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Customer Engagement White Paper
 

Customer Engagement White Paper

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White paper I wrote on customer engagement

White paper I wrote on customer engagement

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    Customer Engagement White Paper Customer Engagement White Paper Document Transcript

    • The Pervasiveness of Engagement Embracing the American Idol Effect By Gary Druckenmiller, Vice President, Customer Engagement t is every marketer’s dream—and inevitable disappointment: A campaign breeds instant success. I Sales spike and profits climb. Then the campaign fades to silence, and sales just as swiftly slip back to baseline levels. The stellar campaign, seemingly forgotten, leaves no lasting lift for the brand, no boost in customer loyalty. The marketers, having hoped to gain new ground, instead managed only a holding action. So they marshal their budgets and regroup to ready their next campaign. In marketing, retaining customers has always been the hardest thing to do. And in the age of media fragmentation—as hundreds of TV channels and thousands of websites compete for audience attention—the traditional siege-mentality approach to marketing is giving way to a new paradigm known as engagement. This approach uses technology to establish and maintain continual connections and conversations with key constituents. It displaces traditional interrupt-and-repeat the traditional communications mediums, in favor of establishing and nurturing relationships with customers, selling channels, siege-mentality partners and other stakeholders. approach to The difference between traditional campaign-based marketing is marketing and engagement marketing is the difference between selling a product or service and making a customer giving way to a believe in it; between a one-off transaction and long-term loyalty; between shortsightedness and sustainability. You new paradigm might even say it’s the difference between a one-hit wonder like Vanilla Ice and a perennial hit maker like U2. The music business, despite its well-publicized woes, provides a great illustration of customer engagement’s potential. While CD sales are in a tailspin, traditional record retailers are shutting their doors, and as illegal file-swapping continues to erode profits, a massive customer-engagement campaign has produced a major exception to the overall industry downturn. This campaign is so hugely successful in its own right that it’s easy to forget what it is: The show-business juggernaut known as American Idol is, in a very real sense, a brilliant engagement campaign that’s highly effective at creating fans and inspiring them to buy music.
    • 2 Channel marketers and business-to-business “Engagement is communicators can benefit from study of American Idol’s embrace of interactive technology an estimate of the and its engagement-based approach to building brand loyalty. The American Idol brand is embodied in the stable degree and depth of artists it grooms (and whose recordings it ultimately releases), but the lessons apply to B2B brands as well, and of [website] are helpful in illustrating how engagement works. visitor interaction Roots in the Net against a clearly Customer engagement is a broad concept, with several overlapping definitions. We’ll examine them more closely in defined set of a bit, but all sources agree on one thing. Engagement first became possible thanks to the Internet. Before the Internet, goals.” all communications media were one-way streets. Radio, television, and print publications were (and still are) Web analytics guru effective at carrying messages to the multitudes who Eric T. Peterson consume them, but the net enabled something new. The multi-touch, interactive, customer-centric communication necessary for engagement marketing was inconceivable before the Internet. Spin-off technologies such as blogging, text messaging and social networking, and their extension beyond the desktop to gaming devices, iPods, smart phones and other mobile devices, extend the ubiquitous, unscripted potential of customer engagement still further. The very technologies that make engagement possible are also, paradoxically, more responsible than anything else for the radical changes in how many businesses address traditional marketing. The pervasiveness of the net, its capacity for continuous communication, and its support for personalized user experiences all helped diminish the effectiveness of traditional interrupt-and- repeat marketing and advertising. But, at the same time, the net allows companies to create and cultivate contact and conversation on multiple levels, building relationships with key constituents, and encouraging their ownership, and even participation in, the growth and evolution of a brand. It’s no coincidence, then, that the brilliant marketers behind American Idol succeeded in no small part by embracing the Internet, even as many of their old-school industry colleagues avoid it or accept it only grudgingly, with dread and disdain. MINTZ & HOKE COMMUNICATIONS GROUP | www.mintz-hoke.com
