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Customer Engagement

Customer engagement comprises the systems, tools, resources, and processes an organization has in place to capture, disseminate, and use customer information for the purpose of cultivating and managing customer relationships.[1]

Customer engagement is a worthy goal for any brand, and the surest path to loyalty. The best way to build it is with customer-centricity. That means every aspect of the brand is geared toward what customers want from it. It means every experience, every detail, every email is positive. Every interaction should affirm the customer's decision to make a brand part of their life.[2]


Other Definitions of Customer Engagement[3]

In March 2006, the Advertising Research Foundation announced the first definition of customer engagement as "turning on a prospect to a brand idea enhanced by the surrounding context." However, the ARF definition was criticized by some for being too broad. Various definitions have translated different aspects of customer engagement. According to Forrester Consulting's research in 2008, it has defined customer engagement as "creating deep connections with customers that drive purchase decisions, interaction, and participation, over time". Studies by the Economist Intelligence Unit result in defining customer engagement as, "an intimate long-term relationship with the customer". Both of these concepts prescribe that customer engagement is attributed by a rich association formed with customers. With aspects of relationship marketing and service-dominant perspectives, customer engagement can be loosely defined as "consumers' proactive contributions in co-creating their personalized experiences and perceived value with organizations through active, explicit, and ongoing dialogue and interactions". The book, Best Digital Marketing Campaigns In The World, defines customer engagement as, "mutually beneficial relationships with a constantly growing community of online consumers". The various definitions of customer engagement are diversified by different perspectives and contexts of the engagement process. These are determined by the brand, product, or service, the audience profile, attitudes and behaviours, and messages and channels of communication that are used to interact with the customer.

Since 2009, a number of new definitions have been proposed in literature. In 2011, the term was defined as "the level of a customer’s cognitive, emotional and behavioral investment in specific brand interactions," and identifies the three CE dimensions of immersion (cognitive), passion (emotional) and activation (behavioral). It was also defined as "a psychological state that occurs by virtue of interactive, co-creative customer experiences with a particular agent/object (e.g. a brand)". Researchers have based their work on customer engagement as a multi-dimensional construct, while also identifying that it is context dependent. Engagement gets manifested in the various interactions that customers undertake, which in turn get shaped up by individual cultures. The context is not limited to geographical context, but also includes the medium with which the user engages.


Evolution of Customer Engagement[4]

In order to fully capitalize on the opportunities that customer engagement holds, it is important to recognize that engaging customers is not the same that it was just a few years ago. Customers' expectations for their online experiences with a company are constantly evolving "“ shaped by the rise of social networks and other consumer digital experiences. For instance, a study released at the beginning of last year revealed that 71% of customers expect online assistance with their issues within five minutes. In fact, 83% of survey respondents listed "getting my issue resolved quickly" as the number one element of a great online experience. This was surely not the case ten or fifteen years ago.

The Evolution of Customer Engagement
source: Higher Logic

  • Stage One: Customer-to-Company Engagement: Respectfully known as "the old days" when customer engagement with a company was limited to instances of direct communication. A customer might call on the phone, visit your offices in person, or send an email to your customer service department when they had an issue that needed addressing. Engagement was direct and typically happened one customer at a time with a specific set of company representative tasks with interacting with customers (customer service, sales, etc.). While these one-on-one instances of engagement might have been more personalized, they were also time consuming and had a limited ability to scale. With today's customers demanding nearly instant answers, simple Customer-to-Company engagement often struggles to keep up.
  • Stage Two: Customer-to-Content Engagement: Three factors influence the evolution of the second stage of customer engagement.
    • Customers are now more likely to spend time educating themselves online before making a purchase.
    • Customers have a higher demand for and comfort with online self-service customer support.
    • The proliferation and ease of maintenance of online information by businesses.

If your business has reached this stage, customer engagement revolves around the relationship between the customer and the online information that your company provides. By going to your website, opening an email, or subscribing to your company newsletter, customers are using their interactions with your content to demonstrate their engagement. You can tell how engaged with your company a customer is by how frequently and consistently they consume, interact with (comments, etc.), and share your content. The content you provide positions your business as a trusted resource and helps to answer those questions your customers desperately need answered quickly.

  • Stage Three: Customer-to-Community Engagement: The next evolution in customer engagement involves your customer having a relationship with your entire business ecosystem. Here are some common examples:
    • Customers talking to other customers
    • Customers getting advice from partners
    • Customers collaborating with your product management team in a small group to provide product feedback

These are all instances where your evolved engagement plan benefits not just your customers, but your company as well.


