BCG: Over Half of Consumer Firms Fail to Measure ROI on Customer Insights
More than half of consumer-facing companies are not measuring the return on investment from their customer insight efforts, hindering effective resource allocation and growth tracking, according to BCG research.
A significant portion of consumer-facing companies are failing to quantify the return on investment (ROI) from their customer insight (CI) and commercial analytics (CA) functions, according to a new report from Boston Consulting Group (BCG).
Consumer companies invest tens of millions of dollars annually in CI and CA to drive growth and strengthen brands. However, BCG's research indicates that over half of these companies do not regularly measure the payoff from these substantial investments. This lack of measurement makes it difficult to assess efficiency and justify strategic decisions.
The study, conducted in late 2017 with 200 companies across various sectors, found that ROI measurement is particularly absent in less mature CI functions. Companies in Stage 1, where CI is nascent and often outsourced, show the least amount of ROI measurement. In contrast, more mature functions (Stages 3 and 4) are more likely to track returns.
BCG emphasizes that implementing ROI measurement introduces transparency and discipline, which can accelerate the development of CI functions and enhance their capacity for experimentation and innovation. Companies with mature CI functions tend to exhibit better performance in key metrics such as customer loyalty and growth rates.
The report urges consumer companies to address this measurement gap. Systematically tracking the ROI of CI and CA investments will enable companies to better allocate marketing resources and ultimately increase the business value derived from customer insights.