A report from The Economist Intelligence Unit

The path to 2020: Marketers seize the customer experience

Australia and New Zealand Executive summary

Sponsored by

The path to 2020: Marketers seize the customer experience Australia and New Zealand executive summary

EXECUTIVE SUMMARY

The vast majority of marketing executives in Australia and New Zealand believe marketing owns the customer experience today. Yet they feel less strongly about improving the integration of marketing with the rest of the business. That was one of the major findings of a global study by The Economist Intelligence Unit, sponsored by Marketo, based on a survey of 499 high-level marketing executives. The following executive summary assesses the outlook of 120 marketing executives from ANZ—60 from Australia and 60 from New Zealand—and identifies several key changes that promise to redefine the nature of marketing throughout the region. l Australia likes e-mail: 77% of all Australian respondents chose e-mail as their numberone channel to the customer compared with 40% of today’s New Zealand respondents who feel the same. The Australian preference for e-mail contrasts with the rest of the world, where e-mail as a customer channel is number three at 51% of marketers. l Social media emphasis differs according to company size: Small & medium-sized firms in Australia rather than large firms are driving social media today, according to the

1

© The Economist Intelligence Unit Limited 2016

survey (65% versus 45%, respectively). New Zealand is the opposite case. There, 64% of large firms chose social media as their top customer channel today, while 56% of small & medium sized NZ firms selected social media. l Improving conversion rates also differ according to size: In Australia, 41% of marketers from large firms focused on improving conversion rates against 29% of marketers in small & medium-sized firms. New Zealand marketers are similarly split according to size. There, 50% of marketers from large firms selected improving conversion rates across marketing channels compared with 38% of marketers from small & medium-sized firms. l Customer loyalty and relationships is the number-one strategic programme by 2020: In Australia, 59% of marketers at large firms picked customer loyalty as their top strategic programme versus 45% of small & medium sized firms. The situation is reversed in New Zealand, where 44% of marketers at small & medium sized firms selected customer loyalty and relationships as their top strategic programme compared with 36% of marketers at large firms.

The path to 2020: Marketers seize the customer experience Australia and New Zealand executive summary

CHANNELS TO THE CUSTOMER

Australian marketers differed from their New Zealand counterparts and the rest of AsiaPacific in their views on the top three channels to the customer today and in 2020. Take e-mail. Today, 77% of all Australian marketers chose e-mail as their number-one channel to the customer compared with 40% of today’s New Zealand respondents who feel the same. The Australian preference for e-mail contrasts with the rest of the world, where e-mail as a customer channel is number three at 51% of marketers. Part of this difference is explained by Australia’s strict data privacy laws, in which customers must actively opt-in to e-mail marketing. This leads to smaller but more responsive e-mail marketing databases. By 2020, however, e-mail as a customer channel drops to number three in the eyes of all Australian respondents (53%) and declines slightly in New Zealand (38%).

Social media is the top customer channel today in New Zealand (60%), while it is number three in Australia (55%). For mobile, ANZ firms roughly track the preferences of Asia-Pacific and the rest of the world in terms of mobile web and mobile apps from now to 2020. However, at the individual country level, there are pronounced differences between Australian and New Zealand marketers. In New Zealand today, mobile web and mobile apps (27% and 38%, respectively) are well above Australian penetration (12% for mobile web and 15% for mobile apps). Fast forward to 2020. In New Zealand, mobile apps are the number-two channel to the customer (53% of marketers). Australian marketers rank mobile apps as their numberfive choice (37%) after e-mail (53%) and mobile web (41%). Mobile web is a complex story. By 2020, mobile web in New Zealand climbs to 45% of total marketers.

What are the top three channels through which customers experience your organisation's marketing efforts today and in 2020? Today

(% of respondents)

In 2020

70 60 50 40 30 20 10 0

Social media

Web

E-mail

Mobile apps

Direct mail

Mobile web

Print

Television

Radio

Other

Source: Economist Intelligence Unit survey, 2016

2

© The Economist Intelligence Unit Limited 2016

The path to 2020: Marketers seize the customer experience Australia and New Zealand executive summary

PRIORITIES, STRATEGIC PROGRAMMES EXPECTED BY 2020 ANZ marketers differ from the rest-of-world (ROW) in terms of their top two priorities from now until 2020. For the top priority of improving customer retention and loyalty, ANZ marketers are 11 points above ROW (63% versus 52%, respectively). A similar pattern holds for ANZ marketers’ number-two priority from now to 2020—better attribution of marketing efforts across channels. There was an eight-point difference between ANZ and ROW (43% and 35%, respectively). One area where ANZ marketers were less focused than their ROW counterparts involved better integration of marketing with the rest of the business. Integration in this sense means that marketing departments work handin-glove with sales, service and IT to focus around the entire customer journey. Only 22% of ANZ marketers selected better integration of marketing as a top priority compared with 41% of marketers in ROW. This finding is

curious given the emphasis by CMOs and other marketing leaders to focus on customer experience. Within the ANZ area, marketers in New Zealand seem more focused on better attribution of marketing efforts across channels (48%) as their number-two priority than their Australian counterparts (37%). Drilling further into the data, small & medium sized Australian firms (less than US$500m in annual revenue) are well above their larger colleagues (more than US$500m in annual revenue) in terms of the importance they place on better attribution of marketing efforts across channels (45% versus 28%, respectively). Large firms in Australia and New Zealand are closer to each other in terms of their numberthree priority, which is improving conversion rates across marketing channels. In Australia, 41% of marketers from large firms focused on improving conversion rates against 29% of

