Increasing Customer Engagement

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Increasing Customer Engagement

Increasing Customer Engagement

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  • 1. I D C A N A L Y S T C O N N E C T I O N Michael Fauscette Group Vice President, Software Business SolutionsIncreasing Customer EngagementDecember 2012The Internet, enabled by the proliferation of mobile devices, offers new ways of sharing andcommunicating in real time through social networks and social media. New technology is creatingtech-savvy, "social" customers that expect brands to engage, interact, and provide a complete,positive customer experience at every touch point. To engage and service these new prospects andcustomers, companies need to build a comprehensive customer experience strategy. A key part ofthat strategy is providing and facilitating a community where customers can share and interact withthe brand and with each other. Community management software to enable these communities isincreasingly important as a part of the brands customer experience strategy. Companies can provideinformation about products and services, facilitate peer-to-peer interaction and support, nurtureinfluencers to encourage word-of-mouth marketing, and even get feedback about the kinds ofproducts and services that customers are really looking for. In this context, companies need toformulate a high-level customer experience strategy that includes branded communities thatencourage customers to join and to interact and engage with the brand and with each other.The following questions were posed by Get Satisfaction to Michael Fauscette, group vice president ofIDCs Software Business Solutions, on behalf of Get Satisfactions customers.Q. What are the top trends in customer experience, and how do you distinguish between customer experience as a business strategy and the technology that helps support it?A. Refocusing businesses on building a comprehensive customer experience strategy is growing out of a need to change the way companies engage with customers and deal with the new expectations of tech-savvy, "social" customers. Its important to understand the kind of change thats happened to the way people want to interact with each other and with companies, brought about by the ubiquitous hyperconnectivity created by the Internet and the subsequent growth of the social Web. With the consumerization of IT and the rise of the social Web, the way people interact online has changed dramatically, and we see this trend creating customers that want to interact with companies in a more personal, conversational way. Given this reality, companies are recognizing the need to formulate a high-level business strategy that provides a positive experience at every touch point in the customer life cycle and encourages customers to join, interact, and engage with the brand. Strategy has to be actionable, however, and processes and systems must be changed to meet those customer experience goals. A customer experience strategy involves all employees and every business process, but several obvious customer and prospect touch points are very high priority as a company builds out systems and processes to meet the customer experience strategic objectives. Sales, marketing, and customer service processes in particular are critical in providing a comprehensive customer experience. There are a number of different opportunities for improving the customer experience, such as tying yourIDC 1429
  • 2. customer service system into some of the new social network channels, enabling you to identify customer issues and head them off in a scalable, systematic way that might not have been possible in the past. Another could involve building a customer community that changes the way customers engage with the company and each other. Customer communities are built and managed through a technology platform that allows you to effectively manage how customers interact with each other and the brand, providing a very powerful tool for supporting the overall customer experience strategy.Q. What is the role of customer communities in increasing customer engagement?A. Customer communities play several different roles with respect to a customer engagement strategy. These communities offer peer-to-peer activity where customers can have conversations, share information and tips and tricks, as well as help head off product problems. Theres a lot of value in enabling customers to have conversations with each other or with a particular company given their motivation to talk about products or services. If customers care about a brand and want to be engaged with it, participation levels can be really high. From a company perspective, customer communities also offer a great way to find, nurture, and leverage influencers and connect them to prospects that are evaluating products. Nothing sells better than word-of-mouth marketing from customers that are already using a companys products. Benefits for customers also need to be considered. Customers can get support information, find answers to problems, or just answer "how to" questions. The community provides a frictionless way for customers to find information and share knowledge. This also reduces the support workload and service cost for the company because customers answer a lot of low-level questions for each other, which deflects a certain number of customer support calls and adds to the companys knowledge base. In fact, answers in the community create a social knowledge base that ensures that useful information becomes available to all customers and prospects that may have similar questions. This can lower support call volumes, freeing up customer service staff to focus on more challenging problems and concerns. In sum, communities increase engagement, improve customer satisfaction, and provide value to both customers and the company.Q. What are the benefits of customer communities as a part of the customer experience strategy?A. Customers are brought into an