3rd Annual Online Customer Engagement Survey Report 2009

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Survey results, analysis, commentary and analysis from over 1000 participants of the 2009 Online Customer Engagement survey. Brought to you by Econsultancy and the cScape Customer Engagement Unit.

Survey results, analysis, commentary and analysis from over 1000 participants of the 2009 Online Customer Engagement survey. Brought to you by Econsultancy and the cScape Customer Engagement Unit.

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  • 1. 3rd Annual Online Customer Engagement Survey Report 2009
  • 2. 3rd Annual Online Customer Engagement Survey Report 2009
  • 3. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Those organisations able to grasp the changes in our customers’ behaviour and psychology, while placing an emphasis on delivering increased value, will be able to reap the rewards of customer engagement. Introduction Welcome to this, the Third Annual Online This year’s report provides insights into the So what is the role for customer engagement psychology, and ultimately their behavioural Customer Engagement Survey Report. way companies and agencies are continuing within this climate? patterns. For example, in previous economic If we assume This year the survey was translated into four to use the online space to develop stronger and downturns escapism made the cinema, that sensitivity to To effectively engage we must endeavour to different languages and attracted the largest more intimate bonds between our organisations gambling and cosmetics relatively ‘recession price is the sole, understand and provide relevance and this number of participants ever with nearly 1300 and our customers. A year ago we might or indeed the proof ’. Will they continue to be or will companies and supplier agencies taking the all have accurately predicted that email year’s report provides insights into how we most important are targeting and segmenting our customers, alternative forms of escapism predominate? survey. This makes it the biggest survey of newsletters would remain a staple technique motivating quality, What role will the expanding secondhand as well as what methods we are using to learn its type anywhere in the world. for improving online customer engagement, we will have market online play and how can we take how our customers are changing in this new but far fewer might have predicted that 13% missed the more advantage of this? As tightened purse strings Half of you now classify customer engagement world. of companies would look to be investing in subtle interaction encourage conservative purchasing how will as essential to your organisation and your micro-blogging utilities like Twitter. between the Nearly 50% of you recognise that sensitivity a recessionary focus on the family unit express answers indicate that an increasingly changing economic to price will be a key customer behaviour itself online? large number of you understand customer There have been a number of constants across environment and engagement as an activity that delivers value the years that the survey has been running but in the coming year. But if we assume that our customer’s it is the sole, or indeed the most important In our First Online Customer Engagement to both customers and businesses. After all this report is published into a very different psychology. Report published in 2006 I made the point that this is the defining feature of engagement, its world than the previous ones. The shadow motivating quality, we will have missed the “customer engagement is the best measure of true value lies in the development of mutually of a credit crunch in 2007/2008 has already more subtle interaction between the changing current and future performance; an engaged beneficial relationships. turned into full blown recession in some economic environment and our customer’s relationship is probably the only guarantee countries and the impact of international for a return on your organisations’ or your economic woes are predicted to reach well into clients’ objectives”. I still hold this to be true. the next decade. The instability that the market Indeed in a troubled economy the emphasis economy creates for all organisations means on engagement is one of the few activities that it is increasingly difficult to think beyond that can deliver value to both customer and the short term and even the best laid business business alike, over both the short and the plans can be unhinged at a moment’s notice. long term. 4
  • 4. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 E-consultancy is the leading source of In addition, we host more than 100 events cScape, the research sponsor, is an award- agencies alike. cScape continues to be at independent advice and insight on digital a year, such as The Online Marketing winning interactive agency and a certified the forefront of developing the concept of marketing and ecommerce. Masterclass, regular Supplier Showcases and Microsoft Gold Partner. An emphasis on engagement, with the book Winners and Losers Roundtables, an annual Future of Digital customer engagement underpins cScape’s in a Troubled Economy; how to engage customers Their reports, events, online resources and Marketing event, Digital Cream and a range of integrated consultancy, creative design and online to gain competitive advantage published training programmes help a community social events. technical development services. in early 2008 and a continual programme of of over 75,000 registered marketers make thought leadership events which have informed better decisions, build business cases, find the The E-consultancy site now attracts The cScape Customer Engagement Unit professional and informal online debates about best suppliers, look smart in meetings and 175,000 unique users per month where they (CEU), launched in November 2006, is a team engagement and persuasive design. accelerate their careers. access research, read the blog and take of individuals with decades of experience in part in discussions in the forums. And as a digital marketing and communications, design cScape is also a Microsoft SharePoint Server E-consultancy is an award-winning online portal to the digital marketing community, and technology development. 2007 (MOSS) Centre of Excellence and has an publisher of reports covering best practice, E-consultancy members can also link up with award-winning design team. user experience benchmarking, market data other members and digital suppliers through cScape combines in-depth research into the and supplier selection aimed at internet our directories, as well as find a new job or science of persuasion with the development We have an exciting programme of events professionals that want practical advice on all new digital talent using the job listings. of practical online engagement strategies. Our planned for 2009 and hope you will be able to aspects of e-business. priority is to enable clients to align business come along. Please contact Sarah Woodbridge Some of E-consultancy’s client-side members goals with the needs and interests of their to find out more about events, the Customer E-consultancy also operates a highly popular include: Google, Yahoo, MSN, MySpace, BBC, customers. cScape works with a diverse range Engagement Unit and cScape’s other services training division, used by some of the world’s BT, Shell, Vodafone, Yell.com, Dell, Oxfam, of organisations from the corporate, charity (s.woodbridge@cscape.com +44 (0)20 7689 most prominent brands for staff education, Virgin Atlantic, TUI, Barclays, Carphone and government sectors. 8800). both in-house and via public courses. We Warehouse, IPC Media, Deloitte and Touche, provide training across all areas of digital T-Mobile and Estée Lauder. The CEU has continued to grow over the last marketing and at all levels from one day year and has now developed an international courses to diplomas to Masters in Digital Join E-consultancy today to learn what’s base of partners. This allows the CEU to Find out more about cScape Marketing. happening in digital marketing – and what provide wider services to global companies, cscape.com works. many of whom have contributed to the success Join the debate of the survey this year. customer-engagement-network.com Call us to find out more on +44 (0)20 7681 4052 or contact us online. Since the launch of the CEU and the world’s First Annual Online Customer Engagement e-consultancy.com Survey, the idea of customer engagement has been widely adopted by companies and 2
  • 5. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 3rd Annual Online Customer Engagement Report 2009 Introduction 4 Comments on the findings Executive summary and highlights 7 Andy Beal – Customer engagement takes center stage in economic 13 downturn Methodology and sample 9 Jim Sterne – Online marketing working. Senior managers sleeping 14 Findings 12 Pete Mortensen – When the customer talks back 15 Customer engagement strategy 12 Ian Jindal – Sustaining profitability in a challenging retail climate 16 Importance of customer engagement 12 Martha Russell – Engagement pinball 17 Do you have a defined customer engagement strategy? 13 Eric Peterson – We (still) need a standard measure for engagement, 19 Interest in customer engagement 14 perhaps more than ever! Behaviour of an engaged customer 16 Becky Carroll – Creating customer engagement on their turf 25 Mapping customer experiences 18 Matthew Bailey – Striking a balance 26 Customer engagement and the troubled economy 18 Stéphane Hamel – When engagements rhymes with commitment 27 Impact of the economic downturn 18 Alex Smith – Invest in the right blend 29 Customer data collection 20 Thoughts on customer engagement Changing customer behaviour and attitudes 21 Lucy Conlan – Tread carefully – the customer is not always right 32 Tactics and Initiatives 22 Clare O’Brien – It’s a meatball sundae Jim, but not as we know it 34 Ways of improving engagement and areas of investment 22 Hugh Gage – Meeting expectations is the first step to engaging 36 Areas of increased interest 22 with your customers Mobile marketing to enhance customer engagement 24 David Dodd – Can rich content mean rich customer experience? 38 Segmentation of audience to identify quality customers 24 Richard Sedley – Can I tell you a story? 40 Issues around customer engagement and key principles 26 Amanda Davie – But I still haven’t found what I’m looking for 40 Barriers to better online customer engagement 26 Lynda Rathbone – Oh the humanity! 43 Key principles of customer engagement 28 Dave Chaffey – Learning to slice and dice 44 Migration of marketing budgets 29 Survey partners 48 3
  • 6. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Those organisations able to grasp the changes It just remains for me to thank all those who in our customers’ behaviour and psychology, made this the most successful survey to date. while placing an emphasis on delivering Thanks to everyone who participated. To Linus increased value, will be able to reap the and Aliya at E-consultancy. To our partners rewards of customer engagement and will who promoted the survey around the globe: be best placed to emerge winners from the Patrick, Lance, BJ, Ria, Theo and Anne- current economic situation, those that can’t Kathrine. To our contributors: Amanda, Jim, have a lot to lose. Andy, Pete, Clare, Alex, David, Hugh, Dave, Becky, Ian, Eric, Lynda, Stéphane, Matthew and Martha. And finally to my colleagues at cScape: Sarah W, Magda, Sarah B, Tom, Steven, Lucy, Theresa and Rob. We hope you find the Third Annual Customer “Why the focus on customer Engagement Report interesting and useful and satisfaction and not sales?” that you’ll share your thoughts on its content. Andy Beal, p13 Richard Sedley cScape Customer Engagement Director r.sedley@cscape.com 5
  • 7. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Executive summary and highlights 6
  • 8. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Executive summary and highlights The Third Annual Online Customer Customer engagement is also widely seen Despite the relative novelty of micro-blogging Engagement Report is based on a survey of as a way of deepening and enriching a product utilities such as Twitter, it is interesting to note 1,291 respondents carried out in September or service offering and a method for gaining that 7% of companies say they have improved Customer engagement and October 2008. customer insight. their customer engagement through this channel. is widely seen as a way Whilst the importance of customer At a time of economic crisis, organisations of deepening and enriching engagement is widely acknowledged, the need to be clear about how customers are Despite the growing importance of customer research found that fewer than half of modifying their behaviour and how this could empowerment, only 13% cite participation a product or service offering organisations (42%) have a defined customer impact them. in innovation and design as an important and a method for gaining engagement strategy in place. customer attribute. customer insight. Sensitivity to price is the type of customer It is clear that whilst companies understand behaviour which responding organisations feel Only 5% of companies have a customer that customer engagement is important, that they will most likely need to address over engagement strategy which embraces the many are still unsure about how to implement the next 12 months. Nearly half of companies mobile channel. a coherent and practical plan of attack. surveyed (48%) said that this would be a Tellingly, less than half of respondents (41%) behavioural trait which was significant for them Lack of resources continues to be a major said that the deteriorating economic climate next year. barrier to successful customer engagement, had resulted in a greater focus on customer although encouragingly, slightly fewer companies now find this to be a major problem engagement. Other report highlights compared to last year (52% compared to 60% The essence of customer engagement is seen Email newsletters are the tactic most likely in last year’s survey). as being about creating relationships which to have driven a tangible improvement result in value both for customers and for in customer engagement, with 59% of Just under a third of companies (31%) organisations. Asked about their organisation’s respondents saying that their organisations say that problems with technology are interest in online customer engagement, will increase their spending in this area. a significant barrier to cultivating better 38% of respondents said that it was about customer engagement. Areas associated with Web 2.0 and social increasing long-term customer value while 34% media such as user ratings & feedback (41%), said that it was about increasing value delivered user-generated content (37%), blogging (36%) to the customer. and brand presence on social networks (36%) are also expected to attract significant sums of investment even though it is not always easy to track return on investment (ROI) in some of these areas. 7
  • 9. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 The value of the survey In a time when the internet is rapidly taking There is a whole range of possibilities to “It’s time to rally the troops and bring over traditional media, there is no question that engage your audience online. From social online customer engagement is essential. Over networks to user generated content to rapidly the fight to the C-Suites.” the past few years, cScape has taken great expanding mobile technologies, there are Jim Sterne, p14 strides towards becoming thought leaders in more and more ways to reach your customers. the field of engagement, helping companies of Many of these are still largely untapped, and all sizes recognise and understand the benefits are perfect opportunities to invest in for a of online customer engagement to their long-term competitive advantage. business. The most valuable customers you can have Over the past three years the Annual Online are those who know you have made an effort Customer Engagement Survey has shown to speak to them directly, and will happily that recognition of customer engagement has recommend your product/service to their been rising steadily. In this current economic friends, colleagues and family. climate, companies are finding that their online strategy will be vital in keeping their customers engaged. Increasing long-term customer Scott Dodds value and providing them with quality rather General Manager Small and Midmarket Solutions than quantity will be of highest importance. and Partners Group Finding a way to speak to your customers Microsoft on a more individual level will mean greater satisfaction and loyalty. Methodology and sample 8
  • 10. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Methodology and sample Methodology Geography Figure 2 Company (client-side or in-house): Almost 1,300 respondents took part in an The geographical spread of respondents is In which country/region are you based? online survey1 over a five-week period in shown in Figure 2 and Figure 3 (right). More Base – all client-side respondents September and October 2008. than two thirds of company respondents (71%) are UK- based. UK: 70.91% (273) Survey participants came from E-consultancy’s Europe (outside UK): 9.61% (37) user base, through our network of partners, The agency sample is slightly more global, North America: 9.61% (37) clients and agencies and via promotion across with 37% of these respondents based a range of social media. outside the UK. The survey was available in China: 1.04% (4) four languages: English, Spanish, Greek and Other: 8.83% (34) The majority of respondents are based in Chinese; in an attempt to make this research the UK although there are also significant as global as possible. numbers of respondents from the United States, the rest of Europe and beyond. Respondent profiles The vast majority of survey respondents Figure 1 Figure 3 work either for in-house teams (i.e. client-side What type of organisation do you work for? Agency (including consultants and technology suppliers): organisations), or for external agencies Base – all respondents (1291) In which country/region are you based? (including consultants and technology Base – all agency respondents suppliers). Part of an in-house team (client-side): 44.54% (575) UK: 63.05% (256) For the purposes of this report, we have External agency / supplier / consultant: 45.39% (586) Europe (outside UK): 11.08% (45) carried out separate analysis for both these Other: 10.07% (130) North America: 14.53% (59) groups and the distinction is abbreviated China: 0.99% (4) to company (including not-for-profit organisations) and agency. Other: 10.34% (42) In total, 575 company respondents took part in the survey, compared to 586 agency participants. Company respondents were asked to comment in respect of their own organisations, while agencies were asked to comment in terms of a typical client. 1 E-consultancy uses Clicktools for its online surveys. 9
