4th Annual Online Customer Engagement Survey Report 2010

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 Econsultancy’s reports, events, online the Peer Summit, roundtables, briefings and cScape is an award-winning, full service digital CIM’s Course Director for Social Media, as part resources and training help an international a range of social events. agency that ranked number 14 in NMA’s design of its exceptionally qualified team. community of more than 80,000 digital and build 2009 top 100 poll. Based in the UK marketers make better decisions, build Econsultancy also runs the prestigious but operating internationally, cScape is part of We’ve won multiple awards for our information business cases, find the best suppliers, look Innovation Awards where pioneering work the AIM-listed cScape Group Limited which architecture, user experience and creative smart in meetings and accelerate their careers. carried out in the world of digital marketing has over 110 staff. We offer digital marketing/ work. In addition, cScape is technically strong and e-commerce is judged by an international customer engagement campaign strategy, across the board, with particular expertise Econsultancy, which has offices in London panel of experts from companies themselves planning, management and training (including in Microsoft SharePoint technologies, and New York, is an award-winning online known for innovation. social media governance); graphic design and holding Gold Partner status with a Microsoft publisher of reports covering best practice, rich media services including app development Most Valuable Professional as our Chief user experience benchmarking, market data, The Econsultancy site now attracts 175,000 Technical Officer. unique users per month where they access and video, and technical health checks/build trends and innovation, and supplier selection. (intranet, extranet, website and mobile) for Econsultancy is an invaluable resource for research, read the blog and take part in We’ve an exciting programme of events discussions in the forums. And as a portal to customers such as Aviva, Sony, Barclays, the planned for 2010 and hope you will be able internet professionals who want practical British Council, ExxonMobil, Tesco, Carbon advice on all aspects of e-business. the digital marketing community, Econsultancy to join us. For more information about these members can also link up with other members Trust and the Chartered Institute of Personnel events, cScape’s CEU and other services Econsultancy also operates a highly popular and digital suppliers through the directories, and Development. contact Theresa Clifford: t.clifford@cscape. training division, used by some of the world’s as well as find a new job or new digital talent We practice what we preach in terms of com. most prominent brands for staff education, using the job listings. engaging our own clients, many of whom have both in-house and via public courses. Some of Econsultancy’s members include: retained cScape to help them with their digital Find out more about cScape: Econsultancy provides training across all marketing for many years. So what made these Google, Yahoo, Dell, BBC, BT, Shell, Vodafone, www.cscape.com areas of digital marketing and at all levels customers choose us? The main reason cited Yell.com, Oxfam, Virgin Atlantic, Barclays, www.customer-engagement.net from one-day courses to an MSc in Digital is our unique blend of strategic, technical and Marketing. Carphone Warehouse, IPC Media, Deloitte, T-Mobile and Estée Lauder. creative services, combined with our ability to Follow us on Twitter: In addition, Econsultancy hosts more than 100 draw on multi-disciplined engagement experts @cscape conferences and events a year, including the Join Econsultancy today to learn what’s from around the globe. @cscapeCEU Online Marketing Masterclasses, the annual happening in digital marketing – and what works. Call us to find out more on +44 (0)20 Our Customer Engagement Unit (CEU) counts Join the debate: Future of Digital Marketing Conference, Dr Dave Chaffey, recognised by the Chartered 7269 1450 (London) or +1 212 699 3626 www.customer-engagement-network.com (New York). You can also contact us online. Institute of Marketing (CIM) as one of the 50 marketing ‘gurus’ worldwide that have shaped www.econsultancy.com digital marketing, and Richard Sedley, the 2

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 4th Annual Online Customer Engagement Report 2010 3 Introduction 4 Comments on the findings Executive summary and highlights 7 Andy Beal 13 Ron Shevlin, Monica Hart 14 Methodology and sample 9 Dr Dave Chaffey 17 Findings 12 Rob Killick, BJ Cook, Guy Stephens 18 Customer engagement strategy 12 Linus Gregoriadis 19 Importance of customer engagement to the organisation 12 BJ Fogg 20 Interest in online customer engagement 12 Adam Hibbert, Amanda Davie 25 Attributes of an engaged customer 15 Theresa Clifford, Paul Blunden 26 Success of customer engagement strategy 16 Jay Cooper 29 Tactics, behaviours and attitudes 16 Jim Sterne, Pete Mortensen 30 Improving customer engagement 16 Rich Wand, Bruno Ancona Lopes 31 Investment to drive increased customer engagement 20 Eric T. Peterson 33 Changing behaviour and attitudes 20 Hugh Gage, Janet Grimes 34 Enterprise 2.0 22 Martha Russell, Ian Jindal 35 Adoption of technology for product development and innovation 22 Clare O’Brien, David Dodd 36 Adoption of technology for internal (employee) communications 23 Marc Sibley, Aurélie Pols 37 Adoption of technology for customer service improvement 23 Zia Zareem-Slade, Steven Woods 38 Resourcing social media and customer engagement 23 Stéphane Hamel, Lucy Conlan 39 Barriers to cultivating customer engagement 27 Becky Caroll, Richard Sedley 40 Mobile 28 Investing in the mobile channel 28 Survey partners 41 Mobile and customer engagement strategy 28 Using mobile marketing to build engagement 29 Barriers to a more focused approach to mobile 30 Mapping and measurement 32 3

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 The definition of customer engagement: Repeated interactions that strengthen the emotional, psychological or physical investment a customer has in a brand (product or company). Introduction Welcome to the 2010 Online Customer Predictably the big ‘winners’ in this report customer service and employee engagement, So it is slightly surprising that the number Engagement Survey Report. Now in its are social media and micro-blogging tools all areas of increasing importance to customer of companies planning to step into mobile Organisations fourth year, this annual report has become like Twitter. These are the technologies engagement. customer engagement is not larger. to need focus on a regular benchmark for organisations that companies see as worthy of increased quality, simplicity wanting to assess their customer engagement attention and financial investment. If 2009 was If I were to make any recommendations based More than any other channel, mobile has and customer on the results in this year’s report it would be strategies. With over 1,000 participants the the year that saw the main-streaming of many the ability to connect emotionally with us. service in the next that organisations need to focus on quality, The mobile phone is omnipresent and highly survey continues to be the largest of its type of these social technologies, then 2010 will be 12 months. anywhere in the world. Indeed this year the the year that social technologies get serious. simplicity and customer service in the next personal – I spend more time with mine than survey gained the largest number of non-UK This will manifest itself not only in terms of 12 months. These are three key areas that can I do my family. This poses both challenges participants in its history. marketing investment, but also in the way foster an understanding of value and emotional and opportunities in equal measure. While they begin to impact the internal structure and connection within the customer. 2010 appears to be the year when many more The number of you who consider customer culture of organisations both large and small. organisations are preparing to get their toes engagement ‘essential’ to your organisation Since the conception of this survey we have wet with mobile, it appears most are waiting continues to grow slightly, but what I feel The reorganisation required to take advantage stressed the importance of an emotional for someone else to start swimming. If that’s this year’s survey reveals best is the extent to of these social technologies should not be connection as part of engagement – our you, you’ll probably have a healthy lead by the which the last 12 months have changed how underestimated. It is worth recognising that the definition has it at it’s heart (see above) – and time the others dive in. we will do business in the future. In many introduction of these tools is unprecedented. this has never been more important than today. ways this was to be expected. The world Technologies like fax, email and the telephone Indeed ‘strengthening emotional investment in What the 4th Annual Online Customer has just experienced the toughest economic had all first established themselves (and your brand’ showed the biggest year on year Engagement Report reveals to me is that we environment since the 1930s and any company their associated behaviours) within business increase of all the reasons why organisations find ourselves firmly placed in an interregnum not looking to change the way they operate is before making their way into society as are interested in customer engagement. – a period between the close of one era of likely to be suffering the consequences already. a whole. Today we are seeing the reverse business and the opening of another. This isn’t Underlying much of this year’s results is as enterprises struggle to adjust and embrace something created by the current troubled But how to change and into what, have been an expressed desire to get closer to our the pre-established attitudes and behaviours of economy but what our economic woes have the hardest questions for most organisations. customers, to understand them better and to customers and employees while trying to bring done is focus our attention on the changes become a more integral part of their lives. these social tools ‘in-house’. happening. This year we’ve added a new section to the While customer engagement is no panacea report entitled Enterprise 2.0. This touches on for a troubled economy, or changes within the issues of product development and innovation, 4

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 business environment, what it does offer is It just remains for me to thank all those who’ve grounding – an opportunity to stabilise and continued to help make this a successful reap the benefits of increased predictability report. in our customer relationships. As I wrote back in 2006 in the introduction to the first To all those who took the time to complete of these surveys; ‘customer engagement this, the longest survey to date, we salute you. is the best measure of current and future Thanks to Linus and Aliya at Econsultancy – performance; an engaged relationship is great job guys. To our partners who promoted probably the only guarantee for a return the survey around the globe, particularly on your organisation’s or your clients’ Bruno. To our report contributors – over objectives’. 30 experts this year – thanks for sharing your time and intellect. And finally to my colleagues There are many interesting observations at cScape: Monica, Theresa, Sal, Sarah A and insight within this report, probably and Rob. “With the latest set of results we can more than any previous report we see the clear, common benefits that have produced. I really do hope you find it useful and stimulating, and look engagement can offer” Richard Sedley forward to any feedback you care cScape Customer Engagement Director Dr Dave Chaffey, p17 to share. E: r.sedley@cscape.com T: @richardsedley 5

Executive summary and highlights 6

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 Executive summary and highlights This is our fourth annual Customer Engagement Report. There were • The tactics which have come to the forefront for driving customer • Only 17% have processes and workflows in place to encourage staff more than 1,000 respondents to our research request, which took the engagement are social networking and Twitter activity. Presence use of social media, and only 13% actually incentivise staff to use form of an online survey sent out in October 2009. on social networks has almost doubled from 23% to 44%, while the social media to engage with customers online. percentage of respondents saying that micro-blogging (i.e. Twitter) has tangibly improved customer engagement has, remarkably, gone up Mobile This is a summary of the key findings: five-fold (from 7% to 35%). • A large proportion (41%) of companies are not planning any • The majority of companies (61%) say that they will increase investment at all in the mobile channel in 2010, and a further 49% are Customer engagement strategy planning only limited investment. Only 11% are planning to invest investment in their social network presence and 44% will spend more • The proportion of company respondents who regard customer on micro-blogging. significantly but this increases significantly for the largest companies. engagement as essential for their organisation has increased to 55%, • When it comes to building customer engagement, companies have up from 52% in 2008 and 50% in 2007. The number of agency • Intolerance of poor customer service is the type of behaviour or attitude that company respondents are most likely to expect to increase over been quickest to use the mobile channel for increased dialogue with respondents who regard this as essential for their clients has jumped customers. A fifth of company respondents say they are doing this and significantly from 43% to 55%. the next year. Well over half of respondents (61%) say that they expect people to become less tolerant about poor service, and this percentage a further 36% say they plan to do this. • Customer engagement is seen as being about creating relationships has almost doubled since last year. • A third (34%) of companies are planning to create applications for which result in value both for customers and for companies. mobile phones, in addition to the 16% who say they already do this. Company respondents are most likely to indicate that increasing Enterprise 2.0 long term customer value (37%) and increasing value delivered to the • Just over a third of organisations (36%) say they are using social • Nearly two thirds of companies (62%) have no plans for mobile customer (35%) describe their interest in customer engagement most networks and email newsletters for product development and commerce. Only 10% of companies are using transactional mobile appropriately. innovation but only a quarter (25%) of companies tap into user ratings activity to build customer engagement. A further 28% are planning to and feedback. Even fewer (17%) are using discussion forums to feed do this. • The biggest area of increased interest since last year is in strengthening emotional investment in your brand. The percentage of respondents into development. • Companies who are either using or planning to use mobile as part saying their interest in customer engagement relates to this has • Many companies are also neglecting to share information internally. of their customer lifecycle marketing, for broader CRM, for user- jumped from 25% last year to 31%. Very small percentages of respondents are using employee blogging generated content or location-based marketing are also in the minority. • Compared to last year, respondents report increased participation in (17%), internal social networking tools (13%), intranets (10%) or social • Companies generally attribute their inertia when it comes to online communities or support groups (+9%), giving regular feedback knowledge sharing (8%) to help drive development and innovation. integrating mobile to a lack of resources (51%), although there are (+8%) and participation in innovation and design (+7%). Marketers are • Email newsletters and internal social networking are used by around a other widely cited reasons including lack of skills/experience/ benefiting more from the relationship-building aspects of customer third of companies (32%) for internal communications. understanding and lack of business case. engagement rather than being exclusively focused on the more directly financial benefits such as sales. • The increased profile of social media is also reflected by the fact that a Mapping and measurement third (34%) of companies have increased their social media budget in • Web analytics play a pivotal role in gathering intelligence, with over Tactics, behaviour and attitudes the last 12 months. half of companies surveyed (51%) saying this is useful for online • As was the case last year, email newsletters are the tactic most likely • Companies who urge their staff to engage with social media are still engagement. to have resulted in a tangible improvement to an organisation’s online very much in the minority. Some 29% say senior staff members are customer engagement. Two thirds of respondents (67%) indicate that • Despite the growing awareness around social media metrics and urged to use social media to build customer dialogue, while a fifth measurement, only a fifth of companies (21%) say buzz monitoring is regular email bulletins have had a positive effect, down very slightly (19%) say this applies to junior staff. from 69% a year ago. useful for engaging customers online. 7

