Are marketing billions being wasted?

Chief marketing officers at telecom service providers are raising some red flags where their customer retention efforts are concerned. In a survey of telco, cable, wireless and broadband marketing officers by the CMO Council and the Customer Experience Board, the CMOs admitted their companies are struggling to improve customer retention processes and systems even as they face unprecedented competition and new challenges for customer loyalty from social networks.

The study results, contained in a report “Service Invention to Increase Retention,”  found service providers crippled by internal bureaucracies and IT silos that prevent company-wide efforts to focus on and improve the customer experience.

“Marketing doesn’t own the customer experience in most cases,” said Donovan Neale-May, executive director of the CMO Council. “Very few marketers are customer custodians. They are out there spending literally billions of dollars on marketing campaigns that promise a certain caliber of service, ease of use, service activation, new plans, and new programs. Yet the actual customer experience has all kinds of deficiencies, and the marketers recognized this.”

The global audit of more than 140 chief marketers found a basic disconnect between marketing priorities and IT spending, Neale-May said, such that marketing money spent to acquire new customers, upgrade their service or sell new programs wasn’t backed up by systems that can acquire and use relevant data about a customer to enable a customer service rep (CSR) to make the most of every contact with a customer to upsell, assuage and even retain that customer. “They are basically wasting a lot of money,” Neale-May said.

Customer data remains scattered, in different organizations and IT silos, so that it often can’t be used in the best way possible to benefit customers, Neale-May said. And with the rise of social networking and user-generated content, marketers believe they need more than ever to “re-think their operational structures, product portfolios, customer handling systems, and strategic partnerships and investments,” the study concluded.

“What marketers are saying is that their organizations are not aligned around the customer – that is where you have to start,” Neale-May said. “Today, you have to implement and deploy customer listening and feedback systems that are multichannel. When I have a complaint, whether I put it in through the Web site, via voice mail or email, the problem needs to be solved and the issue  brought to the company’s attention, then the company has to address those problems.”