  • 11. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Company turnover Figure 4 Figure 6 Company: What is your annual company turnover? All respondents: In which business sector is your organisation? Figure 4 shows the range in the size of participating organisations, as defined by Under £1 million: 11.08% (42) 20 A company turnover. Approximately a third of £1 -£10 million: 17.68% (67) respondents (29%) work for companies with Ch annual revenues of £10 million or less. £10-£50 million: 12.40% (47) £50-£150 million: 9.23% (35) Co 39% of those companies taking part have >£150 million: 29.55% (112) a turnover of more than £50 million, of Not relevant / don’t know: 20.05% (76) 15 En whom nearly a third of respondents work for companies with a turnover in excess of Fi £150 million. FM Agency respondents typically work for smaller G 10 organisations, with 45% of them representing agencies with a turnover below £1 million H [Figure 5]. 20 Automotive: 1.30% (5) Ph Charity: 5.71%(22) Figure 5 5 Consultancy / Marketing Services: 3.64% (14) Pr Business sector Agency: What is your annual company turnover? 15 Entertainment: 5.19% (20) Pu Financial services: 15.06% (58) The best represented sectors are financial Pu FMCG / CPG: 1.56% (6) services, retail, travel and publishing [Figure 6]. Under £1 million: 45.14% (181) 10 Gaming: 0.26% (1) £1 -£10 million: 29.93% (120) Re 0 Healthcare: 1.56% (6) £10-£50 million: 8.23% (33) Pharmaceuticals: 0.52% (2) Te £50-£150 million: 2.74% (11) 20 5 Automotive: 1.30% (5) Property: 0.52% (2) >£150 million: 4.74% (19) Charity: 5.71%(22) Public Sector: 5.71% (22) Tr Not relevant / don’t know: 9.23% (37) Publishing: 8.83% (34) Consultancy / Marketing Services: 3.64% (14) U 15 Entertainment: 5.19% (20) Retail: 12.99% (50) 0 Financial services: 15.06% (58) Telecoms / mobile phones: 4.16% (16) O FMCG / CPG: 1.56% (6) Travel: 9.35% (36) 10 Gaming: 0.26% (1) Utilities & Energy: 1.30% (5) O Healthcare: 1.56% (6) Other manufacturing: 3.38% (13) Pharmaceuticals: 0.52% (2) Other: 18.96% (73) 5 Property: 0.52% (2) Public Sector: 5.71% (22) Publishing: 8.83% (34) Retail: 12.99% (50) 0 Telecoms / mobile phones: 4.16% (16) Travel: 9.35% (36) 10 Utilities & Energy: 1.30% (5) Other manufacturing: 3.38% (13)
  • 12. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Findings 11
  • 13. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Findings Customer engagement strategy Figure 7 The overwhelming majority of client-side Company: How important is customer engagement to your organisation? (2008) respondents say that customer engagement Importance of customer engagement is important (35%) or essential (52%) to their Figure 7 shows that customer engagement continues to be of key importance, with Essential: 52.27% (242) organisations. slightly more respondents saying that it is Important: 34.77% (161) essential than last year. The overwhelming Nice-to-have: 11.45% (53) majority of client-side respondents say that Not important: 1.30% (6) From the agency perspective, approximately customer engagement is important (35%) or Don’t know / not relevant: 0.22% (1) essential (52%) to their organisations. 84% of agencies (compared to 82% last year) Only 1% of respondents feel that it is not feel that customer engagement is essential or important, reflecting the growing shift important. towards putting the customer at the heart of business strategy. From the agency perspective, approximately 84% of agencies (compared to 82% last year) Do you have a defined customer feel that customer engagement is essential engagement strategy? Figure 8 or important, emphasising the underlying message that customer engagement Agency: Typically, how important is online customer Whilst the importance of customer engagement for your clients? engagement is widely acknowledged, continues to be a critical component of organisational strategy. less than half of organisations (42%) have Essential: 43.27% (196) a defined customer engagement strategy in Important: 40.62% (184) place. It is clear that whilst brands understand Nice-to-have: 13.47% (61) that customer engagement is important, many companies are still unsure about how Not important: 2.21% (10) to implement a coherent and practical plan Don’t know / Not relevant: 0.44% (2) of attack. From the agency point of view, fewer than a third (just 26%) say that their clients have what they would call a defined customer engagement strategy in place, suggesting a difference of opinion between companies and agencies about what constitutes a defined strategy in this area. 12
  • 14. COMMENT Andy Beal Customer engagement takes center stage Figure 9 in economic downturn Company: Does your organisation have a defined customer engagement strategy? Over the last 12 months, a lack of budget and time (45%) was cited as the biggest barrier to starting a customer engagement campaign. Ironically, as budgets have tightened further – ahead of tougher Yes: 42.30% (195) economic times – those same businesses are increasing their focus in No: 51.41% (237) this area, with 41% naming the worsening economy as the catalyst for Don’t know / not relevant: 6.29% (29) spending more resources on customer engagement. Less than half of organisations It is worth noting exactly which channels businesses have the most (42%) have a faith in to help them achieve their customer engagement goals. While defined customer 37% of respondents plan to invest in blogging, user-generated content, engagement and social networks, it’s email newsletters that will receive the greatest Andy is considered strategy. investment (59%) over the coming year. Not that other channels aren’t one of the world’s valuable at building customer engagement, it’s simply a case that leading experts in email marketing shows the highest ‘tangible improvement’ in customer online reputation engagement – with 69% of respondents able to measure a benefit management. He from the use of email. Perhaps this is more of a statement about the effectiveness of measuring customer engagement using social media, is the co-author Figure 10 than a statement about social media itself. of Radically Agency: Do your clients typically have a defined Transparent: online customer engagement strategy? Ensuring customers are satisfied with Monitoring their experience is the most important metric and Managing Yes: 26.00% (117) to follow over the coming months. Reputations Online No: 68.44% (308) and founder of Don’t know / not relevant: 5.56% (25) So what data points will businesses find most valuable in measuring the online media success of their customer engagement efforts? Not surprisingly, almost 47% of respondents favour ‘customer satisfaction’ as the most important monitoring service metric to measure – easily beating the 37% who keep a close eye on the Trackur.com actual transactions that take place on their web site. Why the focus on customer satisfaction and not customer sales? As customer purse strings andybeal.com are tightened all around the world, few companies will have the luxury of reporting increases in customer sales. Instead, ensuring customers are satisfied with their experience is the most important metric to follow over the coming months. Those companies that can keep their customers happy during these difficult times will be well placed to enjoy tremendous growth, once our economy starts to recover. 13
  • 15. COMMENT Jim Sterne Online marketing working. Senior managers sleeping It’s a love hate relationship. We love the It’s reassuring to see that email is still king Interest in customer engagement Long-term customer value also emerged as technology, we love the results, but we hate the (60% anticipate an increase in email spend the benefit of customer engagement most Organisations focus on customer engagement fact that upper management still doesn’t get it. in the next 12 months). It’s also reassuring likely to be of interest to agencies’ clients. for a variety of reasons, but it is clear from to have one’s beliefs confirmed that mobile 87% of companies found customer Figure 11 that the essence of customer Slightly more agency respondents (32% is still very young (77% don’t do and / engagement essential or important and engagement is about creating relationships compared to 28% of company respondents) or are not planning on doing any mobile 11% thought it would be nice to have. The which result in value both for customers and mentioned gaining customer insight as a key marketing). It is nevertheless infuriating other four people must work for (fill in your for organisations. reason for their clients’ interest. that we are so late to the adoption game. least-liked brand here). But even with 98% How many more ROI stories, case studies Asked about their organisation’s interest Increasing market share was mentioned by agreeing that customer engagement is a good and actual results are required to push past Jim has written in online customer engagement, 38% of 30% of agencies, although this was lower thing, 57% have still not defined their online our lack of budgets to do the job decently? respondents said that it was about increasing down the list of priorities for responding eight books on engagement strategy. We know the house is 52% said budgets were the problem long-term customer value while 34% said that organisations (cited by 25% of company using the Internet burning, we just can’t be bothered to call the compared to 31% (the next highest it was about increasing value delivered to the respondents). fire brigade. The fault? Mid-level committees for marketing, category) who suggested technology was customer. and senior management. Similarly, the use of customer engagement to produces problematic. Respondents, who were able to check up to increase short-term conversions was cited by the eMetrics Not knowing how your It’s time to rally the troops and bring three options, were also likely to indicate that just over a quarter of agencies (26%) but only Marketing customers perceive you is the fight to the C-Suites. This time, it’s customer engagement is a way of deepening 16% of company respondents. Optimization not about faith and conviction but about and enriching their product or service offering almost as bad as not knowing demonstrable results and competitive Summit and is (29%) and a method for gaining customer how they acquire those edge. We now have the means to insight (28%). 38% of respondents Chairman of the perceptions. show how online marketing lifts brand said that it was about Web Analytics Only 2% of responding organisations said Association. awareness, brings more customers to the a major interest was insulating against a increasing long-term 55% of companies don’t know how many table, lowers costs and increases customer touch points they have, ‘need to start’ mapping satisfaction. troubled economy. This shows that very few customer value while emetrics.org customer experiences to obtain a single view companies are seeing improved customer 34% said that it was about engagement explicitly as a way of dealing of the customer or didn’t understand the with the economic downturn. This may partly increasing value delivered question. Customer engagement happens through customer touch points. Not knowing be because companies have not yet been to the customer. how your customers perceive you is almost as severely affected by the credit crunch, but bad as not knowing how they acquire those also because protection against recession is perceptions. The fault? Corporate silos and a possible benefit of customer engagement insulated departments acting independently. rather than a principal driver of their endeavours in this area. 14
  • 16. COMMENT Pete Mortensen When the customer talks back Figure 11 Figure 12 Company: Which of the following* best describe your Agency: Which of the following* best describe your Years from now, I think we’ll look back and remember 2008 as the organisation’s interest in online customer engagement? clients’ interest in online customer engagement? year when big business realised that pretending to be interested in its customers wouldn’t cut it anymore. As so often happens with change, 40 35 Strengthening emotional investment in your brand: 24.78% (113) Strengthening emotional investmentone understood the point of connecting it seems that one minute no in their brand: 21.78% (98) directly to consumers, and the next, everyone was doing it. 35 Increasing value delivered to the customer: 33.77% (154) Increasing value delivered to the customer: 28% (126) 30 Just consider how laughable it would have been a year ago if Reducing acquisition costs: 21.05% (96) Reducing acquisition costs: 21.56% (97) I had proclaimed that the biggest breakthrough in online customer 30 25 Increasing short-term conversions: 16.45% (75) Increasing short-term conversions: 26.22% (118) company H&R Block engagement would be the tax preparation 25 launching a Twitter feed. Or how unlikely it would have looked to predict Deepening and enriching your product or service offering: 28.95% (132) Deepening and enriching their product or service offering: 22.22% (100) a high-tech that a source of a turnaround at Starbucks would come from Pete is the 20 20 Adjusting to the increased importance and power of the customer: 10.53% Adjusting to the increased importance and power of the customer: 10.67% (48) suggestion box. Could anyone have announced without smirking that (48) communications 15 Increasing long-term customer value: 38.16% (174) companies outside of the technology sector would not only create social Increasing long term customer value: 32.67% (147) lead for Jump networking strategies, but that they would become essential components 15 Gaining customer insight: 31.78% (143) Associates and is Gaining customer insight: 28.29% (129) to their competitive approach? 10 the co-author of 10 Insulating against a troubled economy: 1.75% (8) Insulating against a troubled economy: 6.00% (27) The driving force here is the eroding effectiveness of traditional Wired to Care: How 5 Increasing market share: 24.78% (113) advertising. In an always-on world, multi-million dollar spots on TV don’t Increasing market share: 29.56% (133) Companies Prosper 5 have anywhere near the power that a zero-budget viral video could. Improved employee satisfaction: 5.48% (25) Improved employee satisfaction: 3.78% (17) When They Create People have learned to tune out ads that are imposed upon them, and 0 0 Enhanced public profile: 18.89% (85)connect with them. What we are seeing in seek out corporate ideas that Widespread Empathy Enhanced public profile: 19.96% (91) the slow emergence of electronic connections between producers and from FT Press. 35 Strengthening emotional investment in your brand: 24.78% (113) Reduced customer service costs: 17.98% their brand: 21.78% (98) Strengthening emotional investment in (82) Reduced customer service costs: 18.00% (81) consumers is the dawning realization that the best way to build customer Increasing value delivered to the customer: 33.77% (154) Increasing value delivered to the customer: 28% (126) Improving business predictability: 7.78% (35) new products – is to really 30 Improving business predictability: 5.48% (25) loyalty – and discover ideas for great jumpassociates.com Reducing acquisition costs: 21.05% (96) Reducing acquisition costs: 21.56% (97) understand who customers are as people. Other: 2.85% (13)short-term conversions: 26.22% (118) Other: 1.78% (8) Increasing short-term conversions: 16.45% (75) 25 Increasing In other words, these electronic seedlings that have grown up into Deepening and enriching your product or service offering: 28.95% (132) Deepening and enriching their product or service offering: 22.22% (100) 20 mighty oaks in the last year are a starting point and a call to action. Adjusting to the increased importance and power of the customer: 10.53% (48) Adjusting to the increased importance and power of the customer: 10.67% (48) H&R Block has very rapidly become a beloved brand online because its Increasing long-term customer value: 38.16% (174) 15 Increasing long term customer value: 32.67% (147) tax specialists are now available to help anyone with their tax questions Gaining customer insight: 28.29% (129) Gaining customer insight: 31.78% (143) free of charge. Now, just imagine what the company could do if it really 10 Insulating against a troubled economy: 1.75% (8) Insulating against a troubled economy: 6.00% (27) knew what was going on in the lives of the people asking beyond what Increasing market share: 24.78% (113) 5 Increasing market share: 29.56% (133) they can fit into a 140-character tweet. Improved employee satisfaction: 5.48% (25) Improved employee satisfaction: 3.78% (17) Business today is reconnecting with people in ways big and small to 0 Enhanced public profile: 19.96% (91) Enhanced public profile: 18.89% (85) propel through the tough economic times we find ourselves in. They Reduced customer service costs: 17.98% (82) Reduced customer service costs: 18.00% (81) would do well to focus increasingly more on the big. Because in a few Improving business predictability: 5.48% (25) Improving business predictability: 7.78% (35) years, you might look up, and see that everyone else is doing it too. Other: 2.85% (13) Other: 1.78% (8) * Respondents could check up to three options 15