    • 3 The Internet is, of course, at the root of the record industry’s troubles. It upended traditional music-marketing methods by providing a much more eclectic outlet for new music than the traditional showcases of radio and MTV. It allowed music fans to hear songs they liked whenever they wanted to and buy only the songs they want, without having to defer to labels’ marketing muscle, program directors’ tastes, or deejays’ schedules. It gave listeners (and, eventually, viewers of videos) the freedom to skip songs they hated and repeat the ones they loved. And, of course, by enabling quick, easy digital-file sharing, the Internet subverted traditional music sales channels. While this was bad news for old-school music marketers, the architects of American Idol recognized it as an opportunity. They weren’t the first to do so, but they have arguably been more effective than anyone else at harnessing several of the Internet’s strengths: its ability to complement and reinforce traditional broadcast and print messaging; its ease at distributing and sharing entertainment content; and its ability to foster virtual community. The creators of AI dusted off the tried-and-true TV talent-show format and, by deftly pairing it with a website geared toward sharing videos and fan feedback, created a powerful platform for energizing and mobilizing music fans. The AI marketers may have never even heard the term “customer engagement,” but they are masters of it. So What is Engagement? Engagement has links to digital-marketing tools such as customer relationship management (CRM). It also embraces the cluster of community- and user-content-creation technologies known as Web 2.0. But it is distinct from both. Customer engagement is still evolving as a marketing discipline, and its definition depends, to a certain extent, on whom you ask. Here are a few of the most useful definitions: Theoretical. Perhaps the oldest (and most criticized) definition was offered up by the Advertising Research Foundation (ARF) in 2006: Engagement is turning on a prospect to a brand idea enhanced by the surrounding context. Executable. Marketing author Ron Shevlin, who agreed with many others that the ARF definition is too abstract, has gained currency with his alternate definition of engagement as “repeated, satisfied interactions that strengthen the emotional connection a customer has with the brand.” Measurement. Web analytics guru Eric T. Peterson offers a predictably metrics- focused definition, which underlies a mathematical model he’s devised for measuring engagement: “Engagement is an estimate of the degree and depth of [website] visitor interaction against a clearly defined set of goals.” MINTZ & HOKE COMMUNICATIONS GROUP | www.mintz-hoke.com
    • 4 All of these definitions are applicable. Shevlin’s has the advantage of being customer-focused and allowing for experiences both online and in the “real world.” Peterson’s is practical for many, but its omission of real-world experiences (such as gathering in the den to watch an American Idol broadcast) excludes some engagement experiences—albeit ones that are difficult or impossible to measure. While its definition may still be evolving, the concept of engagement has widespread recognition and acceptance. In a survey of more than 1,000 marketers, customer experience pros, and “digital experts,” the British research firm cScape found that more than 90% of respondents view online customer engagement as “essential” or “important” to their organizations’ success (2nd Annual Online Customer Engagement Report, cScape, 2008). The Degrees of Engagement Degrees of Low Medium High Highest Engagement Collaborative Content Adoption Social Filtering Creation Uploading (User Generated Rating, Voting, Bookmarking, Content), Blogging, Adding Friends, Commenting, Tagging, Adding to Fan Community Networking, Creating Endorsing, Fan Community Group Participation, Creating Favorites Mashups, Podcasting, Vlogging Research also indicates that businesses feel the need for a multi-channel approach—combining online and offline contact and communication—when engaging their customers. A good balance between online and offline experiences was voted “essential” or “very important” by 86% of organizations. Again, it is about engagement execution. Multi-Channel Meets Engagement Wikipedia.com talks liberally about an engagement typology championed by Wiredset CEO Mark Ghuneim. This measurement-centric model, which focuses on online activity only, describes a spectrum of engagement that ranges from low to high, depending on website visitors’ level of participation in, and emotional attachment to, the content of a site. As documented in the table above, Ghuneim characterizes passive content consumption and bookmarking as low-level engagement, and active community participation and content creation as high-level engagement. MINTZ & HOKE COMMUNICATIONS GROUP | www.mintz-hoke.com
