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.

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.

Other Definitions of Customer Engagement

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

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.

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

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.

Examples of Customer Engagement

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.