Firms boost customer focus

24 January 2013

DAVOS: Over 80% of major brand owners plan to adapt their customer strategies this year in anticipation of further changes in buying behaviour, research by PricewaterhouseCoopers has revealed.

The professional services group polled 1,330 chief executives in 68 nations, and found 82% expected to reformulate current approaches to customer growth, retention and loyalty in 2013.

A 51% majority of the sample added that boosting their customer base was among the top three investment priorities, and 49% saw evolving purchasing habits as a "serious business threat".

"Just as a chef in a restaurant will lose his job if his cooking cannot satisfy his customers, a service institution will not exist if it has no customers," said Weihua Ma, CEO of China Merchants Bank.

Another 75% of chief executives hoped to raise spending levels on technology, while 72% are seeking to modify organisational structures and 67% intend to enhance innovation capabilities.

"Our focus is very much on disruption – disrupting ourselves, disrupting the trends that have been established in the industry and moving forward with new strategies, new products and new ways of managing our organisation in order to keep pace and indeed accelerate the pace beyond others," said Stephen Elop, CEO of Nokia, the telecoms firm.

Exactly 25% of participants stated that new product development was the "main opportunity" for expansion this year, lagging behind organic growth in domestic markets on 32%.

An additional 17% of interviewees regarded organic growth in existing overseas operations as possessing this status, and 8% pointed to tapping new countries.

"I think you've got to drill down to see where the growth really is," said Alison Cooper, CEO of Imperial Tobacco Group. "There is growth in every market – but you've got to go granular."

China was seen as the most important growth market by 31% of the sample, with the US posting 23% here, ahead of Brazil on 15%, Germany on 12% and India on 10%.

Only 36% of business leaders, however, proved "very confident" about growth prospects in the next year, and just 18% predicted that the economic outlook was likely to improve.

"We believe the underlying growth trends will be slow. So we have to just be better than the competition in these markets, and that is also one of the reasons why we have to keep costs under control," said Martin Blessing, chairman of the board of managing directors at Commerzbank.

Data sourced from PricewaterhouseCoopers; additional content by Warc staff