  • 17. COMMENT Ian Jindal Sustaining profitability in a challenging retail climate Retail appears a simple business, in which Here we have the difference between Behaviour of an engaged customer It is clear that Web 2.0 has led to increased the extent of a customer’s ‘engagement’ old-school marketing (persuading the customer empowerment and amplified the Participants were asked to indicate up to three can be measured by their spend with you. customer to empty your warehouse) voice of customer more than ever before. But attributes of an engaged customer which The challenge – especially in the current and customer engagement (wrapping despite the growing importance of customer they considered most important to their climate – is conversion: converting browsers your activities around a conception of empowerment, only 13% cite participation organisations over the next year. to purchasers (without simply ‘buying their a profitable and sustained interaction). in innovation and design as one of the three customer with ever-deeper discounts’), and customer engagement should inform the The attribute seen as most important most important attributes. thereafter purchasers to retained, profitable design and operation of every facet of is recommends product, service or brand, customers. your activities – from planning through Co-creation (as first coined by C.K. Prahalad deemed to be a top-three descriptor by 58% ‘conversion’ to reactivation, or ‘continuing to describe collaboration by organisation Ian is a consultant, of company respondents and 54% of agency There is a fundamental trinity at the heart service’, as we should term it. and customer for the creation of mutual respondents [Figure 13 and Figure 14]. corporate advisor of ecommerce: product, price and service. value) provides a lucrative opportunity to and publisher, No sales are possible if you don’t have an The survey response illustrates the rich As Fred Reichheld argues in The Ultimate drive innovation and creativity, yet it is clear focusing upon appropriate product for a customer. Once the range of mechanisms and initiatives in Question2, the propensity of a customer that too many companies are still adopting a product is presented, the customer will balance this field, but it’s heartening to see a trend to make a recommendation provides top-down approach. Whilst more companies eCommerce price and service promise (for example, towards customer engagement as a way marketers with a valuable metric which are starting to employ crowdsourcing in retail and preferring a slightly more expensive ‘in-stock’ of integrating marketing approaches techniques as a means to drive innovation, can be correlated to business performance, publishing. item to a piece of out-of-stock ‘vapourware’, or to a customer and a convergence upon allowing organisations to view customer this approach has not yet hit the mainstream. the implied reliability of a multichannel retailer measures such as profit and ROI rather recommendation as a driver of growth and with a reputation and return-to-store). than ‘engagement’ as some end in itself. Only 10% of company respondents say that ianjindal.com profitability. The Net Promoter Score (NPS) is the propensity of an engaged customer to Customer engagement can provide a a good example of this. be less reactive to a troubled economy is a key Customer engagement: framework to focus activity upon sustained Other attributes of engaged customers attribute. It seems that not many companies wrapping your activities around profitability, and in a challenging retail are seeing customer engagement as a crucial climate one could ask for no better goal. regarded as very important are: a conception of a profitable attribute for shielding them against the and sustained interaction. • They are more likely to convert impact of the recession. more readily (44%) On the same theme, 17% of respondents So much for the first purchase. The second • They purchase regularly (36%) believe that less focus on price is a crucial purchase will be driven by the same • They are less likely to switch supplier (30%) attribute. Given that many organisations will criteria, but with the important overriding not want to compete through price-slashing, consideration of ‘performance’. Did the Companies are also recognising the an alternative strategy is to create sustainable product match its claims? Was your service importance of engaging in dialogue with their competitive advantage and long-term value level as promised? How did your team customers. Just over a quarter of respondents by differentiating through the customer deal with queries? Did follow-up marketing (26%) say that participating in online experience. match the tone and offer to the customer’s communities and support groups will be an experience, expectations and desires? important attribute over the next 12 months, The extent to which companies will actually while 23% acknowledge the importance of need to cut their pricing depends on a getting regular feedback. company’s positioning in the marketplace and the price elasticity of their product or service. 2 The Ultimate Question by Frederick F. Reichheld. www.theultimatequestion.com/ 16
  • 18. COMMENT Figure 13 Company: Which of the following attributes* of an engaged customer are likely to be most Martha Russell important to your organisation in the next 12 months? Engagement pinball 60 Purchases regularly: 35.89% (164) A political parody racked up a big score for marketing efforts to produce personal Provides feedback regularly: 22.76% (104) in engagement pinball when Tina Fey experiences that give customers knowledge of 50 portrayed US Republican Vice Presidential a brand’s relevance to their life. Both agency Recommends product, service or brand: 58.21% candidate, Sarah Palin, on September and company professionals expect engaging (266) 26, 2008 on the American comedy show, experiences will produce attention, affection 40 Participates in innovation and design: 12.69% (58) Saturday Night Live. Overnight, video clips and actions that will endure to produce trial Participates in online communities or support of the comedy skit were posted by both and sustain loyalty. The wild cards are the 30 groups: 25.60% (117) consumers and CBS, generating millions of risks. These include the risks of off-target Is less focused on price: 17.29% (79) downloads through YouTube. Like a silver or negative word-of-mouth in consumer- ball shooting through a pinball machine, generated-content, as well as uncontrollable 20 Is more tolerant of mistakes: 5.03% (23) Martha is Associate the fusion of topics, events, and people and hard-to-control factors in implementing Converts more readily: 43.98% (201) scored engagement at contact points interactive experiences. In truth, engagement Director of Media X, 10 Is less likely to switch supplier: 29.98% (137) on television, blogs, social media, email, scores multiply when customers act on and and Senior Research Is less reactive to a troubled economy: 10.28% (47) phone calls, hallway chats, and dinner speak about their involvement. Influence is an Scholar in Human 0 Other: 3.50% (16) conversations. active process. Many decision makers want to Sciences Technology minimize risks. Advanced Research The silver ball must be Institute, at Stanford It turns out there is no shortcut to trust, loyalty Figure 14 kept in play by continually or reputation. However, personal involvement University. She Agency: Which of the following attributes* of an engaged customer are likely to be most providing another round of and experiential marketing can provide high- studies innovation important to your clients in the next 12 months? experiences. scoring plays in the engagement pinball game. diffusion and digital To leverage this, the silver ball must be kept in play by continually providing another round of content as context The ‘ball’ hit the payload when 9.7 million 60 Purchases regularly: 46.99% (211) people watched the NBC Saturday Night experiences that sometimes activate the same, for associated contact Provides feedback regularly: 20.49% (92) Live skit. Over 25 million YouTube sometimes activate new customer contact points. 50 Recommends product, service or brand: 53.90% downloads were accompanied by millions points. And, importantly, the message must be consistent and relevant in context. (242) of blog postings in the first few days mediax.stanford.edu 40 Participates in innovation and design: 10.91% (49) following the TV broadcast. By the time Competitive marketers who want to play Governor Palin appeared in the Vice Participates in online communities or support engagement pinball must do more than Presidential Debate on October 2nd, TV 30 groups: 20.94% (94) periodically punch the flippers on the board. audience for the debate across all channels There are many ways to build score. Keeping Is less focused on price: 18.26% (82) topped 70 million. the ball in play requires understanding the ball 20 Is more tolerant of mistakes: 4.01% (18) The challenges for engagement architects (the customer), the board (relative value of Converts more readily: 48.33% (217) include gaining management support as available contact points) and, importantly, fast 10 well as customer attention. Both the Third response to keep the play active. All senses Is less likely to switch supplier: 37.64% (169) Annual cScape Customer Engagement must be activated! Relevance is a multiplier. Is less reactive to a troubled economy: 8.24% (37) Survey and my spring 2008 study of High score still wins! 0 Other: 1.34% (6) experiential marketing, point to a desire * Respondents could check up to three attributes of an engaged customer 17
  • 19. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Over a third of agencies (35%) report that their clients are not very advanced at mapping customer touch-points. Mapping customer experiences Figure 15 Customer engagement and the Company: How advanced are you at mapping customer Figure 15 shows the extent to which experiences to obtain a single view of the customer? troubled economy companies are mapping customer experiences in order to obtain a single view Impact of the economic downturn of the customer. Very advanced (we know all our customer touch-points): 3.29% (15) The sample of organisations surveyed for There hasn’t been a radical improvement this report is split in terms of whether they Quite advanced (we know most of our customer since 2006 but the proportion of companies touch-points): 41.45% (189) are paying more attention to customer who are either not very advanced or not doing engagement as a result of the economic Not very advanced (we don’t even know how many this at all has decreased from 60% to 52%. Companies are situation. touch-points we have): 35.31% (161) But this still remains a problem area for more either taking an We need to start doing this: 17.11% (78) Under half of respondents (41%) said that than half of the organisations surveyed. ‘ostriches’ or ‘owls’ their organisations were now placing more approach to the Don’t know / not relevant: 2.85% (13) Only 3% of companies report that they are emphasis on customer engagement, but 41% current economic very advanced at mapping while 41% say that climate. said this was not the case. they are quite advanced. It is apparent that companies are either taking For a variety of political, cultural and technical an ‘ostriches’ or ‘owls’ approach3 to the current reasons, many organisations have struggled economic climate, with some companies to provide a seamless experience for the Figure 16 seemingly in denial about the increased customer. The ability of some companies to Agency: Typically, how advanced are your clients at mapping importance of customer engagement during do this well, sometimes because they have customer experiences to obtain a single view of the customer? a recession. started from scratch with the customer at Forward-thinking organisations will need to the heart of their proposition, has increased Very advanced (we know all our customer gain greater insight around how customer pressure on other organisations to get touch-points): 3.29% (15) behaviour will be shaped by the current this right. Quite advanced (we know most of our customer economic situation and what they can do to Agency responses to this question, show that touch-points): 41.45% (189) strengthen customer relationships. over a third of agencies (35%) report that their Not very advanced (we don’t even know how many touch-points we have): 35.31% (161) Differentiating the customer experience clients are not very advanced at mapping will enable companies to secure sustainable customer touch-points to obtain a single view We need to start doing this: 17.11% (78) long-term competitive advantage, and this of the customer, and a further 18% say that Don’t know / not relevant: 2.85% (13) necessitates placing more emphasis on the they need to start doing this. importance of customer engagement. 3 www.e-consultancy.com/news-blog/366490/owls-will-beat-the-recession-ostriches-won-t.html 18
  • 20. COMMENT Eric Peterson We (still) need a standard measure for engagement, perhaps more than ever! Figure 17 The fact that Third Annual cScape Customer Engagement Survey Company: Has a worsening economic situation caused your reports that 42 percent of companies have a defined online customer organisation to place more emphasis on customer engagement? engagement strategy is great news but is somewhat troubling given the diversity of opinions regarding how customer engagement should actually be measured. In last year’s survey my good friend, Mr Jim Yes: 40.52% (171) Sterne, commented on the difficulty we have as an industry defining No: 41.71% (176) what we mean by the term ‘engagement’ and was spot on. Some Don’t know / not relevant: 17.77% (75) of us don’t believe that engagement can be measured at all, others believe engagement is similar to U.S. Justice Potter Stewart’s view on Differentiating pornography (“I know it when I see it.”), while still others believe that Eric is a strategic the customer engagement can be measured using a combination of qualitative and experience quantitative input readily available in the digital channel. business consultant will enable advising businesses If we as an industry struggle to define the basis for measurement, how is companies to around the globe secure sustainable it possible that so many companies are able to think strategically about improving customer engagement? More than likely the hype surrounding on their use of long-term web analytics competitive the subject has driven companies to cobble together plausible sounding advantage. initiatives but they have done so in a measurement vacuum. If this is technology, as the case, it is even more interesting that so many companies are able to well as the author Figure 18 report tangible improvements in online customer engagement associated of Web Analytics Agency: Has a worsening economic situation caused your with specific tactical efforts like micro-blogging, user contributed clients to place more emphasis on customer engagement? Demystified, Web content, and rich interactive applications. Site Measurement Yes: 41.19% (180) Hype... has driven companies to cobble together Hacks and The No: 35.01% (153) plausible sounding initiatives but they have done Big Book of Key Don’t know / not relevant: 23.80% (104) so in a measurement vacuum. Performance Indicators. My hope for the coming year is that the measurement industry can come together and adopt a standard definition of engagement, one that can be webanalytics practically applied so that when we ask ‘what drives engagement?’ the demystified.com answers are grounded in such a way that we can compare results across sites, across technologies, and across audiences. Nobody questions the need to engage our customers and prospects, but the time has come for a common context when doing so. 19
  • 21. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Satisfaction metrics together with transactional data are viewed as critical for developing customer insights. Customer data collection Figure 19 Figure 20 Company: Which of the following types of customer data* Agency: Which of the following types of customer data* do Respondents were asked to indicate up to three do you believe will be most useful for developing customer you believe will be most useful to your clients for developing sources of data which they thought would insights during an economic downturn? customer insights during an economic downturn? be useful for developing customer insights during an economic downturn [Figures 19 & 20]. Almost half of company respondents (47%) 50 50 Customer complaints : 19.67% (83) Custome said that customer satisfaction information Offline behaviour would be useful for this purpose. data was deemed Customer praise: 7.58% (32) Custome to be among Transactional data was cited by 37% of 40 Customer satisfaction: 47.39% (200) 40 Custome the three most companies surveyed. Its relatively high important Customer feedback on competitors Custome importance comes as no surprise as companies information products or services: 19.67% (83) products will be closely monitoring how the economic sources by only 30 30 situation impacts on customer spending. 9% of respondents. Customer-generated ideas for Custome Previous online behavioural data was reported 50 50 Customer complaints : 19.67% (83) products / services: 22.99% (97) Customer complaints: 19.77% (86) products/ as being useful by 30% of companies surveyed. Customer praise: 7.58% (32) Customer praise: 5.06% (22) 20 Lifestyle data: 20.14% (85) 20 Lifestyle d This information can enable organisations 40 Customer satisfaction: 47.39% (200) 40 Customer satisfaction: 40.23% (175) to analyse how customer behaviour evolves Data on customers’ personal values Data on c Customer feedback on competitors Customer feedback on competitors during the downturn and respond accordingly. and beliefs: 15.40% (65) and belie products or services: 19.67% (83) products or services: 24.37% (106) 30 10 30 10 In contrast, previous offline behaviour data was Customer-generated ideas for Previous online behaviour data: Customer generated ideas for Previous deemed to be among the three most important products / services: 22.99% (97) products/ services: 22.99% (100) 29.86% (126) 28.74% information sources by only 9% of respondents. 20 Lifestyle data: 20.14% (85) 20 Lifestyle data: 17.01% (74) 0 Demographic data: 18.72% (79) 0 Demogra Declared customer preferences and customer- Data on customers’ personal values Data on customers’ personal values generated ideas for products / services were and beliefs: 15.40% (65) and beliefs: 22.99% (100) 10 10 Transactional data: 36.73% (155) Transacti cited as being useful by 27% and 23% of 50 Customer complaints : 19.67%50 (83) Previous online behaviour data: Customer complaints: 19.77% (86) Previous online behaviour data: respondents respectively. Customer praise: 7.58% (32) 29.86% (126) Declared customer preferences: 28.74% (125) Declared Customer praise: 5.06% (22) 0 Demographic data: 18.72% (79) 0 26.54% (112) Demographic data: 17.47% (76) 28.74% The agency perspective on 40 relative the Customer satisfaction: 47.39%40 (200) Customer satisfaction: 40.23% (175) importance of different types of data during Customer feedback on competitors Transactional data: 36.73% (155) Previous Customer behaviourcompetitors offline feedback on data: Transactional data: 35.40% (154) Previous an economic downturn was similar to that of products or services: 19.67% (83) Declared customer preferences: 9.24% (39) or services: 24.37% (106) products Declared customer preferences: 13.79% companies themselves. 30 Customer-generated ideas for 30 26.54% (112) 28.74% (125) Customer generated ideas for products / services: 22.99% (97) Previous offline behaviour data: Other: 1.66% (7) products/ services: 22.99% (100) Previous offline behaviour data: Other: 2. It is clear that satisfaction metrics together 9.24% (39) 13.79% (60) with transactional data are20 viewed as critical Lifestyle data: 20.14% (85) 20 Lifestyle data: 17.01% (74) Other: 1.66% (7) Other: 2.99% (13) for developing customer insights. Data on customers’ personal values Data on customers’ personal values and beliefs: 15.40% (65) and beliefs: 22.99% (100) 10 10 Previous online behaviour data: Previous online behaviour data: 29.86% (126) 28.74% (125) * Respondents could check up to three options 20 0 Demographic data: 18.72% (79)0 Demographic data: 17.47% (76) Transactional data: 36.73% (155) Transactional data: 35.40% (154)
