Marketers can never underestimate the importance of customer engagement, according to a fascinating new study conducted by The Economist Intelligence Unit on behalf of Marketo Inc., a leading provider of engagement marketing software and solutions.
According to the study, marketing will change in six key areas, including customer engagement.
The importance of engagement can't be underestimated. A marketer’s greatest achievement is an engaged customer, the study says. Because engaged customers keep coming back, engagement is defined most often in terms of sales and repeat sales. More than six out of 10 (63%) marketers polled say that engagement is manifested in customer renewals, retention, and repeat purchases. Adding in the 15% who see engagement in terms of impact on revenue, a full 78% of marketers see it as occurring in the middle or later stages of the classic funnel. A minority (22%) view engagement in terms of love for a brand still important, but part of marketing’s legacy skill set.
The study comprised 478 senior marketers and CMOs from around the world. One of the eye-opening takeaways is the following: More than 80% of all marketers say that their organizations will need to undergo dramatic changes in order to keep up with increased technical and consumer demands.
“The transformation taking place in marketing is profound as marketers race to adopt technology and add skills that will allow them to manage the entire relationship with the customer,” Sanjay Dholakia, Chief Marketing Officer at Marketo, said in the study. “Three out of every four marketers say that in three to five years, they will own the end-to-end customer engagement. That ownership puts marketing right at the center of revenue generation and setting the company strategy. For marketers to successfully make the leap forward, and
drive a customer engagement strategy, they must embrace the use of digital marketing software.”
Here are the five other areas where marketers believe change will occur:
Marketing shifts from being a cost center to a revenue generator. Today, more than 68% of marketers feel that the rest of their company views their department as little more than a cost center. In three to five years, marketers say, about four out of five companies will classify the marketing function as a revenue driver.
Marketing becoming the chief customer advocate. Over the next three years, marketers believe their involvement in managing the end-to-end customer experience will skyrocket. Today, slightly more than a third of all marketers say they are responsible for managing the customer experience. However, over the next three to five years, 75% of marketers said that they will be responsible for the customer's lifetime end-to-end experience. Central to that shift will be the use of technology by the marketer to manage customer engagement. Today, barely half of all marketers use data to gain insights and engage customers. In three to five years, however, 81% say they will use data to make the connections with customers. Similarly, more than 80% of marketers will rely on technology to engage customers in a conversation to build advocacy and trust over the next three to five years.
Marketing needs digital skills and operational expertise. Marketers are aggressively seeking new skills–especially those who believe that change is urgent. Nearly four out of ten marketers (39%) surveyed believe businesses will require new blood in the areas of digital engagement and marketing operations and technology. A close third, and not significantly different, is skills in the area of strategy and planning (38%).
Marketers must leverage technology to succeed. Digital and data dominate investment forecasts for marketers. Technology investment plans by marketers illustrate both the dominance and fragmentation of digital channels. Three of the four most widely cited investments are aimed at reaching customers through different channels: via social networks, on mobile devices and on the old standby of email. The fourth, analytics, is needed to knit together data from multiple channels into a coherent and actionable portrait of the consumer.
The Internet of Things and real-time personalized mobile technology will shape the future. Over half of marketers expect the Internet of Things–where ubiquitous, embedded devices sweep across the Internet–to revolutionize marketing and customer experience by 2020. Almost the same proportion cites the power of real-time personalized mobile communications as the trend with the biggest impact.