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 “Mobile is a healthy media, yielding good results for those who know how to use it.” Jay Cooper, p29 Methodology and sample 8

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 Methodology and sample Methodology Figure 1 Figure 3 Which of the following best describes your job role? All respondents: In which business sector is your organisation? This is our fourth annual Customer Base – all respondents (1198) Engagement Report. Over 1,000 respondents 20 Fina took part in an online survey conducted over 33% of respondents Part of an in-house team a five week period from October 2009*. are client-side, (client-side) 33% Ret Econsultancy and cScape promoted the while 55% are External agency / supplier survey via Twitter, Linkedin, Email newsletters agency-side. / consultant 55% Pub and other channels. The incentive for taking Other 12% 15 part was access to a complimentary copy Trav of the report just before its publication on Econsultancy. Tele cScape and Econsultancy would like to thank Cha 10 those who took the time to complete the 20 Financial services: 16% questionnaire. If you have any questions about Ent the research, please email Econsultancy’s Retail: 10% Research Director, Linus Gregoriadis (Linus@ Publishing: 8% Pub econsultancy.com). Figure 2 15 5 Travel: 7% Con What is your annual company turnover? Respondent profiles Telecoms / Mobile phones: 6% 10 Charity: 6% Oth The vast majority of survey respondents work 50 50 Companies Companies Entertainment: 4% either for in-house teams (i.e. client-side Pro organisations), or for external agencies 42% 42% Agencies Agencies 0 Public Sector: 4% (including consultants and technology 40 40 5 Consultancy / Marketing Services: 4% Hea suppliers). A third (33%) of respondents work 20 Financial services: 16% Other manufacturing: 3% client-side, while just over half (55%) are Aut 30 28% agency-side. 30 27% 28% Retail: 10% Property: 2% 27% 0 Publishing: 8% Healthcare: 2% FMC For the purposes of this report, we have 15 carried out separate analysis for both these 20 18% 18% Travel: 7% Automotive: 1% 20 18% 18% Gam groups and the distinction is abbreviated 14% Telecoms / Mobile phones: 6% FMCG / CPG: 1% to ‘companies’ (including not-for-profit 14% 10 9% 10% 10 Charity: 6% Gaming: 0% Pha organisations) and ‘agencies’. 9% 10%7% 10 Entertainment: 4% Pharmaceuticals: 0% 3% 7% Util In total, 401 company respondents took Public Sector: 4% Utilities / Energy: 0% 0 3% part in the survey, compared to 657 agency < £1m £1-10m £10-50m £50-150m 5>150m Consultancy / Marketing Services: 4% participants. Company respondents were 0 < £1m £1-10m £10-50m £50-150m >150m Other manufacturing: 3% asked to comment in respect of their own Property: 2% 0 * Clicktools was used for the survey. 9 Healthcare: 2% Automotive: 1%

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 organisations, while agencies were typically Figure 4 Figure 5 asked to comment in terms of a typical client. What types of business have you focused on in the last Company: In which country are you (personally) based? 12 months? Annual company turnover Figure 2 shows the range in the size of 60 58% UK 71% Companies participating organisations, as defined by Europe (outside UK) 6% company turnover. Approximately a third of 52% 58% Agencies 60 North America 9% Respondents are Companies respondents (32%) work for companies with 50 spread across 52% Agencies Other 13% annual revenues of £10 million or less. numerous 50 Over half of companies (56%) taking part have business sectors or 40 a turnover of more than £10 million, of which verticals, reflecting 40 the universal 31% more than a quarter of respondents (28%) 30 work for companies with a turnover in excess importance 31% of customer 30 22% of £150 million. 20% engagement. 20 18%22% 20% Agency respondents typically work for smaller 20 18% organisations. Some 42% of responding 10 agencies have a turnover below £1 million. 10 Business sector 00 Figure 6 Mainly B2B Mainly B2B Mainly B2C Mainly B2C Both B2B and and Both B2B Agency: In which country are you (personally) based? Respondents are spread across numerous B2C equally B2C equally business sectors or verticals, reflecting the universal importance of customer UK 51% engagement. The best represented sectors are Europe (outside UK) 11% financial services (16%), retail (10%), publishing (8%) and travel (7%). Geography North America 10% Other 29% The majority of respondents (71%) in this survey are UK-based, but this Business focus is very much a global survey. Some 9% of respondents are located in North America, and 6% are based in mainland Europe. The majority of companies in this survey (52%) are B2C-focused businesses, whilst 58% of ‘Other’ countries or regions represented include Brazil, India, Australia, agencies have a B2C focus. Just under a third and South-East Asia. of companies (31%) and a fifth of agencies (20%) have a B2B focus. Half of the agency respondents are based in the UK (51%), with a higher proportion of respondents (29%) coming from the US, Europe and beyond. 10

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 Findings 11

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 Findings Customer engagement strategy Interest in online customer engagement Figure 8 Company: Which of the following best describes your organisation’s interest in online As was the case last year, it is clear that Importance of customer engagement customer engagement? customer engagement is seen as being about The proportion of company respondents who creating relationships which result in value 40 40 Increasing long-term customercustomer value: Increasing long-term value: 37% 37% regard customer engagement as essential both for customers and for organisations. Increasing value delivered to the customer: 35% Increasing value delivered to the customer: 35% The biggest shift 35 35 for their organisations has increased to 55%, since last year Company respondents are most likely Deepening and enriching your product or service offering: 31% up from 52% in 2009 and 50% in 2008. More 30 Deepening and enriching your product or service offering: 3 is the emphasis to indicate that increasing long-term 30 Strengthening emotional investment in your brand: 31% striking is the significant jump (from 43% to Strengthening emotional investment in your brand: 31% placed on customer value (37%) and increasing value 25 Gaining customer insight: 29% 55%) in the number of agency respondents strengthening delivered to the customer (35%) describe 25 Gaining customer insight: Increasing market share: 26% 29% who regard this as essential for their clients. 20 emotional their interest in customer engagement most This jump may be because companies are 20 Enhanced public profile: 22% Increasing market share: 26% investment in your appropriately. 15 doing a better job of communicating its Reducing acquisition costs: 18% brand. Enhanced public profile: 22% importance to their agencies. The biggest shift since last year is the 15 10 Reduced customer service costs: 16% Reducing acquisition costs: 18% emphasis placed on strengthening emotional 5 Increasing short-term conversions: 15% investment in your brand. The percentage 10 Adjusting to the increased importance/power 16% Reduced customer service costs: of customer: 9% Figure 7 0 of respondents highlighting this factor has Improving business predictability: 6% Company: How important is customer engagement to your 5 Increasing short-term conversions: 15% jumped from 25% last year to 31%. Improving employee satisfaction: 5% organisation? Adjusting to the increased importance/power of customer: 9 Insulating against a troubled economy: 1% Fewer respondents (18% compared to 21% 0 Improving business predictability: 6% 100 last year) see reduced acquisition costs as Figure 9 something which defines their interest in Improving employee satisfaction: 5% Agency: Which of the following best describes your clients’ interest in online customer customer engagement. Since the recession 80 engagement? Insulating against a troubled economy: 1% took hold, companies have been much more focused on customer retention, rather than on 35 60 35 Increasing long-term customercustomer value: Increasing long-term value: 30% 30% acquisition. Increasing value delivered to the customer: 30% Increasing value delivered to the customer: 30% 30 30 According to agencies, the most significant Deepening and enriching your product or service offering: 21% 40 Deepening and enriching your product or service offering: 21 factor driving client interest in customer 25 Strengthening emotional investment in your brand: 31% engagement is gaining customer insight, 25 Strengthening emotional investment in your brand: 31% Gaining customer insight: 34% 20 mentioned by a third (34%) of respondents. 20 Gaining customer insight: Increasing market share: 24% 34% Agencies also report an increased focus (+9%) 20 15 Enhanced public profile: 22% Increasing market share: 24% 0 on strengthening emotional investment. 2010 2009 2008 Reducing acquisition costs: 18% 15 10 Enhanced public profile: 22% 2008 Supply-side respondents have also seen more Reduced customer service costs: 16% Not interest driven by the increased importance Not Essential Important Nice-to-have important 5 Reducing acquisition costs: 18% Increasing short-term conversions: 23% Essential Important Nice-to-have 10 important 2010 55% and power of the customer. The proportion of 33% 11% 1% Adjusting to the increased importance/power16% Reduced customer service costs: of customer: 21% 0 2010 55% 33% 11% 1% 2009 52% agency 35% respondents who say this is a primary 11% 1% Improving business predictability: 6% 2009 52% 35% 11% 1% 5 Increasing short-term conversions: 23% 2008 50% driver of interest has increased from 11% last 41% 8% 1% Improving employee satisfaction: 5% 2008 50% 41% 8% 1% year to 20%. Adjusting to the increased importance/power of customer: 2 Insulating against a troubled economy: 5% 0 Improving business predictability: 6% 12 Improving employee satisfaction: 5% Insulating against a troubled economy: 5%