  • 22. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Over a third of respondents (36%) say that the desire for simplicity needs to be addressed in the next 12 months. Changing customer behaviour Even more than they want to buy cheaply, Some believe that the luxury sector will Figure 21 more customers will ensure they are getting face a temporary downturn as consumers Company: Which of the following behaviours and and attitudes the best value, even if that means paying cut back spending on high-end goods and attitudes* do you expect your organisation will need to Perhaps predictably, sensitivity to price is the more for products and services. services. A large swathe of people working in address in the next 12 months? type of customer behaviour which company financial services will not have the same levels Companies also need to consider how more of disposable income – and bonuses – as in respondents feel that they will most likely people are likely to be “trading up and down”, previous years. 50 Sensitivity to need to address over the next 12 months and how this will affect them. [Figure 21]. On the other hand, the downturn is Prolonged de Although some consumers will take a longer unexpected to affect the super-rich, who Nearly half of companies surveyed (48%) say 31.12% (131 term view about what represents value, will continue to indulge as normal while, 40 that this is among the five most significant others will be in crisis mode and live more on counter-intuitively, others who can’t really Focus on qua behavioural traits. This is consistent with a hand-to-mouth basis. Just over a quarter of afford it could also indulge in luxury other research4 by E-consultancy which shows Intolerance of respondents (27%) say that their organisations purchases as a way of denying that they are that customers will increasingly turn to price 30 will need to address an increased focus on affected by the crisis. 32.07% (135 comparison sites in the next few months. short-term needs. 50 From the agency perspective, sensitivity to Sensitivity to price: 48.22% (203) Sacrifice (fam As the global economic crisis worsens, Just over a third of respondents (36%) say that price is seen as being even more important, thriftiness in spending will no longer be a 20 Prolonged decision-making: Lack of suppl the desire for simplicity needs to be addressed reported as a significant behaviour by 62% 31.12% (131) choice, but rather a necessity for many people. 40 30.17% (127 in the next 12 months. The desire for simplicity of respondents. Coupled with price sensitivity, prolonged Focus on quality: 44.89% (189) is shaped by the need for consumers to decision-making will also become a significant Intolerance of poor customer service: Desire for sim establish a feeling of control, both over their Slightly fewer agencies (34%) than companies type of behaviour which needs to be 30 10 32.07% (135) finances and their long-term future. (30%) report that a lack of brand loyalty will Buying and se addressed, as suggested by 31% of companies shape the next wave of consumer behaviour, Sacrifice (family first etc.): 7.36% (31) and 38% of agencies. Customers will seek out brands that they can 4.75% (20) as customers increasingly choose price 20 Lack of supplier/brand loyalty: trust to deliver goods and services reliably. over brand loyalty as a basis to differentiate However, not everyone will want to spend 0 30.17% (127) Purchase of lu Companies will need to ensure that they are between rival competitors. all their time making decisions about the Desire for simplicity: 36.34% (153) items: 8.79% focused on best-in-class customer service, and cheapest things to buy, or whether they 50 10 it can be seen that 32% of respondents say Sensitivity to price: 48.22% (203) Buying and selling second-hand: Buying own-b actually need to make a purchase. Focus on 4.75% (20) that increased intolerance of poor customer Prolonged decision-making: 7.13% (30) quality is also seen as something which will service is prominent on their radar. 0 31.12% (131) Purchase of luxury and indulgent become more evident, with 45% of company 40 items: 8.79% (37) respondents saying they need to address this. Focus on quality: 44.89% (189) Focus on shor Just 9% of company respondents believe that Buying own-brand products: 27.08% (114 the purchase of luxury and indulgent items Intolerance of poor customer service: 7.13% (30) 30 32.07% (135) within the next 12 months will be a significant Other: 4.28% Focus on short-term needs: factor for them. Sacrifice (family first etc.): 7.36% (31) 27.08% (114) 20 Lack of supplier/brand loyalty: Other: 4.28% (18) 30.17% (127) Desire for simplicity: 36.34% (153) 10 Buying and selling second-hand: 4.75% (20) 4 Online Shopping and Credit Crunch Report 2008. * Respondents could check up indulgent Purchase of luxury and to three options 0 items: 8.79% (37) 21
  • 23. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Figure 22 Tactics and initiatives In spite of the questions raised over the engagement, 38% of companies anticipate Agency: Which of the following behaviours and attitudes* do you profitability or return on investment from greater investment in this area in the future. expect your clients will need to address in the next 12 months? Ways of improving engagement and Web 2.0 features and functionality, a quarter of company respondents (25%) and just under In terms of spending over the next 12 months, 80 areas of investment there will be most investment in email Sensitivity to price: 61.84% (269) a third of agencies (31%) report that blogging The overwhelming majority of companies has tangibly improved customer engagement. newsletters, with 59% of respondents saying surveyed (69%)decision-making: Prolonged agree that email newsletters that their organisations will increase their 70 Similarly, 23% of company respondents and spending in this area [Figure 24]. have resulted in a tangible improvement in 37.70% (164) customer engagement [Figure 23]. 30% of agencies report improvement in engagement through brand presence on social Other components of Web 2.0 and social 60 Focus on quality: 37.47% (163) This can partly be attributed to the fact that networks, whilst 21% of organisations mention media such as user ratings & feedback (41%), industry-wide metrics for email marketing user-generated content. user-generated content (37%), blogging (36%) 50 Intolerance of poor customer service: and brand presence on social networks (36%) (such as open rates and click-throughs) have 41.84% (182) been long established, enabling marketers to Despite the relative novelty of micro-blogging are also expected to attract significant sums understand the impact of their efforts to the utilities such as Twitter, 7% of companies of investment in spite of oft-heard complaints 40 Sacrifice (family first etc.): have improved their customer engagement that it is not always easy to track ROI in some 80 Sensitivity to price: 61.84% (269) bottom line. Prolonged decision-making: 11.49% (50) through this channel. This is a small of these areas. 70 30 37.70% (164) Just under a third of respondents (30%) say percentage but a not insignificant number that focused micro-sites, on-site video (brand- Lack of supplier / brand loyalty: of businesses. In terms of the agencies surveyed, 60 Focus on quality: 37.47% (163) created) and (147) respondents also rank email newsletters 33.79% user ratings and feedback have 50 20 Intolerance of poor customer service: resulted in better engagement. highly, with 60% of these respondents saying 41.84% (182) Areas of increased investment Desire for simplicity: 36.55% (159) that this tactic has resulted in tangible 40 Sacrifice (family first etc.): Given that user reviews not only enhance It is interesting to note that percentages customer engagement improvement. Slightly 10 11.49% (50) credibility for online retailers, but have also in Figure 24 are generally higher than in 30 Buying and selling second-hand: more agencies than clients (38% compared Lack of supplier / brand loyalty: been shown to boost conversion rates and Figure 23. Although there is a correlation to 30%) report better engagement resulting 33.79% (147) 4.83% (21) average order values, it is not surprising that 20 0 between demonstrably improved customer from user ratings and feedback. Desire for simplicity: 36.55% (159) ratings and reviews feature prominently here5. engagement and increased spending, there 10 Sensitivity to price: 61.84% (269) Buying and selling second-hand: Purchase of luxury and indulgent Lucrative areas of growth within the next are significant numbers of companies who 4.83% (21) Similarly, in the blink of an eye, on-site items: 8.74% (38) 12 months, from the agency perspective, 0 Prolonged decision-making: are investing in various areas without having 37.70% (164) Purchase of luxury and indulgent video has also quickly gone from being a include increased investment in brand experienced a tangible uplift in customer Focus on quality: 37.47% (163) items: 8.74% (38) compellingown-brand products: Buying differentiator to something which presence on social networks, online video and engagement. This must be either because Buying own-brand products: consumers (38) 8.74% expect. rich on-page interactive experiences. Intolerance of poor customer service: 8.74% (38) they can’t measure the uplift or because they 41.84% (182) are expecting benefits other than increased Sacrifice (family first etc.): Focus on short-term needs: 32.64% (142) Focus on short-term needs: customer engagement. 11.49% (50) Other: 2.07% (9) 32.64% (142) Lack of supplier / brand loyalty: For example, although only 16% of 33.79% (147) Other: 2.07% (9) respondents report that rich on-page Desire for simplicity: 36.55% (159) interactive experiences have resulted in Buying and selling second-hand: a tangible improvement in customer 4.83% (21) Purchase of luxury and indulgent items: 8.74% (38) * Respondents could check up to three options 5 See also E-consultancy’s Social Commerce Report 22 Buying own-brand products: 8.74% (38)
  • 24. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Figure 23 Figure 24 Company: Have any of the following resulted in a tangible Company: In which of the following do you anticipate investment improvement in your organisation’s online customer engagement? to increase online customer engagement over the next 12 months? 80 60 Brand presence on social networks (e.g.Facebook): Brand presence on social ne 23.27% (84) 35.79% (141) 70 Just under a third 50 On-site video (brand-created): 29.92% (108) On-site video (brand-created of respondents (30%) say that 60 On-site video (user-created): 3.32% (12) On-site video (user-created): focused micro-sites, 40 on-site video 50 Focused micro-sites: 30.19% (109) Focused micro-sites: 37.82% (brand-created) 80 60 Brand presence on social networks (e.g.Facebook): and user ratings Brand presence on social networks (e.g.Facebook): 23.27% (84) Email newsletters: 69.25% (250) 35.79% (141) Email newsletters: 58.63% ( and feedback have 4070 30 50 On-site video (brand-created): 42.64% (168) resulted in better On-site video (brand-created): 29.92% (108) On-site audio: 8.03% (29) On-site video (user-created): 14.21% (56) On-site audio: 12.94% (51) engagement. 60 On-site video (user-created): 3.32% (12) 40 Focused micro-sites: 37.82% (149) 30 Focused micro-sites: 30.19% (109) Blogging: 24.65% (89) Blogging: 35.79% (141) 50 20 Email newsletters: 58.63% (231) Email newsletters: 69.25% (250) 30 20 40 Micro-blogging utilities, e.g. Twitter: 6.65% (24) On-site audio: 12.94% (51) Micro-blogging utilities, e.g. On-site audio: 8.03% (29) Blogging: 35.79% (141) 30 20 Blogging: 24.65% (89) Desktop-based applications / widgets / gadgets: 10 Desktop-based applications Micro-blogging utilities, e.g. Twitter: 13.45% (53) 1020 Micro-blogging utilities, e.g. Twitter: 6.65% (24) 4.16% (15) 10 Desktop-based applications / widgets / gadgets:14.72% (58) Desktop-based applications / widgets / gadgets: 14.72% (58) 10 4.16% (15) Web-based widgets / 0 badges / gadgets: 9.70% (35) Web-based widgets / badges / gadgets: 25.89% Web-based widgets / badge 0 Web-based widgets / badges / gadgets: 9.70% (35) 0 (102) 0 (102) Brand presence on social networks (e.g.Facebook): 60 Rich on-page interactive experiences: 15.79% (e.g.Facebook): Rich on-page interactive experiences: 15.79% (57) Brand presence on social networks (57) Rich on-page interactive experiences: 37.56% (148) 35.79% (141) 23.27% (84) User ratings and feedback: 29.64% (107) User ratings and feedback: 40.86% (161) Rich on-page interactive exp On-site video (brand-created): 29.92% (108) 50 Personalised messaging throughout the site: User ratings and feedback: 29.64% (107) 42.64% (168) On-site video (brand-created): Personalised messaging throughout the site: On-site video (user-created): 3.32% (12) 10.53% (38) On-site video (user-created): 14.21% (56) 27.16% (107) User ratings and feedback: 4 40 Personalised messaging throughout the site: User-generated content ( e.g. reviews, imagery): Focused micro-sites: 37.82% (149) User-generated content ( e.g. reviews, imagery): Focused micro-sites: 30.19% (109) 21.05% (76) 10.53% (38) Email newsletters: 58.63% (231) 36.55% (144) Personalised messaging thro Email newsletters: 69.25% (250) 30 Mobile communications: 10.25% (37) Mobile communications: 18.27% (72) 27.16% (107) On-site audio: 8.03% (29) User-generated content (On-site audio: 12.94%imagery): User on-page customisation, e.g. BBC home page: e.g. reviews, (51) User on-page customisation, e.g. BBC home page: Blogging: 35.79% (141) Blogging: 24.65% (89) 3.88% (14) 20 21.05% (76) 14.97% (59) User-generated content ( e.g Micro-blogging utilities, e.g. Twitter: 6.65% (24) Micro-blogging utilities, e.g. Twitter: 13.45% (53) On-site branded communities / forums: 14.68% (53) 36.55% (144) On-site branded communities / forums: 23.86% (94) Desktop-based applications / widgets / gadgets: SMS service10 alerts: 10.53% (38) Mobile communications: Desktop-based(37) / widgets / gadgets: 10.25% applications SMS service alerts: 14.97% (59) 4.16% (15) 14.72% (58) Social knowledge sharing, e.g. wikis: 8.31% (30) Mobile communications: 18. Social knowledge sharing, e.g. wikis: 16.24% (64) Web-based widgets / badges / gadgets: 9.70% (35) 0 User on-page customisation, e.g. BBC/ badges / gadgets: 25.89% Web-based widgets home page : Other: 2.22% (8) (102) Other: 2.79% (11) Rich on-page interactive experiences: 15.79% (57) 3.88% (14) User on-page customisation Rich on-page interactive experiences: 37.56% (148) User ratings and feedback: 29.64% (107) 14.97% (59) Personalised messaging throughout the site: On-site branded communities / forums: 14.68% (53) User ratings and feedback: 40.86% (161) 23 10.53% (38) Personalised messaging throughout the site: On-site branded communitie
