Saturday, December 22, 2007

Profitability from Customer Affinity

a new CMO Council Study finds most B2B technology companies continue to fall far short of meeting customer expectations and commitments. They overestimate their effectiveness in addressing customer needs, while a majority of customers feel ignored and trapped in vendor relationships that are marred by broken promises.

This is worrisome as 99 percent of customers surveyed said, they would either scale back or terminate relationships with vendors who fail to build customer trust and less than seven percent of customers believe their vendors are extremely well-aligned with their needs.

Key findings:

- Fifty-six percent of vendors perceive themselves as being extremely customer-centric, but only 12% of customers agree. An overwhelming majority of vendors—85%—are convinced that they are getting better at responding to customer needs, but 45% of customers disagree.

- More than half of customers surveyed described their relationships with vendors as “dependent and captive,” “struggling for common ground,” or “combative and adversarial.” When asked to describe their relationships with the channel, 45% of customers surveyed evaluated their channel relationships similarly.

- More than 30% of customer respondents said they would terminate relationships with companies that fail to gain their trust; 62% would scale back existing engagements, while 7% would no longer consider the vendor for future business.

- Co-innovation with customers is vital to building customer affinity. Nearly six out of 10 customers say co-innovation is extremely or very important, with another 30% agreeing that it is at least somewhat important. Customer responses indicated that collaborative, two-way conversations—followed by continuous improvement—build customer affinity.

- Vendors seem to understand that channel partners truly are partners in their success, and that going to market effectively with the channel is critical to maximizing their value to customers. Yet only 8% of vendor marketing respondents said they do an extremely good job of teaming with the channel to build stronger customer affinity.

more and who leads the first annual Customer Affinity Index here

Download Executive Summary (PDF, after registration)

The study is based on surveys and interviews with more than 1,000 leading B2B technology buyers, IT marketing and customer relationship executives and their channel partners.

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