COMMENT Figure 10 increasing their focus on social networks, while Andy Beal Company: Interest in online customer engagement – difference between 2010 agencies are even more bullish, expecting their and 2009 results clients to spend more on social networking (66%) than even email newsletters (41%). 6 6 Increasing long-term customercustomer value: Increasing long-term value: -1% -1% 5 Increasing value delivered to the customer: 1% Perhaps the most stunning statistic is the 5 Increasing value delivered to the customer: 1% percentage of companies that plan to invest in 4 Deepening and enriching your product or service offering: 2% 4 Deepening and enriching your product or service offering: 2% Twitter as a channel for customer engagement. Strengthening emotional investment in your brand: 6% 3 Strengthening emotional investment in your brand: 6% In last year’s report, Twitter barely registered 3 Gaining customer insight: 0% 2 Gaining customer insight: Increasing market share: 1% 0% Twitter and Facebook steal with survey participants with just 7% of companies realizing improved customer 2 1 Enhanced public profile: 2% Increasing market share: 1% the spotlight from email engagement from Twitter, hence only 13% 0 Reducing acquisition costs: -3% planned to invest in Twitter in 2009. What 1 Enhanced public profile: 2% The 2nd Customer Engagement Survey saw -1 Reduced customer service costs: -2% a difference a year makes! Twitter has seen 0 Reducing acquisition costs: -3% businesses focusing their efforts on using email -2 Increasing short-term conversions: -1% massive growth and companies are scrambling newsletters to improve customer engagement. -1 Adjusting to the increased importance/power-2% Reduced customer service costs: of customer: -1% to make the micro-blogging channel a key part -3 An incredible 69% of companies stated that Improving business predictability: 0% of their customer engagement efforts. In fact, Increasing short-term conversions: -1% they had measured a tangible improvement -2 Improving employee satisfaction: -1% with 35% of companies seeing an improvement Adjusting to the increased importance/power of customer: -1% through their e-newsletter campaigns so Insulating against a troubled economy: 0% in their customer engagement from Twitter -3 Since the it was not a surprise that 59% planned to Improving business predictability: 0% in 2009, almost 44% of companies plan to recession took invest heavily in email marketing by the time Figure 11 increase their investment in Twitter in 2010. Improving employee satisfaction: -1% hold, companies we came to the third survey. By contrast, Agency: Interest in online customer engagement – difference between 2010 That’s a three-fold improvement over last year! have been much investment in social networks – such as and 2009 results Insulating against a troubled economy: 0% more focused on Facebook – was down on the list of priorities What conclusions can we draw from this? Well, 10 customer retention, with only 36% of companies planning to it’s apparent that companies are realising that 10 Increasing long-term customercustomer value: -2% Increasing long-term value: -2% rather than on increase their investment in that area. customers expect engagement to be a two-way 8 8 Increasing value delivered to the customer: 2% acquisition. Increasing value delivered to the customer: 2% dialogue. Email newsletters are a great way So, what happened now we are on survey Deepening and enriching your product or service offering: -1% Deepening and enriching your product or service offering: -1% to keep customers updated but they don’t 6 four and looking at 2010? Those that took a 6 Strengthening emotional investment in your brand: 9% really engage them. Instead, companies are Strengthening emotional investment in your brand: 9% chance and invested in social networks saw a 4 Gaining customer insight: 2% seeing measurable benefits of actually having 4 big return on investment. For companies, email 2 Gaining customer insight: Increasing market share: -5% 2% a conversation with their customers be it via newsletters still rated as the tactic offering Enhanced public profile: -3% Facebook, Twitter or whatever, making them 2 0 Increasing market share: -5% the highest tangible improvement (67%) but a Reducing acquisition costs: -3% willing to invest more of their marketing/PR Enhanced public profile: -3% whopping 44% – almost double the percentage -2 Reduced customer service costs: -3% budgets to reap the fruits of that engagement. 0 from 2009 – have discovered that social Reducing acquisition costs: -3% Increasing short-term conversions: -3% networks helped increase their online customer -4 Andy is the CEO of Trackur, a powerful, yet -2 Adjusting to the increased importance/power -3% Reduced customer service costs: of customer: 9% engagement. That return on investment has affordable, social media monitoring solution. With -6 Improving business predictability: -2% clearly caught the attention of both companies over 10 years of internet marketing experience, -4 Increasing short-term conversions: -3% Improving employee satisfaction: 1% and their agencies. In 2010, the survey predicts Andy specialises in online reputation management Adjusting to the increased importance/power of customer: 9% that 61% of company executives will be and is the co-author of Radically Transparent. Insulating against a troubled economy: -1% -6 Improving business predictability: -2% Improving employee satisfaction: 1% 13 Insulating against a troubled economy: -1%

COMMENT The message is clear; engaging customers around the world is key and it is not just about translating copy. like Twitter and Facebook strengthens the behaving like good international citizens. For Ron Shevlin role of email from a both a personal and Monica Hart example, Citroen recently ran an online advert business perspective. With alternative means in Spain showing Mao, which was extensively of communicating, email can – and should (often negatively) blogged about and was – be used for the messages that are most pulled down due to Chinese disapproval (China appropriate to the channel. being a big potential market for Citroen). Japan, a nation where relationships are key The range of tools used for customer and to business, has also committed expensive employee engagement prove that the critical cross-cultural marketing faux pas, ironically in Words of wisdom from task for marketers in the next few years will It’s a big virtual world North America. Panasonic’s US “Touch Woody be one of ‘right channelling’ – determining – The Internet Pecker” campaign for a new Monty Python which are the right messages for each of the Although this year’s Customer Engagement PC received the wrong kind of publicity and many channels (and tools) marketers have to Survey is internationally focused, it’s In an article titled ‘Why Email No Longer had to be withdrawn when the ‘Touch Woody’s communicate through. interesting to count the number of references Rules’, the Wall Street Journal recently opined Pecker’ slogan spread virally. to ‘Facebook’ and ‘Twitter’ from contributors. that “email has had a good run as king of Email’s reign is communications. But its reign is over. In The critical task for marketers The key to engagement lies in relevance The message is clear; engaging customers to the consumer. In many places, including over? its place, a new generation of services is in the next few years will be around the world is key and it is not just about geographies with GDPs that are growing translating copy. Campaigns must embrace the It’s reign over starting to take hold – services like Twitter one of ‘right channelling’ what? as quickly as social network usage such as social nuance of separate markets. This means and Facebook and countless others vying for China, the major US and UK social networks including the use of appropriate channels – for a piece of the new world.” In addition, the results of this year’s survey barely capture market share. Believe it or example, vkontakte.ru, smortri.ru, moikrug. demonstrate that marketers must take a broad, not, Facebook and Twitter do not rule the Email’s reign is over? It’s reign over what? ru and liverjournal.ru instead of Facebook in multi-channel view of customer engagement. world. And if you are doing business with an Over inane, mindless, useless, idiotic, time- Russia (currently the world’s largest user of Simply focusing on time spent viewing ads international audience, you won’t either unless wasting messages like ‘thx’, or ‘k’, and ‘got it’? social networks) and mobile for geographies or web pages will mean that we will miss you think about cultural and linguistic specifics like Africa where PC usage is comparatively The results of the 2010 Customer Engagement the other behaviours and dimensions that when planning your engagement campaigns. low. Culturally tailored, sensitive imagery Survey recall the words of Monty Python characterise strong customer relationships. One size most certainly does not fit all. and rich media, appropriate inter-personal from their movie Monty Python and the Holy communications and the right jargon or slang Ron is a senior analyst at Aite Group, LLC. I cut my marketing teeth arguing with Grail. In the scene where someone is walking all help as well. You may argue that it all He specialises in retail banking issues including colleagues in North America about the through the town crying “bring out your takes extra resource (something the survey sales and marketing technologies, customer and relevance of content to other markets (or lack dead!,” one man resists: “I’m not dead yet.” highlights as an issue) but just ask yourself marketing analytics, loyalty management, P2P of it). This lack of awareness still exists in this And neither is email. While growth has been if you can really afford not to engage the lending, personal financial management, social online age, a fact that is highly ironic given slower this year than last, email newsletters tremendous buying power of the non-English computing, online banking, customer experience that over one third of the North American still reign as the most commonly used agencies speakers who will drive nearly 70% of the and consumer behaviour. audience belongs to an ethnic group. However, and client tool for product development/ world’s economy in 2010? innovation, employee communications and Aite Group is a leading independent research and while many international marketing gaffs do customer support improvement. advisory firm focused on business, technology and emanate from the world’s leading economy, Monica is an Account Director at cScape, She has regulatory issues and their impact on the financial some of the most heinous cultural errors over 20 years of marketing experience working What the Wall Street Journal failed to slip from countries such as France where with companies such as Sony, Aviva, BAA, Adobe, services industry. recognise is that the rise of social networks marketers can actually be fined for not Logica, William Grant & Sons and Getty Images. 14

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 Attributes of an engaged customer Figure 12 Figure 13 Company: Which of the following attributes of an engaged customer Company: Attributes of an engaged customer – difference between 2010 and As with last year’s Customer Engagement has your organisation benefited from most in the past 12 months? 2009 results Report, we asked which attributes of an engaged customer organsations had 50 50 Recommended product, service or service or Recommended product, brand: 42% 10 brand: 42% 10 Recommended product,product, brand: Recommended service or service or brand: benefited from in the past 12 months. -16% -16% Participated in online communities or support Participated in online communities or support 5 groups: 34% 5 Participated in online communities or The type of behaviour which is most likely to 40 40 groups: 34% Participated in online communities support groups: 9% or Has improved feedback regularly: 30% support groups: 9% have helped responding organisations is still Has improved feedback regularly: 30% 0 Has provided feedback regularly: 8% Less likely to switch supplier: 25% 0 the recommendation of product, service or 30 Less likely to switch supplier: -5%regularly: Has provided feedback 8% Converted more readily: 23%supplier: Less likely to switch 25% -5 brand. However, the proportion of companies 30 -5 Less likely to switch supplier: Converted more readily: -21% -5% who have seen benefits from this has HasConverted more readily: purchased regularly: 22% 23% -10 20 Has purchased regularly: -14% decreased from 58% last year to 42%. Participated in innovation and design: 20% Has purchased regularly: 22% Converted more readily: -21% -10 -15 Participated in innovation and design: 7% 20 Less focused on price: 16% Has purchased regularly: -14% There has been an even bigger drop 10 Participated in innovation and design: 20% Less focused on price: -1% Less reactive to troubled economy: 13% (from 44% to 23%) in the percentage of -15 -20 Participated in innovation and Less reactive to troubled economy: 3% design: 7% Less focused on price: More tolerant of mistakes: 9% 16% customers who say that engaged customers More tolerant of mistakes: 4% Less focused on price: -1% 10 0 -25 convert more readily. Similarly, purchased Less reactive to troubled economy: 13% -20 more readily is down 14% from 36% last Less reactive to troubled economy: 3% More tolerant of mistakes: 9% year to 22%. More tolerant of mistakes: 4% 0 -25 The behaviour which has become more Figure 14 Figure 15 prevalent is around participation in online Agency: Which of the following attributes of an engaged customer do you Agency: Attributes of an engaged customer – difference between 2010 and communities or support groups (+9%), giving feel your clients will have benefited from most in the past 12 months? 2009 results regular feedback (+8%) and participation in innovation and design (+7%). 60 15 60 Recommended product, service or service or Recommended product, brand: 53% brand: 53% 15 Recommended product,product, brand: Recommended service or service or brand: -1%-1% Recommendation of products, customer Participated in online communities or support Participated in online communities or support 10 10 50 groups: 32% Participated in online communities or conversion and sales remain as important 50 groups: 32% Participated in online communities support groups: 11% or 5 as ever to businesses, but marketers Has improved feedback regularly: 29% Has improved feedback regularly: 29% 5 support groups: 11% 40 Has provided feedback regularly: 8% are benefiting more from the relationship- Less likely to switch supplier: 29% 0 40 Less likely to switch supplier: -8%regularly: Has provided feedback 8% building aspects of customer engagement Converted more readily: 33%supplier: 29% Less likely to switch 0 30 -5 Less likely to switch supplier: Converted more readily: -15% -8% rather than the more direct, financial benefits. HasConverted more readily: purchased regularly: 24% 33% 30 -5 Has purchased regularly: -23% Participated in innovation and design: 17% -10 Converted more readily: -15% The recession may have had an impact on the 20 Has purchased regularly: 24% Participated in innovation and design: 6% Less focused on price: 23% number of customers recommending and -10 -15 Has purchased regularly: -23% Participated in innovation and design: 17% Less reactive to troubled economy: 7% Less focused on price: 5% buying products or services, but this trend 20 10 -20 Participated in innovation and Less reactive to troubled economy: -1% design: 6% More tolerant of mistakes: 11%23% Less focused on price: also reflects a shift in the perception of what -15 More tolerant of mistakes: 7% 0 -25 Less focused on price: 5% customer engagement is about. 10 Less reactive to troubled economy: 7% -20 Less reactive to troubled economy: -1% More tolerant of mistakes: 11% 0 -25 More tolerant of mistakes: 7% * Respondents could check up to three options 15