  • 25. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Mobile marketing to enhance customer Figure 25 Figure 27 engagement Company: How are you using mobile marketing to enhance Company: How do your segment your online audience to identify customer engagement? “quality” customers / users? Only 5% of companies have a customer engagement strategy which embraces the mobile channel. Our customer engagement strategy seamlessly 120 embraces mobile marketing: 5.33% (21) The results demonstrate that mobile We do the occasional ad hoc piece of marketing via marketing continues to be the subject of the mobile channel: 17.26% (68) 100 ongoing hype without much evidence of We don’t do any mobile marketing, but we are investment. planning to: 35.79% (141) 80 The vast majority of respondents (78%) We don’t do any mobile marketing, and we don’t report that their company is not doing any have any plans to do any: 41.62% (164) 60 mobile marketing. Of these, 42% say that their company has no plans to implement any mobile marketing, while 36% of companies 120 120 40 plan to do some mobile marketing in the 100 100 future. 80 80 20 From the agency perspective, a higher 60 60 proportion of agencies (30%) than clients Figure 26 0 40 40 A B C D E F G H I J (17%) report that their clients do the Agency: Typically, how are your clients using mobile marketing to occasional ad hoc piece of mobile marketing. enhance customer engagement? 20 20 0 0 Segmentation of audience to identify A B C D E FA GB HC ID JE F G H I J Their customer engagement strategy seamlessly A Customer lifecycle 37. quality customers embraces mobile marketing: 4.68% (19) Use now Next 12 Don’t know / Use nowDon’t use Next 12 not Don’t use A Customer lifecycle B Value to organisation (134) 26.52% (96) 22.10% (80) months(96) relevant A Customer lifecycle 37.02% months 37.02% (134) 26.52% 14.36% (52) 42. 22.10% (80) In terms of segmenting users, both companies They do the occasional ad hoc piece of marketing Value to organisation B B C Referrer / channel 42.23% (155) Value to organisation 25.89% (95) 42.23% 20.71% (76) (155) 25.89% 11.17% (41) (95) 20.71% 48. (76) (49%) and agencies (47%) alike use referrers / via the mobile channel: 29.56% (120) C Referrer / channel C Referrer / channel 48.61% (175) 25.28% (91) 48.61% 17.50% (63) (175) 25.28% 8.61% (91) 17.50% (63) (31) D Behaviour D Behaviour D Behaviour 41.16% (149) 32.04% (116)41.16% 17.40% (63) (149) 32.04% 9.39% (116) (34) 41. 17.40% (63) channel as a key means of identifying quality They don’t do any mobile marketing, but they are Recency and / or frequency E Recency and / or frequency E E Recency and / or frequency 27.07% (98) 17.96% (65) 9.94% (36) 45.03% (163) 45.03% (163) 27.07% (98) 45. 17.96% (65) customers. Slightly more agencies (52%) planning to: 34.24% (139) F Demographics F Demographics 45.15% (163) 23.82% (86) 45.15% 21.05% (76) (163) 23.82% 9.97% (86) 21.05% (76) (36) GF Demographics G Degree of emotional engagement Degree of emotional engagement 16.24% (57) 25.64% (90) 16.24% 41.31% (145) (57) 25.64% 16.81% (59) (90) 41.31% 45. (145) report that their clients use demographic data They don’t do any mobile marketing, and they H Other don’t H Other 3.13% (4) 7.03% 3.13% 29.69% (38) (9) (4) 7.03% 60.16% (77) (9) 29.69% (38) than the companies themselves (45%). have any plans to do any: 31.53% (128) G Degree of emotional engagement 16. H Other 3.1 Less than a fifth of companies (16%) say that they use degree of emotional engagement to segment their online audience. 24
  • 26. COMMENT Becky Carroll Creating customer engagement on their turf Figure 28 Building strong relationships with take place on the organization’s website but Agency: How do your clients typically segment their online customers is critical to improving customer wherever our customers are already interacting audience to identify “quality” customers / users? repurchase and recommendation rates. online. For some customers, this may be If a customer feels connected to an through their favorite social network, such as organization that understands and cares Facebook or MySpace. For other customers, 100 about them, they are much more likely this may be on a popular blog or forum. Still to remain loyal and tell their friends. others may prefer to interact via their own The results of the Third Annual Online content (videos, photos, etc.) or simply to 80 Customer Engagement Survey give an comment on the content created by others. indication of where these customer We need to look across the customer Becky is Director connections need to take place: wherever 60 our customers like to “hang out” online. experience and see how customers are of Social Media at interacting with both our organization as well Brickfish, a social as with other customers. How can we help Customer communication media advertising 40 them spread the word about us? An engaged 100 100 and the resulting network, and customer can become our greatest evangelist. conversation should not We should also ask ourselves why a customer author of the 80 80 20 just take place on the would want to engage with us. Often, the blog Customers 60 60 organization’s website but answer is for customer service purposes. Rock!, which Engagement is strengthened when it occurs gives advice on 40 40 0 wherever our customers are throughout the customer lifecycle, not just A B C D E F G H I J how businesses already interacting online. when a customer needs something from us, 20 20 or when we have something to say. can make sure Don’t know / their customers’ Use now Online customer 12 Next engagement hasDon’t use entered months The answer relevant better results from not to getting 0 0 A B C D E FA GB HC ID JE F G H I J a new era, one of interaction with the experiences rock. A Customer lifecycle Use now Next 12 Don’t know / 36.93% Don’t(147) through conversation. The Report (96) online engagement isn’t just throwing our Use nowDon’t use Next 12 not relevant Don’t use know / brand 23.37% (93) 24.12% 15.58% (62) months months not relevant A B Value to organisation 41.01% (162) 26.08% organizations20.00% (79) message out to (51) number of social media indicates many (103) (69%) are 12.91% any A Customer lifecycle Customer lifecycle B C Referrer / channel 41.01% (162) 36.93% (147) 23.37% (93) 36.93% 24.12% (96) (147) 23.37% 15.58% (62) (93) 24.12% (96) 15.58% (62) sites to see what sticks. Planning ahead, we customersrock.net B C Value to organisation Referrer / channel Value to organisation C Referrer / channel 46.84% (178) 26.08% (103) 22.89% (87) 41.01% 20.00% (79) (162) 46.84% 15.00% (57) (178) 26.08% 12.91% (51) (103) 22.89% 15.26% (58) (87) 20.00% (79) 15.00% (57) 46.84% 12.91% (178) 15.26% (58) (51) 22.89% (87) 15.00% still trying to engage online through their(57) 15.26% (58) D D Behaviour need to invest time to understand where our D Behaviour Behaviour 37.98% (147) 30.49% (118)37.98% 18.60% (72) (147) 30.49% 12.92% (50) (118) 18.60% (72)37.98% (147) newsletters and plan to18.60% to 12.92% (50) email 30.49% (118) continue (72) 12.92% (50) E Recency and / or frequency E Recency and / or frequency 45.26% (172) 23.42% (89) 45.26% 18.42% (70) (172) 23.42% 12.89% (49) (89) 18.42% (70) 12.89% (49) customers prefer to interact online. Then, F Demographics F E Recency and / or frequency 20.89% (80) 14.36% (55) 12.53% (48) Demographics 52.22% (200) 52.22% (200) 20.89% (80) 14.36% (55)45.26% (172) so in the next 12 months (59%). This is 12.53% (48) do 23.42% (89) 18.42% (70) 12.89% (49) in order to most effectively engage those G H Other F Demographics 5.93% (7) Degree of emotional engagement Degree of emotional engagement 11.56% (43) G H Other 24.19% (90) 4.24% 11.56% 42.20% (157) (43) 5.93% 26.27% (31) (5) (7) 24.19% 22.04% (82) (90) 4.24% 63.56% (75) (5) 52.22% (200) for 20.89% communication; however, 42.20% (157) 26.27% (31) 22.04% (82) 63.56% (75) fine one-way (80) 14.36% (55) customers, we need to go to those sites, watch 12.53% (48) G Degree of emotional engagement 11.56% (43) customer engagement calls for more. true 24.19% (90) 42.20% (157) and22.04% (82) for a while, and begin listen intensely H Other 5.93% (7) The best way to enable ongoing online (31) to engage our customers in conversation 4.24% (5) 26.27% 63.56% (75) engagement is to create ongoing online where they are. By taking this approach, customer conversations. This occurs when we will understand how best to converse we engage online on the customer’s terms, with our customers, in the manner that they as well as on the customer’s turf. In other prefer, which will naturally increase customer words, customer communication and the engagement, and loyalty, with us. resulting conversation should not just 25
  • 27. COMMENT Matthew Bailey Striking a balance One of the prime ways to drive an economy out of recession is to get Issues around customer Meanwhile, a third of agencies (33%) report that organisational Joe Public back out on the high streets and on-line, spending their incoherence is typically a problem for clients but only 21% of hard-earned money again. So it’s reassuring to note that 44.07 percent engagement and key principles organisations say that this is actually an issue. This difference again of the respondents to the Customer Engagement Survey were placing suggests that this problem is more evident to observers looking in. more emphasis on customer engagement in the face of the economic Barriers to better online customer downturn. On the other hand, over a third seem to be burying their engagement heads in the sand and not emphasising this important function. Lack of resources continues to be a major At a glance, the biggest obstacles* holding back companies from To be fair, perhaps they already have fantastic customer engagement, barrier to successful customer engagement cultivating better customer engagement are as follows: but experience tells us that there’s always room for improvement and although, encouragingly, slightly fewer now is certainly no time for complacency. companies than last year now find this to be Matthew is editor a major problem (52% compared to 60% in of Customer With reports that the budget end of the retail market is booming, it’s Lack of resources 52% last year’s survey). Magazine and perhaps no surprise then that the survey has pointed out a sensitivity Problems with technology 31% its sister title to price (61.76%) amongst respondents’ clients. Will this trend continue Similarly, although problems with technology Difficult proving ROI 28% or will there be a ‘flight to quality’? A focus on quality was expected by cause difficulties for fewer respondents VitAL. He is an Complexity of organisation 26% 37.96 % of the survey suggesting that they are in for the long haul not than last year, steps still need to be taken to experienced the short term, although a focus on short term needs was predicted by address this. Almost a third of companies business to 33.43%, so it appears to be a finely balanced situation. (31%) say that this is a significant barrier to business journalist cultivating better customer engagement The most significant barriers reported by agencies on behalf of There’s always room for improvement and now (compared to 35% last year). However, it can their clients are: with over 13 years’ is certainly no time for complacency. be seen that only 17% of agencies report that experience on a problems with technology are holding back range of technical their clients. Lack of resources 45% Obviously, differentiating your offering through more effective customer and industrial Lack of skills / experience / 42% engagement has to be a key cost-effective method of boosting margins periodicals. More than a quarter (28%) of companies still in a cold economic climate. The government and many customer understanding struggle with proving a tangible return on relations insiders have been keeping up a chorus stressing the Organisational incoherence 33% investment or providing a viable business case 31media.co.uk importance of training. While the temptation may be to slash the training (difficulty proving ROI). Difficult proving ROI 31% budget and go for an on-paper, cheaper, automated, IT-based approach, it remains the case that most customers want to interact with other According to 42% of agencies [Figure 30], humans and for these people to be effective they need knowledge and a lack of skills, experience or understanding is training. I suspect that the savvy customer relations practitioners will holding back clients from cultivating better cherry-pick the best from both approaches. customer engagement. Only a quarter of companies surveyed said this was a major barrier. * Respondents could check up to three barriers 26
  • 28. COMMENT Stéphane Hamel When engagement rhymes with commitment Figure 29 Everyone agrees that the concept of ‘customer engagement’ is Company: Which of the following have been the most significant barriers important, but few have defined a strategy to support it. Without it, it’s to cultivating better customer engagement in the last 12 months? hard to know and describe the attributes of an organisation’s customer engagement. It’s even harder to drive long term commitment and 60 60 Organisational incoherence, culture or (lack of) will: 21.48% (84) Organisational incoherence, culture or (lack of) will: 21.48% (84) objectives: improving life-time value and truly being customer centric. Lack of skills / experience //understanding: 24.81% (97) Lack of skills / experience understanding: 24.81% (97) The economic downturn might be the trigger companies were waiting 50 50 Customers or products unsuitable: 5.37% (21) Customers or products unsuitable: 5.37% (21) for to justify a stronger focus on customer engagement. Those that have Lack of, or difficulty proving, ROI / / business case: 28.39% (111) Lack of, or difficulty proving, ROI business case: 28.39% (111) a good handle on their strategy – and measuring it – are seeing higher 40 40 outcomes. Despite economic troubles, they are more likely to pursue Problems with technology: 30.69% (120) Problems with technology: 30.69% (120) long term strategies. Simply put, they will come out of it stronger! Stéphane is Lack of methodology or framework: 24.81% (97) 30 30 Lack of methodology or framework: 24.81% (97) an eBusiness Complexity of organisation: 26.34% (103) Complexity of organisation: 26.34% (103) Pressured by the economy, customers will be Strategist & 20 20 Lack of resources (budget and time): 52.17% (204) Lack of resources (budget and time): 52.17% (204) more sensitive to price, extend their decision- Web Analytics Difficulty in finding supporting agencies: 3.84% (15) making process, and become less loyal. Consultant. He Difficulty in finding supporting agencies: 3.84% (15) 10 10 Focus on short-term benefits: 25.32% (99) is also Online Focus on short-term benefits: 25.32% (99) Commenting on last year’s survey results, Avinash Kaushik said ‘it Lack of senior management buy-in: 18.16% (71) instructor at The 0 shows that companies and marketers are only thinking of what to get Lack of senior management buy-in: 18.16% (71) University of 0 out of me, the customer’. Have things changed? Maybe not, but at least the bulk of analytical data is coming from a very clever source: British Columbia Figure 30 listening to your customers! Here, we’re reaching a concept very and founder and Agency: Which of the following have been the most significant barriers to common in web analytics: what are my visitors’ goals and objectives? Web Analytics your clients cultivating better customer engagement in the last 12 months? Are they able to achieve it? Were they satisfied with their experience? Advocate at Pressured by the economy, customers will be more sensitive to price, 50 Immeria: an Organisational incoherence, culture or (lack of) will: 32.67% (131) extend their decision-making process, and become less loyal. At the 50 Organisational incoherence, culture or (lack of) will: 32.67% (131) immersion in Lack of skills / experience / understanding: 41.65% (167) same time, quality and desire for ‘simplicity’ is increasing. ‘Simplicity’ Lack of skills / experience / understanding: 41.65% (167) goes far beyond offering a great online experience. Organisations that analytics. 40 Customers or products unsuitable: 5.74% (23) 40 Customers or products unsuitable: 5.74% (23) are embracing the concept of ‘competing on analytics’ to continuously Lack of, or difficulty proving, ROI / business case: 31.17% (125) Lack of, or difficulty proving, ROI / business case: 31.17% (125) measure, analyse and improve all areas of their business will be immeria.net much better positioned than those approaching the web as an online 30 30 Problems with technology: 17.46% (70) Problems with technology: 17.46% (70) marketing silo. Lack of methodology or framework: 25.44% (102) Lack of methodology or framework: 25.44% (102) Ultimately, to nurture customer engagement, you need the budget 20 20 Complexity of organisation: 20.45% (82) Complexity organisation: 20.45% (82) and time to allocate scarce resources. Sadly, unless your organisation Lack of resources (budget and time) : 45.39% (182) Lack of resources (budget and time) : 45.39% (182) is already embracing a customer engagement strategy, this will Difficulty in finding supporting agencies: 7.23% (29) Difficulty finding supporting agencies: 7.23% (29) remain the most pressurised area and it is likely this will worsen 10 10 in the coming months. Focus on short-term benefits: 31.17% (125) Focus on short-term benefits: 31.17% (125) Lack of senior management buy-in: 24.44% (98) Lack of senior management buy-in: 24.44% (98) 0 0 27
  • 29. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Key principles of customer Some client-side respondents felt that their tracking are also widely seen as essential for In summary, agencies said that clients should agencies should show a keener interest in understanding how to manage and improve take the following into consideration when engagement their businesses as a whole, including towards business processes. trying to improve customer engagement: In a free-form question, agencies and clients their core market, products and customers. One respondent mentioned that more time Respondents also mentioned implementing • Increase their understanding of the Analytics and were asked what principles they would urge should be given to talking to (and meeting) Web 2.0 technologies and methods, including changing online environment and realise tracking are also each other to adhere to, in order to improve their customers, in order to really understand working with social networking sites, viral that customer behaviour is shifting widely seen as customer engagement. them. marketing and blogging. essential for • Understand how a customer Analysis of company answers showed that the understanding how Client-side respondents put more emphasis reacts to an online experience following themes emerged: Respondents also felt that simplicity, in to manage and on the importance of financial constraints, terms of focusing on a clean user experience • Increase customer engagement improve business • The need for more focus on (simple, elegant and useful rather than and maintaining a focus on maximising ROI. processes. with the brand or product, to help customer service and the business complex, technical and pretty) was an improve customer loyalty and trust processes which drive this important principle to adhere to. Analytics and • Realise the need to balance hard • Maintaining a focus on demonstrating selling against soft engagement clear return on investment (including “Agencies/media owners still haven’t done enough to effective measurement and tracking • Try to understand the opportunities justify non-ROI channels and [this] will just get worse as to understand what works) that Web 2.0 can bring – and embrace the economy falters.” new media, rather than shy away from • Embracing Web 2.0 technologies it. Don’t be afraid of engaging the (where appropriate) “In the current economy, any marketer not looking customer in new or alternative ways • A clean and simple user experience at where they can measure and deliver quantifiable ROI • Always consider what impact the user is behind the pack.” experience will have upon the business. “Measuring customer engagement is a time-consuming job, and not something that can be done by existing staff in their spare time. You need to hire good specialists, but will soon notice a return on investment.” “Customer engagement initiatives are really just the next evolution of marketing.” 28