    • 5 By all accounts, American Idol falls squarely in Ghuneim’s highest-engagement column: The AI website enjoys tremendous levels of repeat traffic and community involvement; homemade videos of fans singing AI stars’ songs are widespread on YouTube, as are “mashup” videos spoofing some of the infamous AI also-rans. Fans even devote blogs and personal sites to contestants’ hairstyles. Don’t forget, however, that the American Idol engagement engine works offline as well as online, encompassing traditional advertising (TV Guide, network and MTV spots), public relations (contestants on E! and Access Hollywood), and even arguably, “real-world community” gatherings on living room couches and around office water coolers. The integration and reinforcement of the AI online and offline experiences play a huge role in instilling AI audience members with a rooting interest in its contestants—and, ultimately, in a willingness to support the winners by buying up their CDs as soon as they’re pressed. Complementary online and offline engagement activities are something every marketer should aspire to. Engagement Without the Hits Of course, there is no slam-dunk to engagement superiority, and few audiences are as receptive to full-bore engagement as plugged-in teen and tween females, eager to swoon over David Cook or idolize Carrie Underwood. In the business world, particularly B2B, the game is different, but there are still numerous lessons to be learned from American Idol that can be executed today. Any engagement strategy must be fitted to and grounded against your business and your audience(s). One good starting point is to address and facilitate such universal— and critical—audience behaviors as repeat business (loyalty), complaint management, satisfaction, word-of-mouth, lead generation, and net new sales. Look at your existing processes for handling these activities, and think about ways that instant communication, information sharing, and community building—among your employees, between employees and customers, or among customers themselves—could improve the audience experience. If you are not applying interactive technology toward these areas, engagement is not the priority it should be for you. Building off Ghuneim’s engagement spectrum, following are three high-level customer-engagement models that characterize monthly activities an organization or department might pursue over the course of six months as part of an engagement strategy. MINTZ & HOKE COMMUNICATIONS GROUP | www.mintz-hoke.com
    • 6 Business Engagement Model #1: Low to Medium Awareness Conversion Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 PR/ Guerilla PRESS RELEASE PRESS RELEASE PRESS RELEASE PRESS RELEASE PRESS RELEASE PRESS RELEASE Advertising OFFLINE N/A OFFLINE N/A OFFLINE N/A LANDING PAGE/ LANDING PAGE/ LANDING PAGE/ LANDING PAGE/ LANDING PAGE/ LANDING PAGE/ Web REGISTER REGISTER REGISTER REGISTER REGISTER REGISTER Email BLAST BLAST BLAST BLAST BLAST BLAST E-marketing SEARCH SEARCH SEARCH SEARCH SEARCH SEARCH Web X.0 RSS RSS RSS RSS RSS RSS Model #1 is intentionally simple and achieves only what Ghuneim would consider a low-to-medium level of engagement. It combines traditional offline advertising and regular public relations outreach with the use of the two most basic engagement tools, email promotion and paid search, and calls for a website that captures registered-user data and allows visitors to subscribe to receive new content via RSS syndication. This should be considered a bare-minimum level of engagement activity, but may represent a critical first step for organizations that currently have no efforts in place at all. The best marketers look at an engagement strategy as being migratory in nature. Lessons learned are constantly reworked and recast. In-depth involvement and rigorous mapping are no longer just personal requirements, they’re corporate mandates. MINTZ & HOKE COMMUNICATIONS GROUP | www.mintz-hoke.com
    • 7 Business Engagement Model #2: Medium to High Awareness Conversion Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 VIRAL VIDEO/ PRESS RELEASE/ VIRAL VIDEO/ PRESS RELEASE/ PR/Guerilla WHITE PAPERS WHITE PAPERS PODCAST PODCAST PODCAST PODCAST Advertising OFFLINE OFFLINE OFFLINE/ONLINE ONLINE ONLINE ONLINE LANDING PAGE/ LANDINGPAGE/ LANDING PAGE/ LANDING PAGE/ LANDING PAGE/ LANDINGPAGE/ Web REGISTER/ REGISTER/ REGISTER/ REGISTER REGISTER REGISTER DOWNLOADS DOWNLOADS DOWNLOADS Email SEGMENTED SEGMENTED SEGMENTED SEGMENTED SEGMENTED SEGMENTED LEAD GEN, LEAD GEN, LEAD GEN, AFFINITY AFFINITY AFFINITY E-marketing PROMOS PROMOS PROMOS PROGRAMS PROGRAMS PROGRAMS Web X.0 UGC, BLOGS UGC, BLOGS UGC, BLOGS MASHUPS MASHUPS MASHUPS Engagement Model #2 offers a richer mix of online and offline activities, including some tactical variation to keep the audience interested. This represents a level of activity that is adequate for most of today’s B2B organizations, and represents a realistic step forward for B2B and B2C operations currently doing the bare minimum. “Upgrades” from Model #1 include adoption of segmented, targeted email programs and the adoption of customer and channel affinity programs. The “Web X.0” row refers to support for user-generated content (UGC) which can range from blog comments to “mashups” involving recombination of multimedia; the nature of suitable UGC will vary by organization. With crisp execution, this mix of activities can achieve what Ghuneim characterizes as a high level of engagement. MINTZ & HOKE COMMUNICATIONS GROUP | www.mintz-hoke.com