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 Success of customer engagement strategy Tactics, behaviours and attitudes Figure 17 Company: Have any of the following resulted in a tangible improvement in your Encouragingly, almost three-quarters of Tactics for improving customer organisation’s online customer engagement? responding organisations (71%) say that their customer engagement strategy has been Presence on social engagement 80 80 Email newsletters: Email newsletters: 67% 67% Personalised messaging on messa Personalised either very successful (8%) or quite successful networks has As was the case last year, email newsletters site: 11% site: 11% 70 Presence on social networks: networks: Presence on social (63%). almost doubled are the tactic most likely to have resulted in a 70 44% On-site branded communities 44% On-site branded com from 23% to 44% tangible improvement to their organisation’s 60 Microblogging utilities: 35% / forums: 11% / forums: 11% This compares to 28% of companies who 60 Microblogging utilities: 35% on-page interactive Rich online customer engagement. Two thirds of On-site video (brand-created): say they have been not very successful or 50 experiences: 10% on-page intera Rich respondents (67%) indicate that regular email 33% On-site video (brand-created): unsuccessful. 50 On-site videoexperiences: 10% (user-created): bulletins have had a positive effect, down very 40 33% Blogging: 32% 10% The supply-side results tell a similar story. slightly from 69% a year ago. 40 Focused micro-sites: 27% On-site video (user- 30 Blogging: 32% Rich media advertising: 9% 10% The majority of respondents (61%) say their User ratings and feedback: Mobile communications: 9% As we noted last year, well-established 20 23%Focused micro-sites: 27% clients have been quite successful, which 30 Rich media advertis industry metrics for email marketing (such SMS service alerts: 9% again suggests there is ample room for 10 User-generated content: User ratings and feedback: Mobile communica as open and click-through rates) mean that 17% Desktop-based application improvement. 20 23% and widgets: 7% marketers can quantify and appreciate the 0 Social knowledge sharing: SMS service alerts: 9 14%User-generated content: On-site audio: 5% impact of their efforts in this area. 10 17% Web-based widgets and User on-pageDesktop-based app customisation: Figure 16 In a year when social media sites have rarely badges: 11% 3% and widgets: 7% 0 Social knowledge sharing: Company: How successful has your organisation’s customer been out of the news, it is not surprising that 14% On-site audio: 5% engagement strategy (or initiatives) been within the last 12 months? the tactics which have come to the forefront Figure 18 for driving customer engagement are social Agency: Have any of the following resulted in a tangible improvementand your clients’ on-page custo Web-based widgets in User badges: 11% 3% Very successful: 8% networking and Twitter activity. online customer engagement? Quite successful: 63% After email newsletters, these tactics are now 60 60 Email newsletters: Email newsletters: 60% 60% Personalised messaging on messagin Personalised Not very successful: 27% seen as having the biggest impact. Presence site: 19% site: 19% Unsuccessful: 1% Presence on social networks: Presence on social networks: on social networks has almost doubled 50 50 51% On-site branded communities 51% On-site branded comm from 23% to 44%, while the percentage of Microblogging utilities: 39% / forums: 17% / forums: 17% respondents saying that micro-blogging 40 Microblogging utilities: 39% on-page interactive On-site video (brand-created): Rich experiences: 24% on-page interactiv Rich (i.e. Twitter) has tangibly improved customer 40 39% On-site video (brand-created): On-site video experiences: 24% (user-created): engagement has, remarkably, gone up 30 39% Blogging: 40% 12% five-fold (from 7% to 35%). 30 Focused micro-sites: 31% On-site video (user-cre Blogging: 40% Rich media advertising: 18% 20 User ratings and feedback: 12% Social networking sites have not suddenly 32%Focused micro-sites: 31% Mobile communications: 17% Rich media advertising appeared in the last 12 months but what 20 10 User-generated content: SMS service alerts: 12% User ratings and feedback: has changed in that time is the appreciation 29% Mobile communication Desktop-based application 32% by many businesses that social media 0 Social knowledge sharing: and widgets: 12% SMS service alerts: 12% 10 activity represents an excellent opportunity 14%User-generated content: On-site audio: 5% for dialogue with customers and building 29% Web-based widgets and User on-page Desktop-based applica customisation: badges: 16% 7% and widgets: 12% relationships. 0 Social knowledge sharing: 14% On-site audio: 5% 16 Web-based widgets and User on-page customis badges: 16% 7%

COMMENT Figure 19 themselves well to communities on their Dr Dave Company: Tangible improvements – difference between 2010 and 2009 results own sites, but participation beyond your own Chaffey site, for example through self-help support services like www.getsatisfaction.com should Social media 30 30 Email newsletters: Email newsletters: -2% -2% Personalised messaging on Personalised messaging on also be reviewed. activity Presence Presence on social on social networks: site: 1% networks: site: 1% 25 represents 25 20% 20% On-site branded communities On-site branded communities • Feedback participation. an excellent / forums: -4% 20 Microblogging utilities: 29% / forums: -4% 30% of companies and 29% of agencies opportunity 20 Microblogging utilities: 29% Rich on-page interactive On-site video (brand-created): experiences: -6% Rich on-page interactive said they received benefits from regular for dialogue 15 3% experiences: -6% Reviewing opportunities for On-site video (brand-created): customer feedback, for example through with customers 15 On-site video (user-created): 10 3% Blogging: 7% 6% satisfaction surveys, Net Promoter Score and building Focused micro-sites: -3% audience participation On-site video (user-created): or product feedback (there is some overlap 10 Blogging: 7% Rich media advertising: N/A relationships. 5 6% User ratings and feedback: with the first category). 0 -7% Focused micro-sites: -3% communications: -1% Mobile In each of the four years of the cScape- 5 Rich media advertising: N/A SMS service alerts: -2% User-generated ratings and feedback: Econsultancy customer engagement surveys, More intriguingly, 20% of companies had User content: -5 -4% Desktop-based application communications: -1% Mobile I have been struck by the diversity of aims seen benefits from customer participation 0 -7% and widgets: 2% -10 Social knowledge sharing: SMS service alerts:of organisations in managing customer -2% in innovation and design. For me, this is 5% User-generated content: audio: -3% On-site engagement. But with the latest set of results -5 one of the most exciting forms of online -4% Web-based widgets and Desktop-based application User on-page customisation: we can see the clear, common benefits that engagement – gaining direct feedback badges: 2% -4% and widgets: 2% -10 Social knowledge sharing: engagement can offer. The survey also shows in a structured way through customer 5% On-site audio: -3% that these benefits are greatest where active panels is tremendously powerful. I have Figure 20 Web-based widgets and User on-page customisation: or customer participation occurs. audience compiled a list of some of the free and paid Agency: Tangible improvements – difference between 2010 and 2009 results badges: 2% -4% The three main types of participation are: services that can be used for gaining direct feedback on website experiences at • Recommendations participation. http://bit.ly/feedback-tools 30 30 Email newsletters: Email newsletters: 0% 0%Personalised messaging on Personalised messaging on of companies and 53% of agencies 42% site: 1% site: 1% reported that recommendations of product, 25 Presence Presence on social networks: on social networks: Benchmarking methods of achieving active 25 21% On-site branded communities 21% On-site branded communities or brand had been a benefit of service participation within and beyond your sector / forums: 2% 20 Microblogging utilities: 29% / forums: 2% engagement initiatives. It seems that many can help you develop a participation strategy. 20 Microblogging utilities: 29% Rich on-page interactive 15 On-site video (brand-created): experiences: -6% Rich on-page interactive customers love to participate! This is shown Another aspect of participation strategy is to 9% On-site video (brand-created): 15 experiences: -6% by the success of UK retailer Argos who On-site video (user-created): put in place measures which show the degree 10 9% Blogging: 9% -1% received over two million customer reviews of participation. Focused micro-sites: -2% On-site video (user-created): 10 5 Blogging: 9% Rich media advertising: N/A in a post-Christmas email campaign run -1% Dave is a member of the cScape User ratings and feedback: Mobile communications: 1% earlier this year to prompt participation. 0 -6% Focused micro-sites: -2% Customer Engagement Unit specialising in digital 5 Rich media advertising: N/A SMS service alerts: -3% User-generated ratings and feedback: User content: • Community participation. channel strategy and analytics. For his work -5 -4% Desktop-based application communications: 1% Mobile 0 -6% and widgets: 2% 34% of companies and 32% of agencies as an author and commentator, Dave has been Social knowledge sharing: reported benefits from audience SMS service alerts: -3% -10 recognised by the Chartered Institute of Marketing 2% User-generated content: audio: -2% On-site -5 participation in online communities or as one of 50 marketing ‘gurus’ worldwide who -4% Web-based widgets and Desktop-based application User on-page customisation: badges: -2% -4% and widgets: 2% support. Only certain types of brand lend have shaped the future of marketing. -10 Social knowledge sharing: 2% On-site audio: -2% Web-based widgets and User on-page customisation: 17 badges: -2% -4%

COMMENT Communication comes in many forms, but the key thing to bear in mind moving forward is that planning and persistence are invaluable. COMMENT Fortunately in the end most of us can only be are the nervous system of your organisation. ways to address these issues is through Rob Killick manipulated up to a point. Experience tells us In an economy where people are more co-development. Whether that is co-creation, when something is not right. Good customer cost-conscious, focused on quality products co-product development, co-working; making engagement has to go beyond trickery. It and the security of their jobs, organisations customers part of your organisation brings the should encourage people to connect with and cannot afford to play Big Brother with brand closer to their heart. fully appreciate the product, but no amount their employees. If you can tap the inner of behavioural manipulation will make up for customer within your organisation, empower Who wouldn’t want to have some small the weaknesses of something which is sub employees to be brand advocates and arm part in how one of their favourite brands is standard. them with appropriate tools, you are destined designing, developing or positioning a new Nudging – no substitute for for success. product? Put the ‘co’ back into company and Rob is CEO of cScape. He is author of the blog make customers part of yours. For the 28% quality UK After The Recession which deals with how The happiness of your employees has a direct of the companies that stated organisational the UK can develop a dynamic economy once effect on your external customer community. incoherence, culture or (lack of) will as the Behavioural economics is the next big thing. again. http://postrecession.wordpress.com In the latest survey 61% of companies and biggest barrier for cultivating better customer The idea that we can be manipulated into 57% of their agencies stated that intolerance engagement, I hope this helps. spending and/or saving through the human equivalent of what Barbara Woodhouse used BJ Cook of poor customer service was expected to climb in 2010. Whether they set up customer BJ is the CEO and co-founder of Digital Operative to do to dogs is now very much in fashion. Inc., a digital marketing agency passionate about communities based around forums, chat Books like Nudge by Richard Thaler encourage helping brands create new products, services and groups or customer feedback solutions, the view that we are there to be manipulated tools to enrich the lives of their customers. organisations that embrace engagement into doing things rather than making our own for customer service can ensure that their rational decisions. Experience tells us customers have the level of information and interaction they expect to continue to be loyal. Guy Stephens What does this mean and why is it important when something for the way we think about engagement? is not right. The four Cs of customer Communication comes in many forms, but the Advertising has long worked on the principle Good customer key thing to bear in mind moving forward is that there are ways of appealing to an engagement has to engagement that planning and persistence are invaluable. audience which hit our psychological sweet go beyond trickery. The latest Annual Customer Engagement When implementing new marketing tools, spots. Ever since Vance Packard’s Hidden Study showed that only 17% of organisations feedback solutions, mobile applications or Persuaders in the 1950s, debate has raged about have processes and workflow to encourage Intranets, engaging customers in true (e.g. how ethical such manipulation is. two-way) conversation should be the approach. staff to use social media. For the 83% Customers are inundated at so many touch Customer [service] Businesses looking for competitive advantage of organisations that do not have these will always try to present their products in processes and workflows in place, here is points, that targeted, authentic engagements is king the best light and make them as appealing a solid foundation for you to build from. will provide more long-term value. Listen. Ask I call it the four Cs of Customer Engagement questions. Respond. Let them know when they 2009 saw the emergence of a new type of as possible. There is no doubt that many of – culture, community, communication and have a good idea. customer service spearheaded by the use of us can be flattered into thinking that we can co-development. Twitter – ‘social media customer service’. The look like the supermodel if we wear the same Staying competitive and increasing customer first ‘poster child’ of social media-led customer clothes as her, or be a babe magnet if we drive Let’s start with culture. Any senior manager lifetime value should be goals of any service was Frank Eliason of Comcast. Then a fast car. knows that internal customers, e.g. your staff organisation worth its salt. One of the best came Tony Hsieh’s slogan informing us that 18

