SOURCE: Aberdeen Group, a Harte-Hanks Company

March 22, 2007 12:41 ET

Price Compression Number One Threat to Businesses in 2007

2007 Aberdeen Report Reveals Price Compression, Market Share Erosion, and Employee Retention Represent Top Three Business Challenges for 2007

BOSTON, MA -- (MARKET WIRE) -- March 22, 2007 -- According to the 2007 Aberdeen Report the chief threat businesses face this year is price compression. Sixty-three percent (63%) of the survey's 3,170 respondents named price compression as one of their primary competitive threats (#1 threat for 35%), with 18 percent identifying market share erosion as the predominant issue, and 17 percent naming employee retention as the key challenge. Those identifying pricing pressures (58%) or market share issues (55%) as challenges responded unanimously with the same planned counter-strike, namely investment in sales and marketing. Meanwhile, companies primarily concerned about employee retention plan to mitigate their risk by investing in additional staffing, a top two budget item for 60 percent of this group.

European companies are slightly more concerned than their North American counterparts about price compression (39 percent to 35 percent) and people retention (18 percent to 16 percent), but are less worried about market share erosion (15 percent to 18 percent). Regardless of geography, price compression is a more pressing factor for small businesses (under $50M U.S.) with 63 percent citing it as their primary problem versus 16% of companies with revenues over $250M U.S.

The destructive tendencies of the top three 2007 competitive threats can be mitigated, in part, by strategic investments in customer and employee facing technology, explains Alan Hubbard, SVP, Sales & Marketing Group, Aberdeen Research. "Investments in the areas of personalization and analytics can have a pronounced impact on business deterrents and profitable growth. These technologies shape the customer experience and provide invaluable insight into market dynamics. Better information and real-time insight into customers and consumers are key components to managing price pressures and market share issues. In the end better business also means happier employees leading to improved retention."

The data points referenced herein are part of the 2007 Aberdeen Report, scheduled for release next month (April 2007). Spanning five years, two million respondents, and over 644,000 organizations, the Aberdeen Report is one of the deepest available research documents on the state of technology and business. The first in a series of annual reports by the Aberdeen Group, the research looks at industry, geography, organizational size, and role across various business drivers and outcomes. The $1,995 report will be made available free of charge to the first 2500 registrants. End users may pre-register for their complimentary copy at http://www.aberdeen.com/2-0/pre_registration.asp

About Aberdeen Group, a Harte-Hanks Company

Aberdeen is a leading provider of fact-based research and market intelligence that delivers demonstrable results. Having benchmarked more than 30,000 companies in the past two years, Aberdeen is uniquely positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. As the trusted advisor to the global technology markets, corporations turn to Aberdeen for insights that drive decisions.

As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information - Opportunity - Insight - Engagement - Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com.

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