In today's highly competitive world
of compressed margins and slow economic growth, companies are looking for new
ways to boost revenue. One key way is to engage and learn about customers via digital
means rather than strictly through traditional avenues such as direct mail and
print advertising.
According to PwC US's Private
Company Trendsetter Barometer, most private companies (70%) are now doing some
form of customer outreach through digital avenues, including via email and
company websites. Within the group that engage/research customers digitally,
67% are leveraging social media and mobile devices to that end.
Fast-growth private businesses in
particular are embracing digital tools in their customer outreach. Among
Trendsetter companies, those that use digital means to engage and learn about
customers forecast 11.3% revenue growth over the next year, compared with 6.3%
revenue growth projected by private companies that are not using digital tools
for customer-engagement purposes.
"Speed and interaction are
essential for businesses looking to remain ahead of their competitors,"
says Ken Esch, a partner in PwC's Private Company Services practice. "And
so most private companies see digital tools as a pathway to faster growth. Not
only does digital technology enable companies to reach many customers quickly,
it also allows them to learn considerably more about those customers than they
could before."
Notably, private companies using
digital means of customer engagement and research to at least a moderate degree
also tend to have higher annual revenue ($244 million) than those using digital
means to a smaller degree ($191 million).
"Digital means of customer
engagement level the playing field, helping private companies catch up to their
larger public counterparts," says Esch. "By leveraging social media,
for instance, private companies can engage and track current and potential
customers on a scale that, in the past, would have been cost-prohibitive. It's
important, however, that companies have a disciplined social media plan that
matches their business objectives. A haphazard approach is apt to yield uneven
results."
Targeted marketing to individual
customers-for instance, via email promotions, text messages, and pop-up ads-is
the top way private companies are using digital technology for customer
engagement/research (65%). Half of private companies that are using digital
channels for customer engagement/research are also encouraging customers to act
as brand ambassadors-for example, by posting online testimonials about products
and services and spreading the word via social media. Roughly the same
percentage (48%) use digital means to solicit customer insights for product
development, including innovation.
Private companies that are using
digital channels for customer engagement are notably positive about the
benefits, saying that digital means help their businesses do a better job of
marketing their products/services to customers (76% of respondents) and improve
customers' experience and overall satisfaction (72%).
Relatively fewer surveyed companies
are using digital tools to research customers: 43% are using such tools to
gather information on customers' behavior and preferences, while 40% are
employing digital means to obtain demographic information. Despite these lower
percentages, fully three-quarters (75%) of the companies using digital
technology in their customer-focused efforts say that doing so helps them
obtain better and more useful information.
"To make the most of their
digital investment and the information it yields, companies must have the right
processes and skills in place," says Esch. "Without these, the
customer data a company gathers may be of limited value. Increasingly, companies
are looking to hire people who know how to tailor data-analytics tools to a
business's customer-research needs, as well as understand how to put that data
to profitable use."
Regardless of whether they're
embracing digital technology or still relying on traditional means of customer
engagement/research (e.g., direct mail), private companies overall are
investing in customer engagement and research. That said, businesses enlisting
digital tools for this purpose are leading the way, reporting consistently
higher levels of customer-focused investment across the board.
Three-quarters (75%) of Trendsetter
companies consider the customer information they collect (via both digital and
traditional channels) relevant to their product development and innovation.
This percentage rises to 84% among private firms that use digital tools to a
great or moderate degree.
Nonetheless, roughly one-quarter
(28%) of private companies have not yet enlisted digital tools in their
customer outreach. Meanwhile, among those companies enlisting digital
technology to that end, only a minority (28%) believe that doing so is
currently helping them achieve lower costs.
"Most businesses are still getting
their feet wet when it comes to effectively harnessing digital technology for
customer research and engagement," says Esch. "As investments in
these areas begin to pay off, more companies are likely to follow suit. In the
process, they'll start moving up the learning curve, discovering the most
expedient ways of using digital tools-at which point, lower costs may join the
ranks of key benefits to using digital technology for customer outreach."
http://www.pwc.com/us/en/press-releases/2012/growth-focused-private-companies.jhtml
[This article was posted on July 30, 2012, on the website of ABA Banking Journal, www.ababj.com.]
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