COMMENT Zappos is a service company that happens The proliferation of this multi-platform In this latest survey, we have tried to Linus to sell shoes, BestBuy’s (r)evolutionary approach is reflected in the fact that 30% of understand the extent to which companies are experiment,Twelpforce and the rise of companies are looking to deepen and enrich Gregoriadis moving towards an Enterprise 2.0 environment third-party complaint/aggregator sites such as their product or service offering through and focusing on what we describe as their Complaint Community, Plebble and Amplicate. the use of social networking, videos, email ‘social business design’. All of these confirmed that this new type of newsletters, discussion forums, blogging, More enlightened customer service was redefining the ways in micro-blogging, on-site branded communities/ business leaders A great example of a company reaping the which companies engaged with not just their forums, content tagging, SMS service alerts are promoting rewards of customer engagement is the online customers, but people in general. and social knowledge sharing. processes and retailer Zappos, which has 380 people in its employee Be like Zappos not customer loyalty department and now gets At the same time, there were signs of a more The indications are that experimentation behaviour which 75% of its business from repeat customers. open, honest and at times even empathetic will gradually turn into a more confident reward attempts to American Airlines conversation taking place between companies ‘mainstreaming’ of social media-led engage customers, Its employees routinely send hand-written The importance of customer engagement thank you cards and flowers to customers by and their ‘follower-friends’. On the one hand, customer service. while also minimizing the is becoming increasingly well understood. way of thanks. Zappos’ management team Twitter provided customers with the ability Although only 9% of the companies surveyed risk of social media This was well illustrated recently by the encourages employees to make decisions and, to vocalise their intent to companies willing and a fifth of agencies have seen more interest ‘fails’. uproar which followed the decision by in stark contrast to a company like American to listen; on the other hand, companies found in customer engagement driven by increased American Airlines to fire a web designer Airlines, doesn’t punish them when they show themselves engaged in a ‘real-time feedback importance and power of the customer, 61% who sympathised politely with a disgruntled initiative in the use of new communication loop’ with customers happy to let them know of companies and 57% of agencies believe customer who made some criticisms about the techniques. exactly what they thought of their products or that intolerance of poor customer service will airline’s website. service. Never before had 140 characters been Our research shows that companies who have so well and, at times, so cleverly used: increase in the next 12 months. Almost half of It’s good to see customer engagement in the processes and workflows to use social media respondents also realise there is more desire mainstream news, even if it wasn’t quite for to build customer dialogue, or who urge staff Customer: “what the ****, [insert company for real-time interaction. the right reasons. The employee had broken to use sites such as Twitter and Facebook to name] you lied to me!” In short, whether you believe that social a non-disclosure agreement around the build customer dialogue, are still very much Company: “Hi I work for [insert company media has changed the rules of engagement airline’s internal workings but his employers in the minority. However, we predict that in a name]; sounds like we got it wrong – sorry. and customer service, or think instead that should have handled the matter a little less year’s time significantly more companies will How can I help?” nothing has changed, everything is still to play clumsily. After all, the designer was driven be embracing social media activity, whether for for. The main difference is that companies are by a desire to engage with the customer and customer service, internal communications or UK companies such as ASOS, BT, Virgin increasingly more willing to listen. improve his company’s website by offering for product development and innovation. Trains and EasyJet recognised that customer constructive criticism. service was beginning to move towards a Guy is the founder of the LinkedIn Group ‘Where While everyone is talking about social more de-centralised ‘micro-interaction’ (in the social media meets customer service’. He is a Thankfully, many companies are now seeing media, we shouldn’t lose site of the fact that words of David Armano) paradigm. Taking passionate advocate of social media, particularly the bigger picture and are trying to bring about customer engagement is about much more the lead from their customers, they explored, Twitter (@guy1067), and how it can be used to a cultural shift. More enlightened business than an employee with a Twitter account or an appropriated and experimented with how enhance the customer service experience. leaders are promoting processes and employee executive with a blog. Customer engagement customer service was delivered. They not only behaviour which reward attempts to engage needs to be effective and consistent across did this in ‘real-time’, but also ‘on the go’ via customers, while also minimising the risk of offline and digital channels. There are also the increasingly ubiquitous smart phone. social media ‘fails’. tremendous opportunities created by mobile 19

COMMENT and this is reflected by a dedicated section on though more than 500,000 people each day Investment to drive increased customer Changing behaviour and attitudes this topic in this year’s report. joined Facebook, and Twitter really took off. engagement Intolerance of poor customer service is the Furthermore, although online video is nearly As we’ve been saying since the first Customer Figure 21 shows that the emphasis on type of behaviour or attitude that company ‘a universal’ for consumers, most companies Engagement Report three years ago, it is social media in the context of customer respondents are most likely to expect to did nothing with this dynamic channel. important to map customer experiences engagement is set to continue. The majority increase over the next year. The reason, I would say, was fear. They worry across different touch points. The research There’s a huge of companies say that they will increase that rich media may be too much for their Although the equivalent question was shows that organisations that are doing this party going on investment in their social network customers and that using Facebook or Twitter phrased slightly differently last year, it is clear are significantly more likely to have successful in social media presence (61%) and 44% will spend more or the like would lead to brand-damaging that this has become much more of an issue. customer engagement strategies. and everyone on micro-blogging. mistakes. I would suggest that their biggest seems to Over half of respondents (61%) say that they Linus is Research Director at Econsultancy where mistake was failing to explore these new be there – Figure 23 provides evidence that many more expect people to become less tolerant about he oversees much of its award-winning content. avenues for customer engagement. everyone, companies than a year ago are gearing up poor service; and this percentage has almost that is, except for investment in social networking and doubled since last year. The flip side of brand risk is brand value. brands sitting Twitter. This also shows that there will be less A few individuals at every major brand We attribute this to two main factors. BJ Fogg at home emphasis on micro-sites as we move into understand this. In 2009, these individuals Firstly, the recession has led to even more and merely 2010. This may be due to a reduced focus on learned to navigate the new worlds of competition between businesses and this watching the customer acquisition which often involves Facebook, Twitter, and online video. They party on TV. means that the desire to retain customers is championed these channels internally hoping campaign micro-sites. Companies are thinking even stronger. to increase brand value. But the path forward more strategically about how they can build has often been blocked by organisational fear. engagement on their principal web properties The second factor is the rise of social media That’s why I wager that 2009 has been a year rather than tactical landing pages. which means that companies are more aware of frustration. when there is dissatisfaction about products It should be noted that the increased focus Your customers are waiting or services. Disaffected consumers can now There’s certainly a growing gap between what on social media is not coming at the expense name and shame instantly in full view of ordinary people do and what established of email investment. More than half of Here’s a bet I would make; the bigger your dozens or even thousands of people. brands dare to do. companies (58%) are still planning to increase brand, the more likely you have felt frustrated their investment in email newsletters over the Consequently, many companies have raised in 2009. This is not just because the economy There’s a huge party going on in social course of the next year. Many companies are their game, recognising that provision of an tanked; the frustration came from seeing new media and everyone seems to be there – now tying up email activity with social media. excellent customer experience has never been ways to engage customers but being unable to everyone, that is, except brands sitting at a better way of marketing a business. take action. home and mere ly watching the party on TV. Increased use of behaviourally targeted email How long will customers wait for those brands does not seem to be coming at the expense of Almost half of respondents (48%) say there is 2009 was the year that Facebook and Twitter to catch up? email newsletters, even though it is becoming more desire for real-time interaction. clearly emerged as channels for brands to harder for companies to get the attention of engage their customers. And some brands Sensitivity to price is still prominent for BJ is a social scientist and innovator described by customers through generic newsletters. dazzled, with millions of followers and fans. companies and agencies but it can be noted Fortune Magazine as one one the ‘10 New Gurus But by and large, most brands sat on the You Should Know’. He’s also the author of book Marketers are having to make their that it is no longer most likely to be front of sidelines. Over half of the companies surveyed Persuasive Technology: Using Computers to e-newsletters relevant by personalising mind. Compared to a year ago, companies last year did nothing to engage customers Change What We Think and Do. content and, in some cases, by inserting now have a better understanding of how on Facebook or Twitter in 2009, even event-triggered dynamic content. elastic their pricing is. 20