  • 30. COMMENT Alex Smith Invest in the right blend Migration of marketing budgets The attitude of respondents towards the In a time of economic downturn many In respect to this, the Third Annual Online idea that customer engagement marketing businesses tighten belts, prepare for Customer Engagement Survey shows that Respondents were also asked to share their is replacing traditional marketing of course the fierce competition to retain their there is no silver bullet for improving customer opinions about the migration of ‘traditional’ depends on assumptions about definitions customers and return to the focus on the online engagement. Excluding email marketing, marketing budgets (for traditional marketing of ‘traditional marketing’ and ‘customer basics of sales, conversion and customer most companies found that a combination of activities) into customer engagement engagement’. Where customer engagement affinity. customer engagement methods worked best initiatives. was equated only with social media without a for them. Many respondents were highly positive about clear ROI, there tended to be more negativity. Those organisations that Looking to the future, the survey highlights the trend towards increased investment in However, there is also an acceptance that invest and make the effort that a focus for many organisations next customer engagement methods including building deeper relationships with customers to define the right customer year will be on engaging on-page interactive Alex is the Creative blogging, forums, social media and viral is increasingly important, and that there has Development engagement blend for their experiences. A similar focus will remain on the campaigns. been a change in how companies need to customer engagement techniques that worked organisation will be those Channel address their marketing activity. Generally, well this year, such as social networks, blogging Although the importance of engagement which we will be looking Development respondents believe that there is still a place and immersive video content. activities was generally recognised by most of Manager for the agency respondents, issues surrounding for traditional marketing activities but that an at, wondering “How do they increased focus on customer engagement is It’s clear that there is no formula to prescribe Microsoft UK. the difficulty of measuring such initiatives do it?” the right blend of techniques to significantly essential. Alex is focused on were raised, alongside the view that for a increase the online customer engagement. measurable ROI, traditional methods could At this time, businesses also keep one eye forming alliances often be preferable for meeting certain out for the organisations that are easily With the toughening economic environment with top web design objectives. outperforming them and their competitors. provoking the tendency to focus on customer and development These annoying companies seem to have engagement basics and reducing costs, agencies and works Some respondents were sceptical about the success when everybody else is failing and perhaps those organisations that invest and value of any type of marketing – particularly make the effort to define the right customer with over 50 UK make light of a poor economic climate social media – where return on investment leaving everybody to wonder “How do engagement blend for their organisation will be web agencies. cannot be directly measured, and pointed they do it?” those which we will be looking at, wondering out that some initiatives would come under “How do they do it?” microsoft.com/web greater scrutiny over the next few months. Often this can be attributed to a simple principle of competition: finding a way to fundamentally change the way “The traditional marketing activities are still best when that business is done. With the online world growing up over the last decade it comes to references, but customer engagement this is nothing new, as customer online initiatives are used to understand the customers better in engagement has changed significantly with the broader sense of marketing.” social networks, blogs and so on. 29
  • 31. “ Good email planning mirrors customer preferences and behaviours. I have observed how Amazon sends fewer emails when I am quiet and then becomes prolific following one of my sporadic ” online spending sprees. Lucy Conlan, Tread carefully – the customer is not always right, p32 Thoughts on customer engagement 31
  • 32. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Lucy Conlan Tread carefully – the customer is not always right When it comes to email, customer centricity doesn’t mean being customer led Do you know what you will be wearing, eating Many businesses and organisations as diverse by signing up to hear about everything, they I would recommend observing customer or reading next week, month or over the next as Argos and the National Trust have made would be receiving one email on average a behaviour following the initial email year? I would anticipate (if you are like me) the process easy by removing choice – asking day. However, our analysis showed that most registration very closely. For all things in you will have only the sketchiest of ideas. customers to sign up to only one list. However, customers would actually purchase across only life, the early stages in a relationship set the Many customers others offer a lot more complex options. The one or two product areas. For most people scene for how things develop and email is no Contemporary living offers so many choices, feel they should sign up for IT business information website, Forester, has therefore, there was a definite gap between exception. For example, if a customer always and while choice is a good thing a lot of over 20 types of emails and The Washington what they thought they were interested in and opens emails for only one or two product areas options can be overwhelming. Sometimes everything so as not to miss out. Post offers 15. what they were actually prepared to buy. out of a total of five they have signed up for, working out what we want now can be hard, let give them the option to reduce the volume alone being asked to anticipate future needs. When signing up for these types of email Why is this a concern? Industry research and of emails received to eliminate the unwanted subscriptions, some customers may feel very analysis shows that the relevancy of content content. You can offer the option to receive It is interesting then, that we ask consumers clear about what they would like, some may is key to customers remaining engaged to make decisions about what types of emails less frequent emails and instead receive make impulsive decisions and some may be with brands and products. Jupiter indicated a ‘catch all’ summary email. they would like to receive from our businesses downright confused. I have observed that in a 2007 survey that 53% of consumers and organisations. For most customers, they many customers feel they should sign up for unsubscribe when the offer and content in But people are a fickle lot and do change their will be asked to state their preference for email everything so as not to miss out. More cautious emails is not interesting. minds! communications early on in their relationship characters may decide to receive a simple with an organisation – either at their first update to avoid being overwhelmed with too What should we do as marketers to help steer Keep observing changes in the relationship – website visit or at the point of first online many communications. customers closer to their true preferences so what customers are interested in may change purchase. that we keep their interest? suddenly or gradually over time. Revise your Communicating the diverse range of email communication strategies to ensure cultural events at Europe’s largest arts and that they have the flexibility to grow and conference centre, the Barbican (barbican. be adapted for the majority of customers, org.uk), produced a significant challenge to particularly the most lucrative ones. For the marketing team. I discovered that most example, if a customer appears to suddenly customers thought they would like to hear become avidly interested in one product about ALL the artforms – music, theatre, area can you increase the volume of relevant visual arts and film. This could mean that they emails? Are there extra incentives that you can would hear about events as diverse as Philip give them such as a special offer or provide Glass concerts to James Bond films to Korean insider information such as advising of a productions of Shakespeare. It also meant that limited amount of stock in the product that they are interested in? 32
  • 33. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Cautious characters may decide to receive a simple update to avoid being overwhelmed. Email checklist Good email planning mirrors customer preferences and behaviours. I have observed Give customers an easy email sign-up process how Amazon sends less emails when I am quiet and then becomes prolific following one Keep observing of my sporadic online spending sprees. changes in the relationship – what customers Amazon is taking the lead from me and Limit the options of emails offered reflecting the changes I make. As a customer, I are interested in may change find it more satisfying to be on the end of their reactive communications than some e-tailers initially suddenly or who appear to have more rigid frameworks. gradually over time. It is much more polite and satisfying for a Observe customer behaviour and then customer to receive appropriate volume and content despite their stated preferences. By increase or reduce email volume to reflect reading the clues correctly we can satisfy our customers while maintaining loyalty and profitability. their usage Lucy is a Digital Marketing Consultant for the cScape Customer Engagement Unit. Lucy helps clients to achieve strategic Offer customers the opportunity to sign objectives and establish robust return on investment models. Her clients include up to specialised lists that they show an the Chartered Institute for Personnel and Development (CIPD), Aviva and Sony. affinity for Exclude customers from email types that they are not opening 33
  • 34. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Clare O’Brien It’s a meatball sundae Jim, but not as we know it How to engage with customers when both they and the online channel are moving at light speed The overwhelming importance of online as an We’re already talking about Web 3.0 – broadly If a brand wants to engage its In a way, these choices describe a brief engagement channel is plainly evident, and the the refinement of the application of all the chronology (past, present and future) of how suddenness (and variety) with which this has technical and social capabilities described by customers online it should... marketers are working to harness online come about is, breathtaking. Web 2.0 into more productive and intuitive a) Pull together all its current marketing channels for customer engagement. Brands A meatball sundae user experiences. We need to start paying material – TV ads, press ads, poster material, investing seriously in online comms are So it’s inevitable that skill competencies are is the unfortunate result of mixing a little more attention to our customers brochures -, and republish it all online so probably producing customer experiences ‘under development’. Our understanding of so we can realistically address Customer described in b) or c) for example Pampers, what customers want online, how this relates two good ideas. people can look at it on a computer. Engagement. Bacardi, Innocent, Olay, Walkers, Persil, to offline channels and how best to deliver b) Do a), PLUS spend a little bit more on Orange etc. Consumers are still being treated absolutely everything may be out of the Start by asking the following question and something digitally whizzy – say an online to offerings from category a) and as yet primordial slime but it’s still evolving. choosing just one answer. game or two, an email newsletter, run some offerings from category d) are rare polls, archive a few PR pieces, set up a So, why worry? We’ll get there in the end, Findings in the 3rd Annual Customer Facebook presence and invite comments and right? Rome wasn’t built in a day. Engagement Survey support this. Clients and anecdotes about the brand. (Remember the old The problem with that approach is that joke? “Enough about me, already. What about agencies more or less correlate when it comes breathtaking speed. You’re building Rome you? Tell me what you think about me…”) to the importance of strategy, the recognition while a competitor over there is already of objective areas of investment (media c) Invest heavily in a purely interactive application, function etc) and awareness of working on their first moon base. And your brand-based comms programme with lots current competencies. Everyone indicates web-using customers? Well, they’re flying at of cool (and expensive) digital stuff the web there’s a long road ahead. That’s why choice light speed to Mars. agency is dying to build. d) is a rarity. We’re still learning how to use online as a comms medium while coming to d) Completely revise its on AND offline comms terms with its functional role as an essential strategy, work out what’s being distributed operational platform (tax returns, online (including services), what its job is, how it’s banking, flight bookings, weekly shopping, being received, consider what people want to congestion charge payments and so on), to access, build the solution, test it, keep asking figure out what engages people. people if it is or isn’t working and why and over time, start to develop collaborative relationships in territory that was strictly us and them in days of yore. 34
  • 35. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 We’re still learning how to use online as a comms medium while coming to terms with its functional role as an essential operational platform (tax returns, online banking, flight bookings, weekly shopping, congestion charge payments and so on). To get there we need to really understand – the positive difference to their life. Useful content. behaviour of people online as well as offline. Content they want to come back to, content It means asking people what they expect and that makes the brand worth recommending to would like, and creating it. It means keeping others. close to people and reaching collaborative conclusions that this service and that product Online needs to be an integral part not just of and this way of doing something is going to marcoms planning, but business planning, so engage people in a long-term relationship of we don’t end up creating meatball sundaes*. genuine value to both brand and customer. We’ve never had the technical means to It also means knowing how to blur divisions engage customers en masse in such a direct between what’s on and offline. way before. There’s no reason we should be expert at this, let alone even really understand The thinking is that people will say what what needs doing. We’re learning at light they’re really interested in online is speed, a new discipline which will rely on doing something. For instance, having the changing the way we do everything. conversation with the brand that helps deliver the next generation of products and services, Clare is a member of the cScape or managing something that makes life easier Customer Engagement Unit in the real world. Something that relates to and co-founder and managing director of who they are, what they need and makes a CDA, the interactive content consultancy. Clare works with Anne Caborn to * “A meatball sundae is the unfortunate result of mixing two good ideas. The meatballs are the foundation, the things deliver a range of content consultancy, we need (and sometimes want). These are the commodities that so many businesses are built on. The sundae toppings creation and training services that (hot fudge and the like) are the New Marketing, the social networks, Google, blogs and fancy stuff that make people all help organisations engage with their excited. The challenge most organizations face: they try to mix them. They attempt to slap new marketing onto old and customers, by providing good online end up with nothing but a failed website.” experiences that meet expectations. Seth Godin, Meatball Sundae: How new marketing is transforming the business world (and how to thrive in it). webwordsworking.com 35