The Importance of Customer Engagement[5]

Gallup research shows that a fully-engaged customer represents 23% more revenue than average. If you don’t have a customer engagement strategy, you could be missing opportunities to interact with customers and build a relationship with them. There is no single customer engagement method that works for every company across all industries; however, a sincere focus on empathy, clarity, and simplicity in your dealings with customers and prospects should be the basis for all of your customer engagement activities. There are many positive customer engagement examples that can be used to model a customer engagement strategy; major brands use everything from funny, responsive social media agents to personalized discounts and offerings to inspire loyalty and affection in their customers.


Customer Engagement Cycle
source: Yasmine Khater


Customer Engagement Strategies[6]

Businesses that focus on customer engagement are focused on value creation, not revenue extraction. They give people something meaningful beyond a sales pitch: a brilliant end-to-end customer experience, great content, or interactive, real-time customer support. Here are seven customer engagement strategies that can build a loyal customer following:

  • Customer Experience Is Priority #1: As Jeff Bezos, CEO of Amazon will tell you, obsessing over your customers is key. It starts with your company culture and ensuring your customer support team, the frontline of your business, is empowered by and shares your focus on providing an amazing customer experience. For example, Zappos, the leading online shoe retailer renowned for their customer service, doesn’t enforce call time tracking because they believe their reps should spend that little extra time with customers rather than be focused on getting through each call. The customer experience you provide is important because it gives marketers and business owners a way to increase satisfaction, loyalty, and advocacy. A study by White House Office of Consumer Affairs found that 80% of U.S. consumers would pay more for a product or service to ensure a superior customer experience. Think about your business model and how you can best serve your customers. When do your customers need you? What hours do you need to be available to them? Seamless, the online food ordering service and one of my favorite companies (not least because I love to eat at all hours!), services customers in different time zones across the US. Not only are they fantastic at providing customer service around the clock but they’re stellar at timely, relevant offers like snow day discounts and engaging you with fun food facts across their Twitter and email channels.
  • Humanize your Brand: At the heart of everything, it’s important to understand that every customer wants to feel you understand their needs and that they can relate to your brand. This is easier for fun consumer brands like Red Bull or Nike than for more conservative brands like banks or B2B companies. But even these businesses can be humanized without trying to squeeze themselves into a contrived persona that won’t resonate with their audience. For example, find a personality within in your organization who is passionate about your brand and a natural communicator. Grow that person into a thought leader and give them a voice to humanize your brand and engage your audience. Create opportunities for them to build their presence and promote your brand – they can regularly blog on your own site and guest blog on others, be used in video content, engage in speaking opportunities, present webinars and publish white papers and ebooks – all ways to establish your brand’s voice with a trusted face.
  • Get Sassy on Social…: Social media is a great place to let your brand off the leash a little. Voicey personas are common on Twitter, and it’s a great way to get interest, interaction, and even viral traction for your brand. For example, Wendy’s has gained a lot of attention for their hilarious tweet roasts of other burger chains. This has gotten them a ton of attention, with Twitter users begging Wendy’s to make fun of them.
  • …But Understand Where the Line Is: Sassy is good, but offensive is very, very bad. Almost every social media manager has the brand social fails that haunt them in their dreams, from pre-scheduled posts that appear right after a tragedy to misjudged jokes to accidentally tweet a link to x-rated material from the US Airways corporate account. In 2016, Razer was attempting to tease Apple about the lack of SD drive on the 2016 MacBook Pro, but instead offended a lot of people and eventually had to tweet an apology. That would be considered the opposite of Customer Engagement.
  • Personalize Customer Communications: 70% of US retailers are making customer personalization a priority in 2017. Personalization can take many forms, from the auto-generated happy birthday email to a sophisticated algorithm that recommends products based on browsing history. Amazon and Netflix are out in front when it comes to recommendation engines, but there are simpler solutions. True&Co, an online lingerie company, uses a quiz to personalize recommendations for potential customers. This is a brilliant way to help people find a perfect fit online and to make what can be stressful — trying to find a flattering bra — that much easier. In an interview with Emarketer, CEO Michelle Lam explained, “We demonstrate that it’s a conversation between us and our customers. For everything they tell us, we give them a response, whether it’s a recommendation from their personal shop, a fitting tip or a tailored marketing message. We avoid spamming customers with the wrong types of bras.” Personalization should be about making the user feel welcomed and known without feeling like you’re strip-mining their data.
  • Create Useful Content: Using content to educate customers was a previously underused customer engagement strategy but it’s now becoming increasingly common to enhance the customer experience and increases satisfaction. According to this Google study, 48% of smartphone users are more likely to buy from companies whose mobile sites provide instructional video content. Home Depot saw that their customers were going to YouTube to find instructional videos for DIY projects, so they decided to create their own. Their “how to” collection now has over 43 million views.
  • Really Listen to What People Are Telling You: The flip side of using social media as a way to differentiate your brand is using it to listen to customer complaints and really respond. That can be customer service-oriented, like JetBlue’s twitter responses. Every few minutes they are responding to customer needs, giving stressed-out flyers quick responses to their concerns and complaints. Whether or not social listening informs your long-term goals, it helps people to feel heard by your brand, and it’s a great way to get negative feedback. While it can be hard to hear sometimes, honest negative customer feedback can be one of the most important drivers for a change in an organization. Ultimately whatever customer experience strategies you employ, be consistent – think about the brand messaging you employ, your customers’ end-to-end experience from their very first interaction and the various departments these customers will move through. Give them a consistent (and exceptional) experience and you’ll be rewarded with their trust and loyalty.


