CMOs in the US are more likely to project an increase in their acquisition of new customers (72%) than an increase in customer retention (56%) over the coming 12 months, according to the latest biannual CMO Survey [pdf] from Duke University’s Fuqua School of Business. Moreover, customer retention performance continues to drop, per the study’s respondents.
In this latest edition, CMOs reported an average increase of just 1.5% in customer retention performance over the past 12 months. That compares unfavorably with other past-year performance gains, which include an average of 3.5% for customer acquisition, 3.8% for sales, 3.3% for brand value and 2.8% for marketing ROI.
In fact, the 1.5% reported increase in customer retention is down from a 1.7% average in the prior edition of the survey and a 2.1% gain a year earlier. Performance gains were mixed across company types, with B2C service companies reporting the largest improvement in customer retention (of 3.8%) and B2C product companies the smallest (mostly flat at just +0.1%).
General difficulties developing and using customer insights may be at least partly to blame. On a 5-point scale (where 1 is poor and 5 excellent), CMOs rated their companies an average of just 3.2 on their ability to develop and use customer insights. Their self-described effectiveness in integrating customer information across purchasing, communication and social media was even worse, average just 3.4 on a 7-point scale. That’s the lowest point in at least 5 years.
One area that could be used to improve retention – mobile marketing – also fares poorly. CMOs rated mobile marketing’s performance for customer retention at an average of 3.14 on a 7-point scale. Even that was better than mobile’s contribution to customer acquisition, though, which averaged just a 2.72 score on the 7-point scale.
There is an encouraging result from the study: despite the continued low contribution from marketing analytics, there was a slight uptick in analytics usage. In this most recent edition, CMOs reported using marketing analytics in 35.3% of projects, up from 29% a year earlier and the highest level since in 4 years. In fact, B2C product companies said they use marketing analytics in almost half (45.6%) of their projects, double the proportion of B2C product companies (22.8%).
About the Data: The CMO Survey is conducted online twice a year. The latest survey was fielded from January 12 to February 4, 2016. The survey had 289 respondents, of whom 95% were VP level or above.