  • 36. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Hugh Gage Meeting expectations is the first step to engaging with your customers Using analytics to better understand customer behaviour One of the difficulties with identifying [online] I think the level of engagement is born In an interesting study undertaken by the If the findings from the University of Warwick engagement is that the definition may change from the level of visitor satisfaction. That is University of Warwick in the UK, the concept research are to be believed, and people make depending on who’s being asked for it. Visitor not to say they are the same, just that the that people differ when deciding what goes associations in starkly different ways, then the or customer engagement is quite an abstract latter comes before the former. The idea of with what was explored. The idea being that process of meeting expectation and engaging Just because they concept. A web analyst may talk about it in the measuring satisfaction is not new. In fact, it some people base their ‘similarity judgements’ visitors is potentially made more complex on achieve their goal context of notional qualitative or quantitative does not mean has been dismissed by some as too limiting by on physicality whilst others base them on the grounds that what’s good for the goose isn’t benchmark measurements, whilst the guy on they did it in a itself, but assuming that many people know themes. For example, many consider a bee to necessarily so good for the gander. the virtual high-street (if you asked for his satisfying way roughly what they want when they enter a site, be more akin to a wasp or a fly, whilst others opinion) might definite it completely differently one who achieves that objective is likely to be may consider it to be more akin to honey. In the Customer Engagement report last year it in the context of the site he’s visiting and his more satisfied than one who doesn’t. This can be related to the issues around was suggested that there is no such thing as an own specific objectives. meeting and managing differing expectations. engagement metric, but that there are a series Of course there are shades of grey here. In circumstances where expectations are of metrics that can be used to measure specific Industry professionals charged with measuring People will persevere with their task even if the not met, the levels of satisfaction and actions which might, in themselves, indicate engagement will come up with formulae and going is unnecessarily tough, and just because corresponding positive engagement are likely some degree of engagement. That leads to the combined metrics. These can be benchmarked, they achieve their goal does not mean they did to be lower. question of where we should be measuring so it can be categorically said that either it in a satisfying way. This being the case, one visitor expectation. Arguably, it should be at “yes we have improved the level of positive would expect the associated data to reflect that In thinking about engagement we are in the actual point where engagement is likely to engagement” or, “er… positive engagement across the whole visitor population, including many respects asking ourselves whether we be engendered. Some possibilities are: seems to be slipping this month”. those who were dissatisfied and gave up. are continuing to meet visitors’ expectations as they are interacting with a brand online. In other words, if steps were taken to improve Because there are so many different points at the quality of the visitor experience, more which expectations can be met, throughout would be able to achieve what they set out to the process it would be difficult to measure do and in a happier frame of mind. This in turn and benchmark engagement using one would reflect well in the data and importantly, or a few metrics. It may be possible to a satisfied visitor is more likely to spread combine associated metrics to produce an the word about a service or website than an index, but equally it might be simpler to unsatisfied one. start by considering the key points at which expectation needs to be met, and attempt to understand how well it is being done. 36
  • 37. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 With purse strings tightening, the web may be seen more than ever as the place to research and get best value. Point of entry or they may have come for a reason unrelated changing economic climate is harder still. to the primary objective of the site. In this Although high street spending has been Where did visitors enter the site, how many case, the standard benchmarks will not be suffering in the UK, online spending still grows. of them stayed and where did they come relevant. With purse strings tightening, the web may be The notion of from? This is perhaps one of the most critical seen more than ever as the place to research time spent on site, points in the whole process. Visitors from pages viewed per Conversion and get best value. As a result, consumer different sources will have different levels of attitudes and objectives are changing, so over visit or recency This doesn’t have to reflect what the site stake expectation, and possibly different objectives the next year the ability to stay flexible in and frequency are holder wants from a visitor, but if people – e.g. research vs. completed action. Knowing nice, but only bear who visit a site knowing what they want are understanding them and associate the right where they came from, which pages the relevance in the [collective of] benchmarks will be crucial. majority entered on and how many of them delighted by what they find, they are more right context. stuck about, tells the site owner if they have likely to take an action that the site owner will When thinking about engagement, it might be done a good job of welcoming the myriad of be happy about. easier to stop trying to pin it down to a specific different visitors to their site. If this initial level definition or set of benchmark criteria, and to of expectation is not successfully being met, Duration consider it from a broader perspective which then the idea of engagement won’t even get allows for differing versions associated to The notion of time spent on site, pages viewed past first base unless it’s a one page site! per visit or recency and frequency are nice, individual cases. Hugh is a member of the cScape but only bear relevance in the right context. Customer Engagement Unit and works Progression They’re like nursery fish metrics: they travel as an independent web analytics and There will always be key areas of content that with the big guys and help out where needed. usability consultant. He works with a are more central to a site’s objective. Reaching The above examples are familiar and the list wide variety of client businesses helping this content, interacting with it and progressing is by no means exhaustive. The intention is drive revenue through improved website if required is another way of judging whether to underline the idea that in thinking about performance. He is also author of the the visitor’s expectations are being met. If engagement, it helps as much to identify the the visitor isn’t in the least interested in the Web Pro Analytics column in the UK’s key areas of expectation as well as the metrics content then they may be in the wrong place, for measurement. .NET magazine. People can be difficult to understand at the engage-digital.com best of times, so catering for tens or hundreds of thousands is hard. Doing so in a rapidly 37
  • 38. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 David Dodd Can rich content mean rich customer experience? How to make cool stuff really work for you 1 The last twelve months have seen a large float, was based almost entirely in the cycle The hook, not the worm: more often than not your rich content growth in the use of rich content. Even in of novelty. For e-commerce to succeed, it took will act merely as the shiny skin of the onion which points your these dark economic times this trend sees no the development of new business structures users at the real purpose of their visit, which is laid out in more sign of abating. So if you’re thinking of diving combined with the re-instatement of some conventional terms. Novelty can headlong into a brave new world of website old business principles. Our conclusions from stifle real growth whistles and bells, make sure you deploy them in favour of the first web bubble should be applied to rich 2 to maximum effect. exuberance and content – don’t expect that placing video, Break the journey: remember you still have a final destination for complacency. flash apps, audio clips and widgets on your your user – usually ‘purchase’, ‘submit’ or ‘join’. Well-placed rich Like any major online advance, rich content website are going to enhance your customer’s is caught in a cycle of novelty. Whilst this is content can act as a great way to hasten and strengthen their journey experience any more than giving them to this destination, cutting drop-off rates in key areas. preferable to the later cycles of invisibility and a banana every time they hit the scroll bar. obsolescence, the bleeding edge is a dangerous place to be. The cycle of novelty can stifle Take video as an example: too many web 3 real growth in favour of exuberance and people EITHER push video as a fix-all golden Active audience alert! Your audience is not passive, so when complacency. Remember how frothy Silicon bullet, OR shy away from it, fearing some producing video content, forget any comparisons to film, television Valley became when e-commerce arrived? golden-bullet-thinking is required to make it or corporate videos. By extension, remember your user’s journey Suddenly we would all be buying toys and pet work hard. These are polarised assumptions is NOT going to be linear, so try to avoid making linear assumptions food online, even if we didn’t have pets or kids. and, of course, neither are true – but that’s (like placing a juicy video interview after 3 minutes of flashy fluff). The idea that e-commerce just ‘worked’, and the cycle of novelty for you. We don’t need In our experience, drop off with web video ranges between fifteen therefore every e-commerce business would a sophisticated model to integrate rich media and twenty five seconds. and harvest their benefits. We just need a bit of lateral thinking upon existing principles, lateral thinking that we’ve attempted to boil down to a handy (but by no means exhaustive) list of five lightweight (yes, the pun on our name is shameless and intentional) tips: 38
  • 39. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 If your web video must be shot on a mobile phone in order to get the killer ingredient, so be it – your user has grown accustomed to watching dogs on skateboards, filmed using a digital watch: they’ll understand. 4 Action (forget lights and camera) Production values say a lot, but Putting this idea to the test, imagine we’re not everything. Appropriate content is more important. So if your going to take the plunge with video for the first web video must be shot on a mobile phone in order to get the killer time. We’ve planned an engrossing five-minute ingredient, so be it – your user has grown accustomed to watching studio interview with our CEO. We can picture dogs on skateboards, filmed using a digital watch: they’ll understand. her/him setting out the company’s stall in 5 glorious homepage Technicolor. Wonderful. New technology old channel. Don’t keep opening new channels for The lights-camera-action moment beckons new technologies. A ‘video and multimedia’ page is not always the as we develop the script, prepare for the way to go – this kind of ‘destination’ approach to rich content won’t shoot, and wonder – ‘should we dress the set make as much as impact as a video placed in closer proximity to with tulips or a solitary white orchid?’. Halt! relevant content. Re-read those lightweight tips! We should be thinking, in this instance, of a series of lean and snappy clips where our plucky Chief Exec, now presenting from a real workplace setting, unpacks the rhetoric in a fun and informal way, talking straight down the camera to the folks David is is a member of the cScape at home. When our user clicks on a video clip – which has been cleverly placed atop a giant Customer Engagement Unit and Creative column of text – they’ll be offered insight, Director at Lightweight Media. He is illustration and charisma, instead of devilish passionate about brand-savvy video and detail (that’ll be where the good old text comes motion content for digital platforms. into play). Looking at this year’s survey results, it is likely lightweightmedia.co.uk that many of you will be wrestling with rich content in the coming year. I look forward to seeing you on the path to whistles and bells wonderland – make sure you avoid that bandwagon of novelty along the way. 39
  • 40. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Do you make your customers feel they are taking part in something special by choosing your products or services? Richard Sedley Can I tell you a story? How to use narrative in online engagement One of the biggest challenges developing “I forgot my wallet today so had to walk to 1. Provide a reason to boast online customer engagement initiatives is the work and arrived late.” Admittedly this is lack of time and attention we can demand not a very inspiring story but it is a story My wife often tells the story of how she went to the last ever Stone from our audiences. Indeed, the reality for nonetheless; while “I woke up this morning, Roses gig. If you press her on the matter she confesses that it was OK, Stories are the most Too often we kid many today is that we live in the fastest paced, went to work and had lunch”, is merely a chain but probably not the best concert she’s been to. What makes her share important way our ourselves that most information rich, attention demanding of events and not a story. The key difference this story more than any other is that it was the final time the Stone mind makes sense we have provided and distracting world that humanity has here lies in that from the first statement you Roses played, which she learnt after the event. Only once the dust had of our world. our customers ever known. This takes its toll on both our can draw a lesson i.e. if you forget your wallet settled and the ringing in her ears had subsided did she understand that with enough she had seen something special. customers and our marketing efforts. Even the you’re likely to be late for work. information to best laid and most value laden engagement Do you make your customers feel they are taking part in something make a decision. plans will come to nothing if our customers Throughout history stories have been one of the best ways to assimilate and pass down special by choosing your products or services? A simple way is giving don’t understand the value of what we’re our understanding of what is valuable or your customers information that confirms they made the right choice. offering, or stick around long enough to dangerous to our kind. As a result stories have If your current customers are potentially your best sales force, why not experience it. become one of the key organising principles give them the tools to spread the word? Step forwards one of the oldest techniques for of the mind. (The FOXP2 gene is thought to Was your event the best attended, the first or the last? Do other engagement ever used, storytelling. make narrative possible, supporting the idea well-respected companies or individuals use your product? Select facts that human brains are actually hardwired for At their simplest stories are merely retellings that confirm your customer’s wise decision in choosing you and help to stories). Our brains are now conditioned to of a cause and effect relationship. For example, ensure that others will get to hear about that choice, too. seek out and identify stories wherever they may lurk. Even where stories don’t really exist we try to find them, to rationalise and explain the actions of others and ourselves. So how can we use stories within our online customer and employee engagement strategies? 40
  • 41. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 In the absence of an explanation customers will write their own stories and we will have squandered an opportunity to help craft those stories to our advantage. 2. Tell them why 3. Show them the consequences Last year I placed a particularly nice, blue, Donna Karan, silk and mohair Behind every online action there is an off-line consequence. For every suit on eBay – it failed to meet my reserve. After resubmitting the suit, purchase of a toaster there is a full stomach in the morning, for every this time explaining that due to marital bliss and a spreading waistline book bought there is a person reading on a commute to work, for every I was reluctantly parting with my wedding suit, it exceeded my estimate. course attended there is a new friend met and for every article read there is a water cooler moment. By helping our customers understand Too often we kid ourselves that we have provided our customers with the consequences of their online actions we are helping them write enough information to make a decision. We load our web pages with happy endings for their stories. facts and stats, features and benefits, functions and costs. But how often do we explain the ‘why’ behind these details? The two most powerful, and least contrived, ways we can do this online are through the use of images/video and user generated content. Visuals • Why are we providing this service? showing real usage of our service or product allow customers to imagine • Why did we write this? themselves at the end of the customer journey, ‘pre-purchase’. Allowing other customers to share their stories similarly permits people an insight • Why are we selling this? into the future. Richard is the Director of the cScape • Why is it this price? Stories are the most important way our mind makes sense of our Customer Engagement Unit (CEU). In the absence of an explanation customers will write their own stories world. As that world becomes more hectic and as greater demands and we will have squandered an opportunity to help craft those stories to are placed on us so stories become an essential way for us to navigate our advantage. these demands. Our customers are already writing these stories for richard-sedley.com themselves; it seems churlish not to provide the characters, scenery and script to help them. 41
