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72%Companies that believe their budget for customer insights is too low

The funnel is dead. Long live the consumer decision journey

Without the ability to understand their customers, companies will find it difficult to be where their customers are.

If there were 10 Commandments for marketing, #1 would be: Know thy customer. While it’s one of the most fundamental principles in business, companies are still having trouble adhering to it.

72% of companies believe their budget for customer insights is too low, according to a recent survey of almost 700 senior executives we completed. Even more disturbing, only 6% of companies surveyed understand customer needs extremely well while 45% of companies admit they have limited to no understanding on how their customers interact with them digitally.

Customers now are also often actively engaged with the brand — and their friends and peers — after they’ve bought the product or service using social media and the Web.

Without the ability to understand their customers, companies will find it difficult to be where their customers are. Part of the reason that companies are having trouble understanding their customers is that customer behavior itself is complex. For example, our research shows that 44 % of shoppers use their mobile phone while shopping to check websites, compare prices, and learn more about products.  In France, around a third of shoppers buy online, but pick up their product in a store.

However, the more fundamental reason is that shoppers are shopping in a different way that requires companies to change how they think about and interact with their customers. It used to be that marketing and sales leaders thought in terms of the classic funnel, which represents the buying process as an ever-narrowing array of decisions and choices until purchase, with little regard for the post-purchase experience. In reality, the channel-surfing customer of today is often expanding the set of choices and decisions after consideration. Customers now are also often actively engaged with the brand – and their friends and peers – after they’ve bought the product or service using social media and the Web.

Read the full article on The Economist