While 94% of retail marketers believe that their company truly embodies customer obsession, only 18% are seeing the revenue growth they expected from those efforts, according to a survey from Listrak and Forrester Consulting. Retailers are leveraging new features and functionalities to achieve greater efficiency (63%), better innovation (58%) and improved customer satisfaction scores (49%), but many are not seeing tangible bottom-line benefits from these investments.
When it comes to investing in marketing technology (martech), only 22% of retailers prioritize whether it can improve business outcomes, such as higher customer lifetime value (CLV), revenue growth, acquisition, engagement and conversion.
Instead, retailers more often classify the following criteria as very important to the success of their marketing investments:
- Scalability (43%);
- Training and support (35%); and
- Features/functionality (30%).
Forrester surveyed 200 North American e-Commerce and marketing decision makers from retail organizations, with revenues ranging from $100 million to $5 billion. The retailers in the study fell into three groups:
- 32% were labeled Customer-Novice (the weakest);
- 37.5% were labeled Customer-Focused (those in the middle that are making progress),
- 30.5% were labeled Customer-Centric (those that are customer-obsessed).
Think It’s Easy To Tie Features To Business Outcomes?
As many as 84% of retailers say it is somewhat or very easy to tie features to business outcomes, but only half say they measure the most basic metric of incremental performance (or lift). This suggests a worrying issue: retailers may only think it’s easy to tie features to outcomes, because they are not correctly measuring outcomes.
“Perhaps it’s more difficult to tie a feature to a specific outcome,” Kramer said, adding that retailers often lack the resources or skill sets to execute effectively. “Is your team capable of implementing these features? If they’re not, which is often the case because teams are so small, then you have to rely on the partnership of the vendor to drive business results. If you are thinking you can pay for a feature and expect business outcomes, you’re really in for an unfortunate experience.”
In conducting this study, Listrak sought to understand the origins of the disconnect between retailers’ customer-obsessed marketing efforts and their actual business outcomes, particularly as it pertains to the evaluation, purchase and utilization of martech.
Most Retailers Admit They Would Redo Martech Strategy
If retail marketers knew now what they did when deploying martech capabilities, 60% say they would set up a better strategy to measure its success. Retailers also would:
- Set up a specialized or centralized team to manage the complexity (49%);
- Discuss desired business outcomes with their vendor (46%);
- Place a greater emphasis on business outcomes over functionality (43%); and
- Ask for more support from their vendor (36%).
“It comes down to relationships,” Kramer said. “It’s within the retail organization; it’s leaders having excellent relationships with their staff so that expectations are aligned, in terms of new customers, revenue growth and contribution from former customers. In order for us to get growth, we need X amount of contribution from customers that we don’t already have, and we need Y amount of contribution from customers that we already do. From there, it’s relationships and partnerships with your technology and marketing partners in order to achieve those goals.”