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 The recession has led to even more competition between businesses and this means that the desire to retain customers is even stronger. Figure 21 Figure 23 Company: In which areas will you increase investment to drive online customer Company: Which of the following behaviours and attitudes do you expect your engagement over the next 12 months? organisation will need to address in the next 12 months? 80 80 80 Presence on social networks:networks: Presence on social On-site branded On-site branded communities communities 80 Intolerance of poor customer service: 61%service: Intolerance of poor customer 61% 61%61% / forums: 27% / forums: 27% Focus on quality:quality: Focus on 53% 53% Many companies 70 70 70 70 Email newsletters: 58% Mobile communications: Email newsletters: 58% Mobile communications: Desire for simplicity: 53% have raised their 60 On-site video (brand-created): 25% 60 Desire for simplicity: 53% 25% game, recognising 60 49%On-site video (brand-created): knowledge sharing: Social 60 Desire for more real-time interaction: 48% Desire for more real-time interaction: 48% that provision of an 50 25% 50 49% Microblogging utilities: 44% Social knowledge sharing: Sensitivity to price: 47% excellent customer 50 40 UserMicroblogging utilities: 44% ratings and feedback: 25% Web-based widgets and 50 40 Sensitivity to price: 47% Prolonged decision-making: 23% experience has badges: 25% 44% Lack of supplier / brand loyalty: 22% 40 Web-based widgets and 40 Prolonged decision-making: 23% never been a better 30 User ratings and feedback: Rich media advertising: 21% Blogging: 43% badges: 25% 30 Focus on short-term needs: 17% way of marketing 20 44% User-generated content: 35% SMS service alerts: 17% 20 Lack of supplier / brand loyalty: 22% Buying and selling second-hand: 13% 30 30 Rich media advertising: 21% a business. Rich Blogging: 43% on-page interactive On-site video (user-created): Focus on short-term needs: 17% 10 13% 10 Buying own-brand products: 12% experiences: 31% SMS service alerts: 17% 20 User-generated content: 35%Desktop-based applications 20 Sacrifice (family firstselling second-hand: Buying and etc.): 9% 13% 0 Focused micro-sites: 29% 0 and widgets: 13%On-site video (user-created): Purchase of luxury and indulgent items: 6% 10 Rich on-page interactive 10 Buying own-brand products: 12% Personalised messaging 13% On-site audio: 12% experiences: 31% throughout the site: 29% Desktop-based applications User on-page customisation: Sacrifice (family first etc.): 9% 0 Focused micro-sites: 29% 11% 0 and widgets: 13% Purchase of luxury and indulgent items: 6% Figure 22 Personalised messaging On-site audio: 12% Figure 24 Company: Areas for increased investment – difference between the site: 29%2009 results throughout 2010 and Company: Behaviours and attitudes – difference between 2010 and 2009 results User on-page customisation: 11% 35 35 Presence on social networks: social networks: Presence on 30 On-site branded communities On-site branded communities 30 Intolerance of poor customer service: 29% service: 29% Intolerance of poor customer 25% 25% / forums: 3% / forums: 3% 30 30 25 25 FocusFocus on quality: 9% on quality: 9% Email newsletters: -1% Email newsletters: -1% communications: Mobile Mobile communications: Desire for simplicity: 17% 7% 20 25 On-site video (brand-created): 7% 20 Desire for simplicity: 17% 25 7% On-site video (brand-created): Social knowledge sharing: Desire for more real-time interaction: N/A 20 15 7% 9% Social knowledge sharing: Desire for more real-time interaction: N/A Microblogging utilities: 31% 15 Sensitivity to price: -1% 20 15 Web-based widgets and9% 10 Sensitivity to price: -1% Microblogging utilities: 31% User ratings and feedback: badges: -1% Prolonged decision-making: -12% 15 10 3% 10 Web-based widgets and 5 Lack of supplier / brand loyalty: -8% Prolonged decision-making: -12% User ratings and feedback: advertising: N/A Rich media 5 Blogging: 7% badges: -1% 0 Focus on short-term needs: -10% 10 3% SMS service alerts: 2% 5 Lack of supplier / brand loyalty: -8% User-generated content: -2% 0 Rich media advertising: N/A On-site video (user-created): -5 Buying and selling second-hand: 7% Blogging: 7% Rich on-page interactive 0 Focus on short-term needs: -10% 5 -1% Buying own-brand products: 5% -5 experiences: -6% SMS service alerts: 2% -10 User-generated content: -2% applications Desktop-based Sacrifice (family first selling second-hand: 7% Buying and etc.): 2% 0 -10 Focused micro-sites: -9% -5 and widgets: -2% On-site video (user-created): -15 Rich on-page interactive Purchase of luxury and indulgent items: -3% Buying own-brand products: 5% Personalised messaging -1% -5 experiences: -6% On-site audio: -1% throughout the site: 2% -10 Desktop-based applications User on-page customisation: Sacrifice (family first etc.): 2% -10 Focused micro-sites:-4% -9% -15 and widgets: -2% Purchase of luxury and indulgent items: -3% Personalised messaging On-site audio: -1% throughout the site: 2% User on-page customisation: 21

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 Companies increasingly need to think about their “social business design” Enterprise 2.0 Figure 25 Figure 26 Company: Has your organisation adopted any of the following for Company: Has your organisation adopted any of the following for This year’s research covers what we describe product development and innovation? internal communications? as ‘Enterprise 2.0’, a phrase we use to refer to how organisations are equipping themselves 40 50 S Social networks: 36% internally to embrace social media and The aim is to customer engagement in a world where Email newsletters: 36% E understand 35 the traditional business paradigm has more about how 40User ratings and feedback: 25% been disrupted. U companies are taking a more 30 Companies increasingly need to think about Employee blogging: 17% E their ‘social business design’, and how they holistic approach organise themselves to take advantage of to customer 25 30Discussion forums: 17% D unprecedented opportunities for facilitating engagement. 40 50 Social networks: 12% Social networks: 36% communication with, and between, customers 20 Content tagging: 17% C Email newsletters: 36% Email newsletters: 32% and employees. 35 30 User ratings and feedback: 25% 40 20Video sharing: 16% User ratings and feedback: 9% V So we asked companies and agencies 15 Employee blogging: 17% Employee blogging: 16% whether they were using various types of 25 Discussion forums: 17% 30 Internal or in-company social networking: 13% 15% Discussion forums: In Web 2.0 technology and features to drive Content tagging: 17% Content tagging: 10% the following: 20 10 On-site branded communities / forums: 13% O Video sharing: 16% 20 10 Video sharing: 9% 15 • Production development and innovation Internal or in-company social networking: 13% Podcasts: 12% Internal or in-company social networking: 32% P 10 5 • Internal communication On-site branded communities / forums: 13% 10 On-site branded communities / forums: 7% 5 Podcasts: 12% Mobile communications: 11% Podcasts: 6% M • Customer service improvement 0 0 Mobile communications: 11% Mobile communications: 6% 0 0 Intranet: 10% In The aim is to understand more about 40 Social networks: 36% 50 Intranet: 10% Social networks: 12% Intranet: 43% how companies are taking a more holistic 35 Email newsletters: 36% Social knowledge sharing: 8% Social newsletters: 32% sharing: 8% Email knowledge Social knowledge sharing: 17% S approach to customer engagement, beyond 40 User ratings and feedback: 25% SMS service alerts: 7% User ratings and feedback: 9% SMS service alerts: 4% the use of technology and social media simply 30 SMS service alerts: 7% S Employee blogging: 17% Instant messaging: 6% Employee blogging: 16% Instant messaging: 20% for marketing. 25 Discussion forums: 17% 30 Internal microblogging utilities: 5% Discussion forums: 15% Internal microblogging utilities: 9% Instant messaging: 6% In Adoption of technology for product 20 Content tagging: 17% Content tagging: 10% development and innovation 15 Video sharing: 16% 20 Internal microblogging utilities: 5% Video sharing: 9% In Internal or in-company social networking: 13% Internal or in-company social networking: 32% Figure 25 shows the extent to which 10 companies are embracing a range of channels, On-site branded communities / forums: 13% 10 On-site branded communities / forums: 7% features and technologies for product 5 Podcasts: 12% Podcasts: 6% development and innovation. Mobile communications: 11% Mobile communications: 6% 0 0 Intranet: 10% Intranet: 43% Social knowledge sharing: 8% Social knowledge sharing: 17% 22 SMS service alerts: 7% SMS service alerts: 4% Instant messaging: 6% Instant messaging: 20%

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 “ “We will be starting regular staff social media boot camps for key/enthusiastic staff.” “We are using YouTube heavily to show our customers different It can be seen that many organisations are missing an opportunity. Just over a third of organisations (36%) say they are using social networks and email newsletters for this purpose but only a quarter (25%) of companies tap into user ratings and feedback. limited in how they are approaching customer service improvement beyond the traditional routes which companies have always adopted. (Figure 27) Some organisations are now using Twitter and Facebook for customer service because these Even fewer (17%) are using discussion forums applications of our product line.” to feed into development. are excellent vehicles for customers who want to engage in real-time. Just as they are failing to tap into customer “We show Twitter feedback and mentions of our brand and content, feedback, many companies are also neglecting The use of social networks for customer service is something that companies have to on our own site to be transparent about what others are saying to share information internally. Very small percentages of respondents are using consider carefully before adopting because about us.” employee blogging (17%), internal social such an approach can backfire unless an organisation is properly geared up to deliver networking tools (13%), intranets (10%) or social knowledge sharing (8%) to help drive against expectations. But where a company “We are reviewing our social media policy. Currently we have development and innovation. does this well, it can spread goodwill and improve brand sentiment. limited presence but plan to increase that this year.” Adoption of technology for internal Resourcing social media and customer (employee) communications “We send more personal messages via Twitter. e.g. we engage Although only 10% of companies are using engagement on a one-to-one basis with people that catch our eye who are an intranet for product development and In order to understand how companies are resourcing social media and customer innovation, 43% are using this tool for internal mentioning the brand in some way and we do this publicly. communications. (Figure 26) engagement activity, we asked our company respondents whether a number of statements e.g. we might wish someone good luck if they say they are starting Email newsletters and internal social were true. one of our courses or ‘hope it goes well’ if they mention they’re networking are used by around a third More than half (55%) of responding of companies (32%). These tools can be speaking at one of our events. This goes down very well and feels particularly helpful for larger organisations companies say there is a specific team or individual internally to manage social natural. Over time it might become resource-intensive.” which are divided up into numerous departments and physical locations. media. Exactly a quarter of companies have commissioned an agency to use social media “We enable customers to share information with the company and for customer engagement. ” Adoption of technology for customer (Figure 28) service improvement their friends on Facebook and Twitter.” The increased profile of social media is also As was the case with product development and internal communications – apart from reflected by the fact that a third (34%) of companies have increased their social media What company respondents said when asked how their organisations using email newsletters (55%) and social networks (36%), most companies are fairly budget in the last 12 months. were innovating in the way they engage with their customers online. 23

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 Figure 27 Organisations who urge their staff to engage Figure 28 Company: Has your organisation adopted any of the following for with social media are still very much in the Company: Which of the following statements are true for your customer service improvements? minority. Some 29% say senior staff are organisation? urged to use social media to build customer 60 Many businesses Social networks: 36% dialogue, while a fifth (19%) say this applies to 60 T only see social junior staff. media in terms of Email newsletters: 55% W the cost to their These low percentages reflect the 50 50 businessratings and feedback: 26% User because trepidation which companies feel about S of time spent allowing staff to engage directly with by employeesblogging: customers online. There has been plenty of Employee 17% W 40 socialising online. negative publicity about brand representatives 40 Discussion forums: 20% social media inappropriately; for using J 60 Social networks: 36% example Habitat’s inappropriate use of ‘hash 30 Content tagging: 15% on Twitter and the Ryanair employee tags’ 30 W Email newsletters: 55% 50 who called a blogger a liar and an idiot. User ratings and feedback: 26% Video sharing: 17% W Employee blogging: 17% Many businesses only see social media 40 20 Discussion forums: 20% Internal or in-companyterms of the cost to their business in social networking: 5% 20 W Content tagging: 15% because of time spent by employees 30 On-site branded communities / forums: 14% side of the socialising online. The other W Video sharing: 17% 10 story (unreported in newspapers) is that 10 20 Internal or in-company social networking: 5% Podcasts: 11% many companies could be missing out On-site branded communities / forums: 14% on an opportunity to improve customer 10 Podcasts: 11% Mobile communications: 10% and enhance their brand, by engagement 0 Mobile communications: 10% empowering employees while giving the right 0 0 Intranet: 4% Social networks: 36% Intranet: 4% guidance. However, only 17% have processes 60 There is a specific team or individual internally to manage social media: 55% Email newsletters: 55% Social knowledge sharing: 9% and workflows in place to encourage staff Social knowledge sharing: 9% We have increased out social media budget in the last 12 months: 34% use of social media, and only 13% actually 50 User ratings and feedback: 26% SMS service alerts: 12% Senior staff are urged to use social media to build customer dialogue: 29% incentivise staff to use social media to engage SMS service alerts: 12% Employee blogging: 17% Instant messaging: 6% We have commissioned an agency to use social media for customer engagement: 25% with customers online. 40 Discussion forums: 20% Internal microblogging utilities: 5% Junior staff are urged to use social media to build customer dialogue: 19% Instant messaging: 6% Content tagging: 15% The agency data suggests even more We have processes and workflow to encourage staff use of social media: 17% 30 Video sharing: 17% Internal microblogging utilities:in social media, with 44% of investment 5% We have dedicated social media budget: 17% agency respondents saying that clients have Internal or in-company social networking: 5% 20 We have hired extra staff to help with out social media efforts: 14% increased their budget for this type of activity. On-site branded communities / forums: 14% We incentivise staff to use social media to engage with customers online: 13% 10 Podcasts: 11% Mobile communications: 10% 0 Intranet: 4% Social knowledge sharing: 9% 24 SMS service alerts: 12% Instant messaging: 6%

