This should be driven by customer needs and wants, according to best practice studies. These techniques are well understood in the academic world, but cor- porate practice still seems to be in the dark ages. Yet segmentation in practice is dominated by easily available demographic data, rather than data on actual customer behaviour, which is more difficult to obtain. Customer profitability DOES can be measured and is also known to be a key driver of shareholder value, according to academic studies. Again, the state of marketing practice is poor. Remarkably few organisations use this vital tool.
MARKET SEGMENTATION
Customer retention analysis (CRA) and root cause customer defection analysis are widely written about. Market research firms can offer extensive data on retention and loyalty. Once more, the take-up is pitifully low. SPEND ON MARKET RESEARCH The low value that marketing places on measurement is brought home by looking at what marketing spends today on market research - about £500 million annually in the UK. Compare this with the amount engineers spend on research and development - more than 100 times what marketing spends on research. Or compare it with the amount one oil company recently spent on a new financial information system - X500 million - the same figure that all UK companies spend on marketing information.