In today’s fast-paced global economy, examples of how empowered customers and citizens use social technology to influence everything from brands to governments are all around us. The Arab Spring clearly shows the ability of technology to empower people. In this new digital age, marketing teams must react at the speed of the market: Product development life cycles that used to last many years are compressed into months or weeks; customer service expectations have moved from same-day response to instant response; public relations snafus must be handled in minutes rather than days; marketing campaigns are adjusted in real time based on instant feedback from social media. In this new era, mastering customer data becomes the key to success and, in my opinion, represents the biggest opportunity for IT to impact business results since the dawn of the Internet.
As I suggested in my post "Retail 2020," we are rapidly moving toward an era where optimizing the customer value chain (CVC) optimization has a greater impact on operating results than optimizing the supply chain. The only way to achieve this is through an obsessive focus on customer data -- not just demographics, but knowledge of the individual -- so as to predict what each customer will want in the future and to tailor product and service offerings in real time. Companies that get this right will earn an increasing share of each individual consumer's disposable income over their lifetime. These companies will come to dominate the supply chain by virtue of their ability to source what they need from anywhere in the world while consistently meeting the expectations of loyal customers. Companies that own and use deep customer insight to increase market share will replace supply-chain-dominant companies like P&G as the prevailing force in the new customer value chain.
The big question for CIOs and CMOs is what to do about managing the customer data flow. For example, given the potential wealth of customer insight to be gleaned from customer loyalty programs, should companies continue to outsource these services to companies like LMG, or should these programs form the basis of a new approach to managing the customer data flow?
Over the past few months, my colleague Luca Paderni and I have been researching the relationship between IT and marketing as one of the critical success factors in managing the customer data flow and becoming a CVC-dominant company. Among the early findings uncovered from our research are a number of best practices for CIOs and CMOs to help establish an effective IT/marketing collaboration. For example, because of the need to react quickly to market changes, successful CIOs focus on the quick delivery of marketing projects, most often using Agile as a means to drive both collaboration and speed. But there are challenges too, often arising from misperceptions IT has of marketing and marketing has of IT. For example, while marketing often sees IT as unresponsive, IT too often sees marketing as flighty.
Forrester clients can read our initial findings in two reports released today, "Mastering Customer Data -- A CIO Imperative" and "Marketing And IT Must Align For Business Success," and we will be exploring more on this topic at our upcoming CIO-CMO Forum in Boston this September.
What do you think? Is this shift as big an opportunity for IT as the Internet was? Will IT get ahead of this, or like many IT groups at the dawn of the Internet in the '90s, will they watch from the sidelines, too bogged down in managing existing "projects" to see the wood for the trees? Or worse, is the video below representative of how marketing sees IT?
by Nigel Fenwick