  • 42. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Today, websites have to work much harder to prove that they are relevant enough to appear at the top of the search results. Amanda Davie But I still haven’t found what I’m looking for Customer engagement starts with search While Google celebrated its 10th birthday In the context of Internet information retrieval With any great power comes great framed in an accessible and succinct way. It is this year, analysts have been reflecting on the relevance has come to mean finding websites responsibility. Google is forever enhancing the responsibility of marketers and publishers huge impact that the search behemoth has that have the information we’re looking for. its algorithms to ensure that it delivers the to ensure they produce engaging and easily had on the entire Internet landscape. Google’s In actuality this means websites which match most relevant results. While this job may get accessible content. The old adage of “give the influence on the digital economy has been how we articulate or describe what we’re easier over time as Google gets cleverer at the customer what they want” is as relevant today equally impressive: Google has the ability to looking for. Most of us have grown accustomed same time the search engine index is growing, as it ever was. make – or break – an online business through to thinking in keywords when conducting making the competition stronger – today its ability to drive customer acquisition and, an online search. A consumers need such as websites have to work much harder to prove Search is the mouth piece of marketing. in so doing, has created many hundreds of “I need to buy my niece a gift for her third that they are relevant enough to appear at the Where else in the marketing mix do consumers millionaires in the ecommerce space alone. birthday and get it in the post quick so that she top of the search results. Google cannot meet prescribe – or describe – what they want, receives it in time because she lives abroad” customer expectations on its own. whether this is a need for information, or Yet it is Google’s influence on consumer is condensed into a short sequence of words a brand, product or service? Understanding behaviour where its power is most evident. Google isn’t the Google’s job is made far easier by publishers search behaviour and the principles of search such as “children gifts overseas postage”. Yes, search engines per se have fundamentally only one with a who analyse search behaviour when engine relevance can really help to shape Boy! Google certainly has its work cut out changed the way in which we navigate the responsibility to developing their content strategies. By tailoring a range of customer engagement strategies: in trying to decipher which websites to suggest Web, but Google’s dominance of this space meet the needs of your website content and copy to the language content, usability, accessibility, conversion its users. in response to this need. has moulded the way in which we articulate (or keywords) used by prospective customers and loyalty. Google isn’t the only one with our information needs, it has shaped our We place a huge amount of trust in Google you are already driving engagement. An a responsibility to meet the needs of its users. expectations, and it has dictated the way to prioritise its web results according to our example: among SEO (Search Engine By helping Google to give its users what they in which we find what we are looking for on individual preferences. Often this is a big ask Optimisation) specialists, there has been are looking for, marketers can, in turn, convert the web. when all we offer up to help Google decipher a return to advocating the importance of these users into customers. our needs is two or three keywords. Plus, as metadata – not because optimised meta data creatures of habit, we increasingly turn a blind influences your ranking, as it arguably once eye when Google suggests websites which did, but because within the metadata are the weren’t necessarily exactly what we had in words that the user first claps eyes on in the mind. Google isn’t, after all, a mind reader! search results. If the words they see are the All that said, Google does have the power to words they searched on, they are far more satisfy our information needs. likely to be enticed to click through to your website. Fundamentally, Google wants the same thing as its users: the best possible information 42
  • 43. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Can you imagine sitting down with someone you just met and showing them photos you took on a night out last week? Lynda Rathbone Oh the humanity! Maximising social media insights As 2009 is just around the corner, I find myself While this isn’t new information, I do think still talking about social networking. Last year there is a new, interesting user humanisation I faced my fears, set up a Facebook profile, trend that is developing, and that is still to be and I have to say, it hasn’t been that bad. recognised. Instead of thinking of this as a My main concern about going on Facebook ‘bad thing’, I think the blurring of these lines was using my real name, as I didn’t want my can actually help us understand each other professional and my personal lives to be woven better, work together more effectively and together. This has now officially happened. create better user journeys, both on and offline. The first thing new friends, work clients or Gaining real, personal customer insight is now colleagues do (including a whole slew of folks just a click away in many cases, and after all, I’d forgotten about from past lives) is look you people know what they’re doing when they up on all the sites, send along a friend request post this information publicly so why not use or professional network link, and then proceed it to better inform the experience you deliver? to barrage you with a whole bunch of personal If clients are doing this to me, I definitely want and professional updates. And we’ve only just to return the favour. Amanda is a member of the cScape met! This would never happen offline. Can you By searching across social networks, blogs Lynda is a member of the cScape imagine sitting down with someone you just Customer Engagement Unit and an and online communities, you can compile Customer Engagement Unit and the met and exchanged business cards with, and independent Search consultant. She showing them photos you took on a night out a much more interesting and detailed set of Managing Director of Four Square Media. has over ten years’ experience in digital last week? personas and customer insights, and perhaps media and has worked for market uncover interesting audience segmentation foursquaremedia.net data that you would never have had access leading agencies including Outrider and to before. Data on users is out there – from i-level, where she was Head of Search for the users themselves – in a way that it’s never four years. been before. I say let’s join Google and start mining. The opportunity is there to humanise the user experience and I can’t wait to get started. Oh and by the way, feel free to go to my Facebook page and add me as a friend. Just don’t look at the party pics. 43
  • 44. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 With more customers accessing the web through different devices, it’s worth also reviewing your ‘Technographics’ or ‘Webographics’ which show the devices used by site visitors. Dr Dave Chaffey Learning to slice and dice Your options for engaging online customers through segmentation Since digital channels offer fantastic 1. Demographic segmentation resolution suggests increasing popularity of registering or buying can be readily targeted opportunities for segmenting and targeting mobile devices such as the Blackberry, you through email. Car manufacturers like online audiences it was good to see a question Demographic segmentation is the familiar may consider repurposing content for this Mercedes-Benz and Renault evolve messages on segmentation in this year’s engagement audience breakdown based on profile audience or offering a mobile platform. delivered to newsletter subscribers according Targeting according survey. characteristics such as age, gender, geographic to how long they have been on the list. to customer behaviour is location or social group. Of course this can 2. Lifecycle stage We were keen to find out which techniques only be readily identified for registered site We are also starting to see more use of web were most popular for different points in the arguably the most Establishing the visitors’ degree of engagement personalisation and merchandising based on powerful approach users or email subscribers and potentially used customer engagement lifecycle from initial to deliver relevant messages where profiles can over time is where more sophisticated and lifecycle position. For example, Thomas Cook for gaining engagement and conversion through ongoing be accessed in real time. typically more costly targeting approaches have described how they have introduced engagement. relationship building. In this commentary I come into play. You can start by distinguishing a new platform, based on ATG technology, will assess the survey’s findings and give some Unsurprisingly, this was one of the most between first time and repeat visitors; how which offers deep personalisation integrated examples and practical tips on how you can popular approaches to segmentation does their content consumption vary when with different search journeys, video, maps and review or refine your own approaches to online identified in the survey, with around 45% you create a segment filter on number of visits consumer reviews6. segmentation and targeting. using it currently. But this is surprisingly low with your analytics tool. If you’re using Google since the most successful tool for customer Analytics, you can also get a feel for the typical 3. Value The framework I will use for this review engagement was email newsletters which frequency of return visitors through the Visitor is based on the 4 main options for online were rated positively by 69% of respondents. Loyalty and Visitor Recency reports. Segmenting by value was also revealed as a targeting covered in the fourth edition Email newsletters or solus e-blasts lend popular approach in the survey. Best practice of my book Internet Marketing: Strategy, themselves to targeting, but perhaps this low Many have successfully used the presence or is to segment on current and future customer Implementation and Practice. figure reflects the lack of refined multichannel absence of a cookie to use different content value. Speaking at the E-consultancy Online communications strategies in many companies. or design to engage first time visitors. Site Marketing Masterclass, Chris Poad of retail visitors who progress through the lifecycle by group Otto gave some great examples of the With more customers accessing the criteria that can be used for targeting by value. web through different devices, it’s worth Indicators for evaluating customer quality also reviewing your ‘Technographics’ or include order value per received catalogue; ‘Webographics’ which show the devices used order value per season; gross margin in % of by site visitors. Web analytics tools will show net sales and returns in % of order value while you screen resolutions and browsers used by indicators for customer potential include last visitors which should inform decisions about date of purchase; number of active seasons; the extent to which you support different channel usage score and number of different platforms. If you find that your screen product categories. 44 6 www.e-consultancy.com/news-blog/366311/q-a-thomas-cook-s-russell-gould-on-improving-conversion.html
  • 45. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Car manufacturers like Mercedes-Benz and Renault evolve messages delivered to newsletter subscribers according to how long they have been on the list. 4. Behaviour It’s good to see that nearly half of respondents are using behavioural techniques, but there Targeting according to customer behaviour is clearly potential for doing this smarter, is arguably the most powerful approach for particularly if the tools vendors improve their The beauty of gaining engagement because communications approach. these techniques are in context of known interest and intent. online is that the recency, frequency We have already touched on behavioural Bringing it all together in and latency can be approaches when we discussed lifecycle and a persona value based segmentation. Another form of assessed for any online interaction. behavioural segmentation which was rated When you have reviewed all your popular was segmenting by referrer (or segmentation options, why not summarise channel preference), so for example, reviewing the main customer types through a web design degree of engagement with visitors referred by persona? Creating personas of site visitors is Google AdWords differently from other online now an established technique for increasing or offline media channels. the usability and customer centricity of a web site. Personas are essentially a ‘thumbnail’ More advanced behavioural approaches description of a type of person. Effective Dave is a member of the cScape Customer Engagement Unit and Director of combine analysis of recency, frequency, personas can be developed by combining any Marketing Insights Limited. He has been recognised by the Chartered Institute of purchase category and monetary value (RFM). of targeting criteria I have discussed in this Marketing as one of 50 ‘gurus’ worldwide who ‘have shaped the future of marketing’. I find that many marketers have not considered piece. RFM segmentation approaches since they are seen as only relevant to retailers or loyalty The author of specialist E-consultancy best practice guides on E-marketing tactics like schemes. But the beauty of these techniques SEO and PPC, Dave has also written a number of best-selling books, including Internet online is that the recency, frequency and Marketing: Strategy, Implementation and Practice, now in its fourth edition. latency (average interval between actions) can be assessed for any online interaction whether davechaffey.com it a site visit, purchase, posting in a community or a click on an email. 45
  • 46. Winners and Losers in a Troubled Economy: Read the previous reports online How to engage customers online to gain competitive customer-engagement.net advantage Martyn Perks & Richard Sedley winners-and-losers-in-a-troubled-economy.com 46
  • 47. The cScape Customer Engagement Unit (CEU) works to help people maximise the returns on their digital investment. If you’d like to hear some of our stories, tell us yours, or simply share some ideas, get in touch. To set up a meeting to discuss your customer engagement strategies, contact Sarah Woodbridge on s.woodbridge@cscape.com or call +44 (0)20 7689 8800 If you’re a digital specialist or company specialising in online customer engagement and would like to have a chat about joining the CEU, Join the gang contact Richard Sedley on r.sedley@cscape.com or call +44 (0)20 7689 8800 customer-engagement-network.com Visit us at cscape.com to sign up for our regular newsletters to keep you up to date with the latest acute intelligence. 47
  • 48. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Survey partners Making the most of your potential China Bridge International is a leading design Closed Loop Marketing is a boutique connections, avantless enables business management consultation company. Our marketing agency based on Northern development strategies in the service industry services include innovation management, California, USA. Drawing from the latest through innovation. design research, resource connections, and research and years of practical experience, training and workshops. We are privileged to CLM’s team of senior experts employ a suite Changes in business development and work with some of the best companies in the of services to create actionable, real-world customer environments are root causes for world – from the largest multinationals to the solutions designed to help clients improve the companies to accept customers as deeper smallest creative enterprises. Clients include return on their web investment. influencers at the heart of new value creation GM, Lenovo, Continuum, Goodbaby, Huawei, processes. New paths emerge driven by open iF, IDEO, Siemens, Samsung, and Toyota. Even CLM approaches online marketing holistically, networks and transparent connectivity where the bible of the business world, Fortune China aligning its recommendations and actions with users, service/product providers and social magazine, comes to us for help selecting its each client’s business goals in order to drive agents create new models of collaboration. annual design award. better online business results: more website Avantless aims for leveraging authenticity into traffic, better website conversion, higher sales, service innovation as new growth strategies www.shcbi.com more leads, less cost and greater ROI. for differentiation and success in the network economy. CLM works with Fortune 500 as well as smaller, emerging organizations within www.avantless.com multiple industries and across business models. CLM’s individual services include Paid Search (PPC), Search Engine Optimization (SEO), Conversion Optimization, Speaking and Training, and Strategy and Consulting. www.closed-loop-marketing.com 48
  • 49. The annual Online Customer Engagement leadership and enthusiasm continue to ensure which is undeniably important to virtually Report, now in its third incarnation, generates that the survey itself is thought-provoking, everyone organisation. more interest than any other survey-based whilst also generating data and findings research published by E-consultancy, in terms which are insightful for businesses across It gives an important strategic context and of both number of survey respondents and a range of sectors. framework for organisations who want to the extent of PR coverage. understand what levers they need to pull and As the research has become more established, what tangible benefits they might reap as It is heartening that organisations of all an added bonus is that we can now include a result of customer engagement initiatives. shapes and sizes are hungry for knowledge related opinion pieces from a broad range of about how they can boost their business contributors who are unified by their passion The gloomy economic prognosis for 2009 performance through better and deeper for this subject. will ensure that this topic continues to grow customer relationships. its profile because companies will need to A reason for the broad appeal of this research focus more than ever on making sure they We are delighted to be working with cScape is that it brings together various components understand how customer behaviour is on this project because their thought of digital marketing within a single theme changing so they can engage more effectively. Linus Gregoriadis Head of Research, E-consultancy www.e-consultancy.com Repeated interactions that strengthen the emotional, psychological and physical investment a customer has in a brand (product or company). Definition of customer engagement