B2B Customer Engagement[7]

For B2B sustainable growth, the Customer Engagement Lifecycle, illustrated below, depicts the importance of active, meaningful engagement with your customers and why you cannot realize profitable growth without it. Market leading companies such as Oracle, AmerisourceBergen and HCL have long understood this principle, and their return to investors shows it. Customer Success has quickly become essential for companies to retain and expand their customer accounts, especially those in SaaS and subscription businesses because they feel the pinch of churn much more than other type of business. According to Ramdas, “There is pressure on public companies utilizing a subscription model to report on churn, since venture capital firms give high weightage to churn rates. As such, Customer Success has become equal in importance to Sales, Marketing, Engineering, and Product teams within SaaS companies.Ccustomer engagement, which is a key driver to Customer Success, now has a metric to which CXOs must pay attention and invest. Successful customers are often the ones willing to proactively endorse your company and product to the world. If you sustain long-term relationships with customers, your business will be able to use that revenue to expand and improve your offerings, resulting in more sales with higher margin.


B2B Customer Engagement LifeCyle
source: Geehan Group


Examples of Customer Engagement[8]

Customer engagement is an area where many companies have an opportunity to differentiate themselves by thinking critically and more creatively about what engagement is and could mean for them and their customers. Consider what these brands have done and the impact their initiates have had on their relationships with their customers:

  • Ryanair implemented a series of improvements to its customer experience that would, in the words of their CEO, help them stop p***ing off their customers but wouldn't threaten their cost leadership position. Doing so has helped them drive record profits and passenger numbers.
  • Carhartt has implemented technology that connects customers with their advocates, thus giving them access to 'trusted advice' when researching and then making a purchase. Doing so has lead to a 6-10 fold increase in their conversion rates over other self-service customers and a 10-25% increase in the average order value.
  • Gravity Payments’ CEO Dan Price implemented a new minimum salary of $70,000 for all employees, in large part, to promote employee engagement, productivity and emotional well-being. However, six months after the initiative, leads per month had grown from 30 to 2,000 inquiries per month, the firm had received 1,000s of new job applicants, profits have doubled, employee retention has soared and client retention has grew from it’s already high base of 91% to 95% (the industry average client retention rate is 68%).
  • Swisscom is combining innovative technology and some of their existing customers to crowd source their ‘in-field’ customer service. Doing so has helped them deflect calls, reduce the number of support requests in many of their traditional customer service channels, increase their overall customer satisfaction and generate additional sales.


See Also

Customer
Customer Acquisition Cost (CAC)
Customer Centricity
Customer Data Integration (CDI)
Customer Data Management (CDM)
Customer Demographics
Customer Due Diligence (CDD)
Customer Dynamics
Customer Effort Score (CES)
Customer Churn
Customer Engagement Hub (CEH)
Customer Experience Management (CEM)
Customer Lifecycle
Customer Lifetime Value
Customer Loyalty
Customer Needs
Customer Retention
Customer Service
Customer Service Management
Customer Relationship Management (CRM)


References

  1. Defining Customer Engagement Mindtouch
  2. What is Customer Engagement? Access
  3. Other Definitions of Customer Engagement Wikipedia
  4. How has Customer Engagement Evolved? Higher Logic
  5. Why is Customer Engagement important? Clarabridge
  6. 7 Customer Engagement Strategies That Marketers Can’t Ignore Outbrain
  7. B2B Customer Engagement Sean Geehan
  8. Examples of Customer Engagement Forbes