COMMENT As we approach 2010, we are now firmly entrenched in Search 2.0 Our new global intranet let us cut through Engaged employees need the ability to connect underway with Twitter signing deals to put Adam Hibbert that by demonstrating that the company can freely and to structure the information they see messages sent via its micro-blogging service respond to employee needs – and so we might around their own, specific queries. into the Microsoft and Google search indexes really do the same for our customers. Crucially, (at the time of writing, it’s currently Microsoft The feeling of it’s allowed us to enlist everyone’s feedback. Adam is Group Communications Manager for one, Google zero). And of course, there is ‘stuckness’ is Aviva plc. His background is in UK-based print & Twitter’s own search tool (http://search. changing. Social An all-staff forum on our homepage is online media, from radiotimes.com to The Sun. twitter.com), as well as some new entrants media seems to be slashing the social distance between frontline to the real-time search market e.g. Scoopler acting like a social and C-Suite, hiking up the transparency and Amanda Davie (http://www.scoopler.com). solvent; freeing Employee engagement – accelerating feedback; cross-border, cross- value from places functional teams are springing up and solving So what will Search 3.0 look like? Well, if Web we hardly knew we sine qua non for customer problems faster. 3.0 is the Semantic Web, then Search 3.0 will had places. be all about, well, the semantics! As a linguist, engagement Employees see executives up close and I can’t tell you how excited I am about personal in the forums; executives are Search 3.0. There will be a shift away from At Aviva, we’re transforming from dozens of beginning to see the benefits of dialogue with building keyword lists and a focus towards ancestor businesses and propositions to ‘One employees; the sincerity and determination understanding search psychology. Aviva’. The proposition we’re cohering around behind the new brand are steadily gaining Is search ready for Web 3.0 is all about attention to individual customers. credibility. Understanding search linguistics and semantic We’re applying Net Promoter Score measures … or is it just semantics? behaviour is a good start; brands will need to globally to get our KPIs straight – customer The feeling of ‘stuckness’ is changing. Social This year’s survey confirms an even more get to grips with how searchers translate their engagement is our Holy Grail. media seems to be acting like a social solvent; dramatic uptake in Web 2.0 strategies among complex hopes, dreams and information needs freeing value from places we hardly knew we into sophisticated natural language search That demands effective feedback and process brands than last year’s version and forecasts had places. queries. They’ll have to learn how to respond improvement, internally. All our colleagues more of the same to come. Social media – need to see and understand our brand promise, specifically social media optimisation - is an in terms of the digital assets they provide agree that it’s important, believe that it’s Our biggest internal challenge important technique of search marketing; against searches and also look even more possible and take responsibility for getting us for 2010 will be to keep proving genuine (and non-commercial) conversations closely at how branded content is worded. there. We need every single employee to be our promise to employees, and links created between real people and Search is about to get really, really interesting, brands are the only real way search engines alive to our brand promise. giving them ever more power changing from being the marketing channel for can establish that a website is popular. It’s an uphill battle in a complex multi-national, to deliver for our customers. geeks to the marketing channel for geniuses. stretched by relentless change in the last As we approach 2010, we are now firmly Or is the plural of genius genii? Find the decade. Survivors have seen it all, taking Online, our biggest internal challenge for entrenched in Search 2.0. I would define this as answer in true Search 2.0 style by crowd ‘tell and sell’ campaigns with a fistful of salt. 2010 will be to keep proving our promise to a richer and more relevant search experience sourcing: http://bit.ly/35NZYD Junior ‘just passing through’ employees grow employees, despite the maelstrom – giving combining video, audio, imagery and map Amanda is a member of the cScape CEU and the jaundiced when the legacy proves harder to them ever more power to deliver for our results. It includes the ever-increasingly founder of Reform, an independent search business budge than we’d wish for. That’s corrosive customers. More powerful search and semantic important index of user-generated content, consultancy that builds practical solutions for for engagement, resulting in the ‘learned analysis solutions would round off the served up in as timely a fashion as is clients and agencies – from SEO & PPC through to helplessness’ of a Dilbert strip. peer-driven intranet we’ve unleashed. technologically possible. The war to dominate business planning, strategy, training and analysis. the real-time search market is already 25

COMMENT Developing an effective online engagement strategy is not a short term, tactical exercise. stakeholders and leave it at that. For these For example, catalogue shopping is often used Theresa Clifford organisations, customer engagement was Paul Blunden in conjunction with another channel – the neither appropriate nor relevant. ‘phone or a physical agent and increasingly the web. We think vertically but customers behave • Are your customers actually suitable for As customer horizontally. engagement? You may find that, while behaviour your customers are very eager to be continues to With only 11% of companies and 10% of engaged with, this will not create much evolve in as yet their agencies reporting this year that they increased value for your business. Customer unknown ways, intend to invest significantly in mobile it the opportunities When to engage and why engagement should ultimately be about to engage will also Multi-channel customer seems that businesses still believe they have helping you to achieve a return on your a choice; to deal with this channel either Back in November 2006, when cScape first objectives. If there are no long term benefits, grow and develop. engagement – the customer later, or not at all. The challenge is that their launched the Online Customer Engagement do not adopt an engagement strategy. customers are not waiting. Recent research Survey, not many people had heard of owns it not you showed customers using camera enabled ‘customer engagement’ as a concept. Over the • Does your product or service lend itself to mobile phones to take photos of a product “Suicide, not competitors, drives companies last three years, as this year’s survey results an engagement strategy? If a purchase is they were considering in order to share it with out of business” according to management show, there has been a huge rise in the number a one off, it might not lend itself to further their friends on Facebook. The retailer may consultant Tom Peters, and I think he makes of companies who feel that the engagement of dialogue. Similarly, if the optimum timing for not have a mobile strategy but the customer a valid point. This year’s survey suggests customers is a key part of their digital strategy. a client conversation is once every 10 years, does and so the engagement opportunity companies have gone backwards in their striking up a conversations on a weekly or is being missed. Why didn’t they provide understanding of customer touch points But how do you work out if an engagement monthly basis won’t have the desired effect. compared to last year. 36% of companies downloadable, high resolution photos in store strategy is right for your organisation? Developing an effective online engagement have their multi-channel touch points mapped via Bluetooth? What about using bar-code And if it is right, when should you implement strategy is not a short-term, tactical exercise. to gain a single view of the customer at scanning data to encourage return visits? it and what should you engage your Nor is it easy. You need to commit to it long either an advanced or quite advanced level. These are not transactional strategies – they customers around? term to gain real business value and you must The rating is consistent between agency and are engagement strategies. Our experience of working with a range of really put the effort in to planning, executing client and also correlates with the percentage As customer behaviour continues to evolve clients on their digital strategies, from large and measuring if you want it to pay real who report having carried out user journey in as yet unknown ways the opportunities to corporations like Sony, Barclays and Aviva to dividends. mapping. Last year the figure was 45% and yet engage will also grow and develop. Businesses professional bodies like the Chartered Institute multi-channel as a topic has gained significant Taking time to question the relevance of your that decide not to understand key aspects of of Personnel and Development (CIPD), leads traction. The economic uncertainty is a ready customer engagement approach before you their customers will miss these opportunities us to believe that you really need to ask excuse for inertia in business but customer commit to it will hopefully save you a lot of and leave them available to competitors. three key questions before launching into an behaviour is changing, fuelled by continuing time, effort and money in the long run! Over 75% of the organisations surveyed this engagement strategy: technological advances. year are contemplating suicide, whether they • Do you really want to engage with your Theresa is Sales and Marketing Director at award- Part of the reason for this anomaly lies in the recognise it or not. customers? Is an engagement strategy the winning digital agency, cScape. She has worked in way we think about customer interactions. the digital industry since 1997 and has written for Paul is the CEO of Foviance a London based right approach for your target audience? While customers have been using multiple a variety of publications and presented at many consultancy that works with global organisation We have worked with some clients who channels for years, we tend to think of events around the globe. to help them improve their customer touch points just needed to impart certain facts to their them as using one channel at a time or two across all channels. channels designed specifically for a purpose. 26

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 Barriers to cultivating customer Figure 29 Figure 30 Company: Which of the following have been the most significant Company: Barriers – difference between 2010 and 2009 results engagement barriers to cultivating customer engagement in the last 12 months? Lack of resources (budget and time) is still Many companies 60 9 of resources (budget and time): 52% perceived to be the biggest barrier to Lack Lack are wrestling cultivating better customer engagement, with with how to get 52% saying that this has been an obstacle in investment for 6 of skills / experience / understanding: 33% Lack Lack the last 12 months. This is exactly the same social media 50 proportion as last year. Lack of, or difficulty proving, ROI / business case: 28% Lack and customer 3 engagement Organisational incoherence, culture or (lack of) will: 28% Orga Lack of skills, experience or understanding has activity. 40 become a more significant issue than last 0 of senior management buy-in: 27% Lack Lack year and is now the second biggest problem. The percentage of respondents saying this is a significant barrier has increased by 30 Complexity of organisation: 25% -3 Com 9% to 33%. Lack of methodology of framework: 20% Lack The second biggest challenge last year -6 was problems with technology but that is 20 Problems with technology: 17% Prob now much less of an issue, almost halving -9 Focus on short-term benefits: 16% Focu from 30% last year to 17% now saying this is an issue. 10 Customers or products unsuitable: 10% -12 Cus Social media has impacted how companies go about improving customer engagement and Difficulty in finding supporting agencies: 3% Diffi has often changed the focus from technology 0 -15 owned or licensed by companies themselves 60 9 Lack of resources (budget and time): 52% Lack of resources (budget and time): 0% to third-party websites. Lack of skills / experience / understanding: 33% 6 Lack of skills / experience / understanding: 9% 50 Agencies highlight the fact that their clients Lack of, or difficulty proving, ROI / business case: 28% Lack of, or difficulty proving, ROI / business case: 0% 3 are finding it difficult to show a return on Organisational incoherence, culture or (lack of) will: 28% Organisational incoherence, culture or (lack of) will: 7% 40 investment from use of social media or to Lack of senior management buy-in: 27% 0 Lack of senior management buy-in: 9% build a business case for it. 30 Complexity of organisation: 25% -3 Complexity of organisation: -1% Many companies are wrestling with how to Lack of methodology of framework: 20% Lack of methodology of framework: -5% -6 get investment for social media and customer 20 Problems with technology: 17% Problems with technology: -13% engagement activity. Focus on short-term benefits: 16% -9 Focus on short-term benefits: -10% 10 Customers or products unsuitable: 10% -12 Customers or products unsuitable: 4% Difficulty in finding supporting agencies: 3% Difficulty in finding supporting agencies: -1% 0 -15 27 * Respondents could check up to three barriers

