’ willingness to modify business practices and policies to accommodate customer needs.

About the CMO Council
The CMO Council is dedicated to high-level knowledge exchange, thought leadership and personal relationship building among senior marketing and brand decision-makers across a wide-range of global industries. More than 3,000 top marketing executives from 52 countries are represented on the CMO Council worldwide. These individuals control well over $70 billion in annual marketing expenditures. Visit the CMO Council website at www.cmocouncil.org to find out about programs and events produced by this Peer-Powered Network.

About CSC
Computer Sciences Corporation is a leading global information technology (IT) services company. CSC's mission is to provide customers in industry and government with solutions crafted to meet their specific challenges and enable them to profit from the advanced use of technology. With approximately 91,000 employees, CSC provides innovative solutions for customers around the world by applying leading technologies and CSC's own advanced capabilities. These include systems design and integration; IT and business process outsourcing; applications software development; Web and application hosting; and management consulting. CSC reported revenue of $16.1 billion for the 12 months ended Dec. 28, 2007. For more information, visit the company's Web site at www.csc.com.

About IBM
IBM is the world's top provider of computer products and services. Among the leaders in almost every market in which it competes, the company makes mainframes and servers, storage systems and peripherals. Its service arm is the largest in the world and accounts for more than half of its revenue. IBM is also one of the largest providers of both software (ranking #2, behind Microsoft) and semiconductors. The company continues to use acquisitions to augment its software and service businesses, while streamlining its hardware operations with divestitures and organizational reengineering. www.ibm.com

About D&B
D&B is the world's leading source of commercial information and insight on businesses, enabling companies to Decide with Confidence© for over 165 years. D&B's global commercial database contains more than 115 million business records. The database is enhanced by D&B's proprietary DUNSRight© Quality Process, which provides customers with quality business information. This quality information is the foundation of D&B global solutions that customers rely on to make critical business decisions. www.dnb.com/us

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