Most Marketers Don’t Know Their Target Customers, Study Finds

Apr 27, 2005 11:08 PM  By

DNA isn’t just for labs. Customer-centric DNA is the very stuff of life for firms that want to deliver a superior customer experience, according to Forrester Research Inc. In a provocative report, Forrester analyst Bruce D. Temkin describes the deployment of a DNA diagnostic tool—and the disturbing results of the experiment.

Forrester evaluates customer-centric DNA using two criteria, customer familiarity and organizational engagement. The tool consists of four questions for each of these criteria; the questions explore such issues as whether the company has a clearly defined set of target customers, whether primary research is used to understand these customers, and whether employees and senior executives interact with and are rewarded for improving the experience of target customers. After applying the tool to 140 large North American firms, here’s what Forrester found:

* Most firms don’t know who their key customers are. Only 34% of the respondents have a consistent and vivid image of their target customers—hardly surprising, considering that only 39% use primary research to understand the preferences and behaviors of these segments.

* Although 63% of senior execs “consistently communicate the importance of serving target customers,” relatively few firms practice this dictum. Just over a third (35%) of respondents closely monitor the quality of interactions with target customers, and a mere 32% reward employees for improving the customer experience.

* Customer-centric DNA is largely misdirected—upon charting the survey responses, Forrester found that only 21% of companies showed high levels of both customer familiarity and organizational engagement. A stunning 55% of respondents fall into the misdirected category, lacking the customer familiarity they require to provide a satisfying shopping experience.

For more information, visit http://www.forrester.com.