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Read Professor Moorman’s analysis of key survey results.

What Customers Want

The CMO Survey asks top marketers to rank order the following factors in terms of their importance to customers: low price, superior product quality, superior innovation, trusting relationship, excellent service, and brand. The specific question is “For your largest market, rank your customers’ top three priorities over the next 12 months” where 1 is most important. I charted these responses over the last three years to get a sense of how priorities have shifted, especially during these tough economic times.

Table 1 shows the rankings for each of the last three years as well as the average for each factor across the three years. Remembering that “1” is most important, the table indicates that marketers believe, on average, that low price is the most important priority for their customers (average rank 1.81) followed by superior product quality (1.94) and innovation (1.96). Trusting relationship (average rank 2.04), excellent service (2.13), and brand (2.22) are believed to be less important.

Table 1. What is Important to Customers

Both Table 1 and Figure 1 show that these figures have shifted over time. In particular, at the beginning of the recession (August 2009), low price dominated these rankings (1.66). Although superior product quality and superior innovation were not unimportant, low price was significantly more important. However, one year later (August 2010) and holding through August 2011, both superior product quality (increasing from 2.01 to 1.90) and superior innovation (increasing from 2.14 to 1.86) have gained importance. All three of these shifts are statistically significant. There were no discernible changes to the importance of excellent service, trusting relationship, and brand.

Figure 1. What is Important to Customers Over Time

So what customers want during an economic downturn goes beyond low price. They want products that will last or that stand out in some important way. This means companies can add value beyond slashing prices. I might add that unless they are low-price leaders, companies should add value by focusing on quality and innovation. These strategies are more defensible given competitors may not be able to make these investments. These strategies also differentiate the company from competitors and help create a distinct image of the company that customers rely on to make purchasing decisions and share with others.

If I cut the data by whether the company is focused on products or services, a few important differences emerge. Reporting the August 2011 data, low price is important for service companies (1.69 vs. 1.98 for product companies) as is a trusting relationship (1.95 vs. 2.11 for product companies). On the other hand, superior product quality is more important for product companies (1.75 vs. 1.99 for service companies) as is brand (2.07 vs. 2.46 for service companies). Superior innovation is equally important to both types of companies (1.93 for service companies and 1.90 for product companies).

  1. Hi Christine, I am sure many appreciate your work and that of Deloitte. I all of last year on a sabbatical studying most reports by Deloitte, McKinsey, HBR, Aberdeen as well as reading 8 thought leader books, only to discover the work I had been doing for HP between 1990 and 2001 exemplified the needs, requirements of today’s value economy.

    I will not assume that you missed some crucial insights herein as they may be inferred in the categories of need – trust, brand and innovation. But I’d like to add emphasis on a few that I experienced as vital firsthand:

    1. For the last decade or therein, experts have said purpose – or what a company stands for is more critical than what they make. Most organizations languish in defining purposes that inspire internal and external regard. which is why we seek to help them do so beyond the corporate interpretation.

    2. It’s ironic to do a survey like this by just asking marketers what customers want and not asking customers. That said, most organizations look at customers with tainted corporate lens assuming customers lives rotate around a product. They do not. I have found it far more productive, valued and empathetic to see customers beyond the product so their values are clear and they may provide a bridge back to brand where feasible to add them. I have plenty of examples where this was the game changing strategy. We apply an advanced version of systems thinking and value creation. Important work.

    3. I appreciated an earlier Deloitte report that revealed how CEO’s are mandating CMO’s as responsible for revenue growth and a better customer experience. It shows why most (75%-85%) fail. Great work. We have since refined a solution that is more conscious to other factors not covered in that article – such as; short sighted expectations by CEO’s, the importance of culture, inclusion, business agility, cross functional support and why insight – real market insight, not what CMO’s imagine inside factory walls – is everything.

    I will stop here as I think you guys do a great job validating what and why and as you learn to connect with those of us that dare to vision solutions that integrate humanity, technology, innovation and purpose – we all win. Best, Bill.

  2. Christine Moorman says:

    Hi Bill,
    Thanks for the nice post. I agree that customers should be asked. However, this survey focuses on marketing leaders’ views on the marketplace. These should be informed by their own interactions with and research about customers. I also agree that many company leaders are tempted by short-term rewards and manage myopically. Marketing leaders must be the voice of the customer over the long-term in companies. Otherwise, there will be no profits nor growth to be had! Stay tuned as new results will be out soon.

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