What are the two top priorities for your marketing organisation from now until 2020? (% of respondents) 60 50 40 30 20 10 0 Improving customer retention and loyalty

Better attribution of marketing efforts across channels

Improving conversion rates across channels

Better integration of marketing with the rest of the business

Scaling our ability for personalised customer experience

Other

Source: Economist Intelligence Unit survey, 2016

3

© The Economist Intelligence Unit Limited 2016

The path to 2020: Marketers seize the customer experience Australia and New Zealand executive summary

marketers in small & medium sized firms. New Zealand marketers are similarly split according to size. There, 50% of marketers from large firms selected improving conversion rates across marketing channels compared with 38% of marketers from small & medium sized firms. To execute on those priorities today, ANZ firms are deploying strategic programmes around customer acquisition (53% of all ANZ respondents), customer loyalty and relationships (48%), and pioneering new technologies to engage their audiences (33%). By 2020, these programmes remain the top choices, with customer loyalty and relationships taking the top spot (46% of all ANZ respondents), followed by customer acquisition (42%) and pioneering new technologies (29%). Currently, ANZ marketers are significantly more focused on customer acquisition as a top strategic programme vis-à-vis their global

counterparts (53% for ANZ versus 42% for ROW). At the same time, marketers outside of ANZ are in the midst of bringing new skill sets into marketing departments (20% ROW vs. 13% ANZ today). Moving to 2020, many of the geographic differences narrow except for the role of pioneering new and emerging technology to engage audiences as a strategic priority. Here, ANZ marketers are 11 points behind global competitors (29% ANZ versus 40% ROW). However, there is more than meets the eye when ANZ firms are analysed according to size. Large firms in Australia are 15 points above their small & medium sized counterparts when it comes to pioneering new technologies to engage their audiences (38% versus 23%, respectively). The difference is even larger in New Zealand, where 46% of large firms are focused on pioneering new technologies against 25% of small & medium sized firms.

What are the top two strategic programmes that define your marketing department today and in 2020? Today

(% of respondents)

In 2020

50 40 30 20 10 0 Focusing on customer loyalty and relationships

Focusing on customer acquisition

Pioneering new and emerging technologies to engage our audience

Adopting a mobile- and social-first approach to major marketing campaigns

Bringing new skill sets into the marketing department, eg, data scientists

Branding and customer experience

Becoming a data-driven marketing organisation

Source: Economist Intelligence Unit survey, 2016

4

© The Economist Intelligence Unit Limited 2016

The path to 2020: Marketers seize the customer experience Australia and New Zealand executive summary

CONCLUSION

Given that the combined physical population of Australia and New Zealand is less than 30m people, it makes sense that ANZ firms of all sizes are gravitating to data-driven marketing technologies and trends more than displaydriven technologies like tablets or smart TVs when they think about future marketing

5

© The Economist Intelligence Unit Limited 2016

impact. This suggests that ANZ marketers are re-tooling their organisations and platforms around continuous engagement and dialogue with the customers over merely publishing mass-marketing messages across platforms.

The path to 2020: Marketers seize the customer experience Australia and New Zealand executive summary

Whilst every effort has been taken to verify the accuracy of this information, neither The Economist Intelligence Unit Ltd. nor the sponsor of this report can accept any responsibility or liability for reliance by any person on this report or any of the information,

Cover: Shutterstock

opinions or conclusions set out in the report

6

© The Economist Intelligence Unit Limited 2016

London 20 Cabot Square London E14 4QW United Kingdom Tel: (44.20) 7576 8000 Fax: (44.20) 7576 8476 E-mail: [email protected]

New York 750 Third Avenue 5th Floor New York, NY 10017 United States Tel: (1.212) 554 0600 Fax: (1.212) 586 0248 E-mail: [email protected]

Hong Kong 1301 Cityplaza Four 12 Taikoo Wan Road Taikoo Shing Hong Kong Tel: (852) 2585 3888 Fax: (852) 2802 7638 E-mail: [email protected]

Geneva Boulevard des Tranchées 16 1206 Geneva Switzerland Tel: (41) 22 566 2470 Fax: (41) 22 346 93 47 E-mail: [email protected]