Aymen explains Customer Engagement — Part 1
An attempt to expound the myth of customer engagement.
“Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.” Steve Jobs
In the 1900s, during the age of manufacturing, companies like Ford, GE, Boeing found out that mass-manufacturing and mass-production is the reason of success, and that was a concept that stayed till the 1960s, with the success realized by the mass-manufacturing concept, with flights crossing countries and continents building global connections & with development of the transportation systems, distribution became key factor of success.
In 1990s, internet started gaining power, and the dot-com boom started, having connected PCs & supply chain meant that those who control information will dominate the markets, and many companies saw this opportunity and became part of the dot-com boom such as Amazon, Google, Intel, Cisco and more.
Yet with the internet connecting the world, and having the ability to do everything from the palm of our hands empowered buyers, and the demand of new level of service was rising, that’s when the age of customer began back in the 2010s.
Within the last decade, many business strategies, concepts and approaches were developed to support businesses with their successes, from “Outside-in Strategy”, to focusing on developing and managing customer experience all the way to designing customer journeys. With the increase reliance on the digital world, which became apparent for the past year, and the demand for more engagement shown through the rising numbers of customer interactions in the contact center world, it became more and more obvious that applying a strategy to manage such interactions and more, can help in keeping customers loyal. And that’s when Customer Engagement steps in the game.
In this series, I will try to explore the world of customer engagement, and share insights that can shed the light on this world. So let’s start by understanding what is customer engagement, and why is it important, as I will try in this part of the series to expound the myth of customer engagement.
What is Customer Engagement?
The 1st definition known for Customer Engagement was by the Advertising Research Foundation back in 2006, and their definition was that customer engagement is “turning on a prospect to a brand idea enhanced by the surrounding context”. Yet it was too broad. In 2008, Forrester Consulting’s research defined customer engagement as “creating deep connections with customers that drive purchase decisions, interaction, and participation, over time”.
We will find many definitions, yet few definitions I came across which sum up customer engagement as a definition in the way I think customer engagement is.
“Customer engagement monitors the relationship between a consumer and a company. This can be done through various channels, varying from email, click-through-rate, online reactions, feedback, re-purchasing and more. This relationship is important for encouraging customer loyalty, increasing awareness and looking at customer satisfaction.” mycustomer.com
“Customer engagement is driven by the customer. When they comment on a Facebook page, register for a webinar, read a knowledge base article or contact customer support, they are engaging with your brand. Customers must choose to engage with a company — compared to customer experience, which can happen passively.” freshdesk blog
Yet, you can also identify from various experts that there are various flavors of what can be considered as customer engagement, here are some of the experts’ definitions (Thanks to Bob Thompson from CustomerThink for majority of the below):
- “Customer engagement is what you hope customers will do for you: it’s either enticed or earned. Great CX earns it.” Lynn Hunsaker
- “End-to-end customer engagement platforms enable companies to be proactively contextually relevant in real-time which lead to measurable revenue growth.” Christine Crandell
- “Customer engagement (is) the representation of the relationship between your brand and your customer. A fully engaged customer should be engaged to the point of advocacy — i.e. they become a ‘fan’ of your brand.” Ian Golding
- “The ongoing interactions between company and customer, offered by the company, chosen by the customer.” Paul Greenberg
- “Customer engagement is something different. It’s a behavior and attitude, an outcome of customer experience.” Bruce Temkin
- “Customer engagement is how you engage with customers. By engaging with them you give them an experience.” Colin Shaw
As you can see, there is various views on customer engagement, and they all agree on the same concept, it is all about engaging with your customers!
Why Customer Engagement matters?
To understand why customer engagement matters, let’s see what the studies are saying about the importance of customer engagement:
- A study by Hall and Partners’ “Engager” shows that up to 2/3 of a brand’s profits may rely on effective customer engagement.
- Gallup research shows that a fully-engaged customer represents 23% more revenue than average.
- Thunderhead.com Customer Engagement 3.0 Report concluded that disjointed communications caused by company silos presents a major challenge. 85% of customers feel negatively toward businesses that require them to provide information multiple times and 27% say it would make them consider leaving for a competitor.