environment where companies can monitor activity to improve the customer experience and facilitate peer-to-peer support. Through these transactions, both companies and their customers gain access to content that they wouldnt have otherwise. Getting customer input about a product has great value for innovation because theres a feedback cycle created about problems, product use, and the kinds of products and services customers are really looking for. A customer community is an excellent place to solicit product feedback and gauge the level of interest by seeing how many other customers like certain features and vote up product ideas. Sharing the "voice of the customer" across the whole business has lots of downstream value for the company and ultimately for the customer. Customer-generated information can be tied into the companys enterprise social network to give product designers access to previously unavailable ideas and information, for example. The opportunity to tie customers directly into a companys innovation process can produce dramatic results. There is also the opportunity to influence the buying decision when prospects are exposed to a community thats really active and can help them better understand the value proposition for the product or service. From a marketing perspective, nothing is more valuable than word-of-mouth marketing. A community that facilitates influencers to become more engaged 2 ©2012 IDC
  • 3. and share their experiences with prospects offers a great opportunity to accelerate customer acquisition and revenue for the company.Q. What are the barriers to adoption for these technologies in todays business environments?A. Getting a critical mass of customers to participate is a key challenge. But this is kind of a double-edged sword. You have to get the customers into the community for it to be valuable, and yet for the community to be valuable, you have to have enough customers in it. To draw customers in, companies need to provide customers with a sense of what the value is in exchange for their participation. Companies have to ensure that they are delivering value in an ongoing way so that customers engage, derive personal benefits, and keep coming back. Once customers are engaged in the community, the network effect really helps to continue the growth of the community. Active community management is really important to helping companies accomplish these goals. Successful communities have a very active management philosophy. They are likely to have one or more community managers, depending on the size of the company and the community. To help keep the community vibrant and interesting, community managers have specific roles, such as looking at analytics, finding influencers, getting a jump on problems, and helping customers navigate and better understand how the social network environment works. The value of the community is about making connections. Companies have to facilitate those connections by using the right technology platform and community management strategy and by getting experienced and knowledgeable community managers on board.Q. What are the key considerations in selecting a customer community platform?A. The first consideration is to understand your requirements and be clear about what youre trying to accomplish from both a technology perspective and a strategy perspective. That means laying out what outcomes youre looking for and using best practices to select a technology partner. Its important to look for a partner with depth of experience, financial stability, and solid customer references. The vendor should also offer client services capability to help customers understand how to manage and optimally implement communities. Its also important to look carefully at the platforms ability to connect to other systems. For example, it might be advisable to integrate a community platform into an existing CRM system as well as the internal enterprise social network. That kind of integration has to be accomplished easily and without a lot of additional expense. We also advise evaluating the platforms capabilities for embedding into the companys other Web properties for greater exposure and a better experience. Additionally, you want a platform that offers added value quickly. The days of 36-month implementations for IT projects are over, so speed and ease of implementation are important. A B O U T T H I S A N A L Y S T Michael Fauscette leads IDCs Software Business Solutions group, which encompasses research and consulting in enterprise software applications, including ERP, SCM, CRM, PLM, collaboration, and social applications; software partner and alliance ecosystems; open source software; software vendor business models; SaaS and cloud computing; and software pricing and licensing. He also provides thought leadership in the area of social applications and the transition to the social business.©2012 IDC 3
  • 4. A B O U T T H I S P U B L I C A T I O NThis publication was produced by IDC Go-to-Market Services. The opinion, analysis, and research results presented hereinare drawn from more detailed research and analysis independently conducted and published by IDC, unless specific vendorsponsorship is noted. IDC Go-to-Market Services makes IDC content available in a wide range of formats for distribution byvarious companies. A license to distribute IDC content does not imply endorsement of or opinion about the licensee.C O P Y R I G H T A N D R E S T R I C T I O N SAny IDC information or reference to IDC that is to be used in advertising, press releases, or promotional materials requiresprior written approval from IDC. For permission requests, contact the GMS information line at 508-988-7610 or gms@idc.com.Translation and/or localization of this document requires an additional license from IDC.For more information on IDC, visit www.idc.com. For more information on IDC GMS, visit www.idc.com/gms.Global Headquarters: 5 Speen Street Framingham, MA 01701 USA P.508.872.8200 F.508.935.4015 www.idc.com 4 ©2012 IDC