    • 8 Business Engagement Model #3: High to Highest Awareness Conversion Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 PR/Guerilla SOCIAL MEDIA P2P SOCIAL MEDIA P2P/STREET TEAMS P2P P2P/STREET TEAMS ONLINE ONLINE ONLINE ONLINE ONLINE ONLINE Advertising CONTEXTUAL/ CONTEXTUAL/ CONTEXTUAL/ BEHAVIORAL/ BEHAVIORAL/ BEHAVIORAL/ LOCAL NATIONAL LOCAL NATIONAL LOCAL NATIONAL MICROSITE/ MICROSITE/ MICROSITE/ MICROSITE/ MICROSITE/ MICROSITE/ Web WIDGETS/GAMING WIDGETS/GAMING WIDGETS/GAMING WIDGETS WIDGETS WIDGETS PODCAST LIBRARY PODCAST LIBRARY PODCAST LIBRARY 100% 100% 100% 100% 100% 100% Email AUTOMATED AUTOMATED AUTOMATED AUTOMATED AUTOMATED AUTOMATED WEBISODE, WEBISODE, WEBISODE, E-marketing WEBISODES WEBISODE WEBISODE CONTESTS CONTESTS CONTESTS SOCIAL SOCIAL SOCIAL iPHONE APP, iPHONE APP, iPHONE APP, Web X.0 SOCIAL PROFILES SOCIAL PROFILES SOCIAL PROFILES PROFILES PROFILES PROFILES Model #3 represents a highly evolved, deep engagement program that applies a wide range of tactics to engage audiences on every level, across a wide array of technology platforms. It’s presented as an ideal vision of what’s possible. While some of these activities may seem out of the realm of the B2B space, B2B marketers should pay attention to the “cutting edge” of engagement technology, because tamer applications of those tools are already in market and likely to be fluid and highly applicable to B2B within a few years. Start slow, use search and email as the well known catalysts to engagement that they are, and interact long term with a progression toward something more interoperable. The one and done blockbuster advertising campaign days are over and do nothing but waste your money and raise questions on your decision making ability. As we can see from these examples, engagement is a multi-faceted, multi-channel and multi-tiered evolving communication approach. It’s not just blogs, or wikis, or Twitter. And it’s definitely not just “search.” It is a customized, multi-touch communications portfolio that encompasses all these things and more. MINTZ & HOKE COMMUNICATIONS GROUP | www.mintz-hoke.com
    • 9 Taking Measure Forrester Research noted in a recent study that “Marketers must wrestle down the numerous data sources to capture the presence, value, impact, and degree of customer interactions across channels.” No engagement effort is complete without data analysis to determine how well it’s doing. There is no shortage of potential metrics (and influences willing to track and analyze them for you), but sticking to the basics is a smart first step. Ask the following basic questions, and make sure your measurement mapping methodology can answer them: • Which types of information is your audience consuming, online and offline? Which content is being viewed, requested, and used, and which is ignored? Does the information that’s getting used reflect your messaging? • How often do you have contact with members of your audience? When, and for how long? How often do they return for more information? How is your audience talking about you and your brand? Obtain baseline answers to these questions, define specific time intervals for evaluation (90 days is good for a start), but get data in monthly chunks. Monitor these items closely and adjust content type and frequency of new offerings as needed to keep audiences satisfied. Making Engagement a Communications Mandate We talked a lot about some of the more subjective thoughts and points associated with engagement. In the end, there are a handful of things you must do in order to instill this mindset into your business. • Map a plan that identifies where your engagement budget will be best spent and align it with the proper set of customers, their touch points, and the degree of engagement you seek for them. Remember, it’s not about you, it’s about them. • Use understanding of audience engagement levels to bring clarity to lead generation, track the effectiveness of higher level engagement in converting long- term prospects to customers, and institutionalize this as both a business and cultural must-have. • Identify and measure the engagement activities that foster customer loyalty and expand their use and/or apply them to new audiences. • Monitor engagement on an ongoing basis to analyze long-term and continuous customer behavior and expect to make adjustments as needed. MINTZ & HOKE COMMUNICATIONS GROUP | www.mintz-hoke.com
    • 10 American Idol has proven in this technology age that engagement as a business philosophy is beyond real, it’s alive. It’s a science. And it works. It really works. The fundamentals of pulling this all off for AI are daunting, but for most businesses, as we’ve noted, it could be as simple as a three or four step process with a conversion point of X. And “X” does not necessarily constitute a sale. American Idol has approximately 20 different conversion points, all working simultaneously over a one-year period (which we see compressed in half a year). The average small to mid-sized business may have only a couple. And that’s OK. No one expects you to be the next American Idol. Mintz & Hoke is a full service, marketing communications group that develops and implements integrated programs that nurture, defend, 40 Tower Lane motivate and glorify brands throughout distribution channels and at every Avon, Connecticut stage of the selling cycle. We call our approach business-to-channel 860.678.0473 communications—it’s all about helping clients make the complex sale happen. Mintz & Hoke Communications Group, help clients win. MINTZ & HOKE COMMUNICATIONS GROUP | www.mintz-hoke.com