- According to Harvard Business School, 5% increase in customer retention rate can increase profit by 25% to 95%.
- “Customers who engage with companies over social media spend 20% to 40% more money with those companies than other customers.” Bain & Company.
- Salesforce’s ‘State of the Connected Customer’ report, found that 80% of customers say the experiences provided by a company are as important to them as its products and services.
- According to Accenture Research’s ‘Global Consumer Pulse survey, 71% of consumers report spending more time online during the COVID-19 crisis.
Many companies and brands still focus on acquisition, clicks and conversions. While any engagement in between can sometimes be sidelined. Yet, as we see from the above data, customer engagement has a direct impact on revenue and retention, and is key in building up loyal relationships with customers. Effective engagement results to higher conversion and lower number of returns.
And in order to ensure the creation of long lasting loyal customer, you have to understand the mediums of customer engagement:
- Social Media.
- Targeted campaigns geared towards the customer’s location, number of visits online, previous buying experience, and customer feedback.
- Personalized experience through mobile apps.
- Interaction via phone, chat, messaging, email & face2face.
Customers nowadays, especially since COVID-19 epidemic, rely on the digital world to stay connected, and their demands grew and evolved. And part of the new age customer’s demands is staying connected with brands. They need to be kept interested and engaged. According to Statista, we spend daily on an average of 2 hours and 25 minutes on social media.
I read in the guardian once an article titled ‘Shock! Horror! Do you know how much time you spend on your phone?’, where it was mentioned that according to research from RescueTime, one of several apps for iOS and Android created to monitor phone use, people generally spend an average of 3 hours and 15 minutes on their phones every day, with the top 20% of smartphone users spending upwards of 4 hours and 30 minutes.
So brands should focus their attention to the medium where we spend big part of their lives on, in other words, engagement should go digital.
Remember, engagement can take the form of voice call, chat with a human or a bot, messaging on WhatsApp, and commenting on Facebook.
And in order to engage with your customers effectively, understanding your customer is a must, according to Gallup CES 2014 report, when it comes to engagement, there are 3 types of customers:
FULLY ENGAGED customers are emotionally attached and rationally loyal. They’ll go out of their way to locate a favored product or service, and they won’t accept substitutes. True brand ambassadors, they are a company’s most valuable and profitable customers.
INDIFFERENT customers are emotionally and rationally neutral. They have a take-it-or-leave-it attitude toward a company’s product or service.
ACTIVELY DISENGAGED customers are emotionally detached from a company and its products or services. They will readily switch brands. If switching is difficult or impossible, they may become virulently antagonistic toward the company. Either way, they are always eager to tell others exactly how they feel.
“Our data reveal that a customer who is fully engaged represents an average 23% premium in terms of share of wallet, profitability, revenue, and relationship growth compared with the average customer. In stark contrast, an actively disengaged customer represents a 13% discount in those same measures. In short, when customers believe they are getting more out of a business, they give more to it.” Susan Sorenson & Amy Adkins — Gallup business journal
Now we know that engaged customers represent an average of 36% in terms of share of wallet, profitability, revenue & relationship growth. This stands to showcase the importance of having customer engagement in the overall business strategy. And understanding your customers and their mediums will enable effective engagement, which will impact positively in the success of any business.
That’s it for Part 1 of ‘Aymen explains Customer Engagement’. In Part 2, I will dig deeper into the world of Digital Customer Engagement, and how the right customer engagement strategy can help boost sales conversion, increase loyalty, enhance brand awareness and reduce number of returns. But before we meet again, let me leave you with an statement from a customer when asked “What does being engaged with a provider of a product/services mean to you?”
“I want a company that is available However I need them, I want to write them a question on my messaging app, and ask for a call back, I want to be informed about developments that can benefit me personally, I don’t want to be bothered by news I can find on social media. I want a company that I can be proud of, and share my excitement about it on all my platforms. I want to be connected to my brand digitally, and want to easily manage my product and services as convenient as possible. I want a company that can support me 24/7, and be reachable on any channel I choose to use.” Your Customer