We d 4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 We d We d Mobile is at a very embryonic stage. Our c Mobile Figure 31 Figure 33 Company: Do you plan to invest in the mobile channel in 2010? Company: How is your organisation using mobile marketing and Investing in the mobile channel services to enhance customer engagement? The mobile channel has gradually been No: 41% increasing in importance over the last few Yes, but limited investment: 49% years and the rise of smart phones and Yes, significantly: 11% increased use of the ‘mobile internet’ has A large proportion accelerated this, but there is still no big step (41%) of companies change in terms of investment. are not planning A large proportion (41%) of companies are not any investment at all in mobile. planning any investment at all in this channel They in 2010 and a further 49% are planning only 0 10 20 30 40 50 limited investment. Only 11% are planning They We don’t do any mobile marketing, and we don’t have any plans to do any: 41% to invest significantly but this increases We don’t do any mobile marketing, but we are planning to: 36% significantly for the largest companies. They Agency respondents report fewer numbers of We do the occassional ad hoc piece of marketing via the mobile channel: 18% companies (16%) planning zero investment. Our customer engagement strategy seamlessly embraces mobile marketing: 6% Their Mobile and customer engagement Figure 32 Figure 34 strategy Agency: Do your clients plan to invest in the mobile channel in 2010? Agency: How is your organisation using mobile marketing and This research looks at investment in mobile services to enhance customer engagement? marketing and services in the context of its use for enhancing customer engagement. No: 16% Yes, but limited investment: 52% A small minority of organisations (6%) say they have a customer engagement strategy Yes, significantly: 10% 0 10 20 30 40 50 which embraces mobile marketing seamlessly. The majority of companies who are using the mobile channel at all are using it just for the occasional ad hoc piece of marketing (18%). 0 5 10 15 20 25 30 35 40 A mobile strategy needs to embrace many areas touching upon customer engagement, They don’t do any mobile marketing, and they don’t have any plans to do any: 24% including messaging (MMS and SMS), They don’t do any mobile marketing, but they are planning to: 34% online content provision and commerce. It is They do the occassional ad hoc piece of marketing via the mobile channel: 36% therefore not surprising that many companies Their customer engagement strategy seamlessly embraces mobile marketing: 6% are wrestling with their mobile strategy. 28

120 We are doing this 100 Plan to do this COMMENT A long way off / no plans 100 80 We are doing this Plan to do this 80 A long way off / no plans 60 Using mobile marketing to build Figure 35 Jay Cooper engagement Company: In what ways are you using mobile marketing to build customer engagement? 60 We have broken down mobile marketing into 100 separate areas in order to understand in more 100 44% 50% 47% 56% 62% 52% 73% 66% detail how companies are using the channel 28% 41% 41% 51% 56% 49% 54% 54% to engage with customers. These areas of mobile are based on a model used by mobile 50 50 marketing strategist and cScape CEU member 48% 42% 44% 37% 30% 39% 19% 26% 36% 34% 39% 31% 28% 39% 19% 26% Jay Cooper. 24% 17% 15% 12% 14% 12% 12% 17% Mobile: reframing the 0 20% 16% 14% 14% 10% 9% 9% 7% 0 Location-based As integral part Integrating mobile marketing lifecycle marketing Creating opportunities for user-generated content Increased dialogue with customers Integrating mobile into broader CRM As integral part / m-commerce Personalised information Creating applications of customer It is again clear from the small number Transactional thinking Location-based marketing lifecycle marketing Creating opportunities for user-generated content Increased dialogue with customers into broader CRM 100 Transactional / m-commerce Personalised information Creating applications of customer of companies who are active across this spectrum of activity that mobile is at a very We are doing this Our latest survey shows that there is a embryonic stage in the adoption curve. dilemma within both agencies and client Plan to do this organisations about how seriously mobile Companies have been quickest to use 80 should be taken in 2010. this channel for increased dialogue with A long way off / no plans customers. A fifth of company respondents Mobile is a healthy media, yielding good say they are doing this and a further 36% say We are doing this Plan to do this A long way off / no plans results for those who know how to use they plan to do this soon. 60 it. But it hasn’t yet become mainstream Figure 36 enough and as the study shows, there isn’t a A third (34%) of companies are planning Agency: In what ways are your clients using mobile marketing to build customer engagement? fundamental grasp of how to make mobile to create applications for mobile phones, marketing relevant for consumers. If there in addition to the 16% who say they are 100 was, companies and their agencies would show already doing this. We are doing this Plan to do this A long way 54% / no plans off 28% 41% 41% 51% 56% 49% 54% bigger confidence in the media and it would be Surprisingly, nearly two thirds of taking more of a centre stage. As it is, they are companies (62%) have no plans for mobile taking no more than tentative steps into using commerce. Only 10% of companies are 50 this channel. using transactional mobile activity to build 48% 42% 44% 37% 30% 39% 19% 26% What is key is that consumer use of mobile customer engagement. A further 28% are is increasing and in some geographies, such planning to do this. 24% 17% 15% 12% 14% 12% 12% 17% as Asia, that growth exceeds computer 0 usage. Consumer studies, such as Orange Location-based As integral part marketing lifecycle marketing Creating opportunities for user-generated content Increased dialogue with customers Integrating mobile into broader CRM Transactional / m-commerce Personalised information Companies who are either using or planning Creating applications of customer to use mobile as part of their customer Exposure, show that consumers understand lifecycle marketing, for broader CRM, for mobile and they will consume mobile media user-generated content or location-based wherever relevant. This isn’t just down to marketing are also in the minority. the proliferation of smart phones or iPhones out there; it is because consumers are now more switched on to what they can use their devices for. 29

COMMENT Please, please don’t forget about that faithful steed in the stable known as email. So how do we bridge the gap? Which elements Helpful: You can raise awareness, make offers, Next? Go map your customer experiences to of knowledge are missing? Where are the Jim Sterne give advice, send coupons, ask questions. Be obtain a single view of the customer. Why? answers? My belief is that it isn’t the questions forwarded to friends. So versatile! So social! Because only 35% of respondents claimed to that are wrong, nor is there a lack of thought be doing it with any success and that spells leadership around this area. It is simply Friendly: Nice layout. Pretty graphics. opportunity! Consumer use Humorous. Personal(ized). It’s just nice. reframing the thinking behind what we’ve got of mobile is Jim has written eight books on using the Internet in front of us. increasing and in Courteous: Email doesn’t shout or flash or for marketing, produces the eMetrics Marketing some geographies, blink. It just waits patiently for the recipient Mobile is not and should not be treated like Optimization Summit and is Chairman of the Web such as Asia, that to open it. If you don’t want it anymore, just any other mass media. It is not online’s smaller growth exceeds The trusty steed of online unsubscribe and it’ll go away. Analytics Association. sibling, nor is it a screen that grabs attention computer usage. for long periods of time. It is a device that is marketing always with the consumer and is consumed Kind: A good email program personalizes Pete Mortensen Twitter! Video! Online Gaming! So many great each message so the recipient isn’t subjected at different times of day and in different ways to non-relevant dross. new ways to reach out to customers and really according to the differing mindsets a consumer engage them! But what’s the winner? Which Obedient: It goes when it should and where can be in. It is a device that is personal to the communication method “resulted in a tangible it should. consumer and if is treated that way, it will get improvement in your organisation’s online their attention above and beyond other media. customer engagement?” Email. Lowly email. Cheerful: Hi! Nice to see you! We thought It is designed for communication. It scored 67% vs the next highest which was you’d like to know about this great new offer! Brand presence on social networks (44%). Communication is not just about connectivity. Thrifty: If you can think of a less expensive The only way to succeed is It is two-way dialogue – including listening “It’s only for old people.” way to communicate with customers please let to walk the talk not just fighting to be heard. It doesn’t take “It’s too slow to be effective.” me know. a leap of technology to make changes. It takes “I only use it to communicate legal stuff.” Brace yourself, I have some bad news: online Brave: Neither rain nor hail nor sleet nor snow a reframing of the media to think how your customer engagement is not a panacea for all Yes, email is still the workhorse of the nor heat of day nor dark of night shall keep consumer wants to be listened to. that ails business. It’s also nowhere near as marketing department. this carrier from the swift completion of his easy as it initially looks on paper. To hear the Jay Cooper is a mobile marketing strategist, appointed rounds. Why? It works. press talk about it, you would think that all that specialising in the field of CRM through Clean: It doesn’t end up cluttering up the you need do to transform a company is register mobile channels. He is the Strategy Director Why? It’s a real Boy Scout. By that, I mean it’s street or defacing walls. a Twitter account and upload your company for ROI Mobile, an agency that specialises in trustworthy, loyal, helpful, friendly, courteous, logo to Facebook. mobile marketing. His experience is drawn from kind, obedient, cheerful, thrifty, brave, clean, Reverent: Double opt-in? Unsubscribe? Yes, having previously worked as Head of third-party and reverent. No, really. Madam. But of course. We know better. Successful customer CRM for Blyk, the ad-funded MVNO (mobile engagement isn’t about purchasing a set of network) for 16-24 year olds. Previous to this, Trustworthy: If you have a clean address and So yes, dive into mobile. Yes, invest in Twitter tools or visiting a bunch of websites with Jay was Head of Sales at AMV Group (Redwood) are careful about avoiding spam triggers, email tracking. Yes, increase your budget for social strange names. It’s about transforming the way for Boots CRM, gets delivered. networking presence (and advertising). But your organisation – or the sales and marketing please, please don’t forget about that faithful department, at the very least – approaches Loyal: As long as you deliver value, customers steed in the stable known as email. She’s a real its work. and prospects will continue to subscribe. workhorse. 30

COMMENT Look at this year’s survey results: across Building a deeper emotional connection just enabling their goals. This results in agencies and client organisations, the Rich Wand memorable experiences that increase customer approach has been to form a social media This new interaction paradigm is based on participation and deepen engagement. team and then underfund them. Why interfaces that are inclusive, natural, intuitive, isn’t customer engagement great? Not responsive and memorable. These are the New engagement opportunities enough time or resources. What’s stopping perfect ingredients for brand to build deeper bonds with larger numbers of customers: Natural user interfaces offer exciting it from getting better? Not enough time opportunities for companies to engage with or resources. It is remarkable how many • Natural user interfaces offer new ways their customers on a deeper level. While forward-looking companies are willing to for people to interact with digital content certain key technologies and devices are still adopt the hottest new trend, so long as it The natural way to engage in a way that feels effortless and familiar, emerging, the next generation of engaging doesn’t cost anything or take time away from more important business. Is it any wonder such Successful your customers just like in the real world. A click is fast experiences is already well out of the starting being replaced by intuitive gestures such blocks. It’s too early to say exactly what shape flirtations with new technologies fall short customer It’s going to be emotional as tap, flick and pinch. They are intuitive these solutions will take but what is certain is of expectations? engagement isn’t and customers can understand how to that touch, vision and speech interfaces will about purchasing Over the last few years, many brands have interact with them without training or become increasingly important in helping People perform to the metrics upon which they a set of tools or recognised that in order to encourage loyalty previous knowledge. brands deepen bonds with their customers. will be evaluated. If your organisation claims visiting a bunch and increase customer interactions, they an interest in deep customer engagement but of websites with need to build deeper emotional bonds with • By freeing users from keyboard and mouse Rich is a senior user experience consultant at EMC only judges staff based on other activity, few strange names. their audience. based interactions (peripherals that are Consulting. He’s at his happiest working when to none will make the extra effort to achieve not natural or intuitive devices), we can there is no mouse in sight. best-in-class engagement. Organisations that One of the most exciting engage customers through more natural approach online engagement as a distracting hobby won’t get any return from it. advances in recent years experiences. Bruno Ancona has been the successful • By allowing designers to break away from Lopes Adding the latest buzzword to an organisation practicing business as usual will give you development of gestural the paradigms of a metaphorical (desktop) interface, options for both delightful and business as usual and a lot of unloved interfaces. deep interactions are opened up. PowerPoint decks. The only way to succeed in online engagement is to genuinely walk the Until recently, technology often struggled • This new freedom also increases the talk. If you actually want to benefit from the to support this goal, with artificial interfaces opportunities for brands to build deeper social media revolution happening right now, often placing barriers between brands and connections by enabling new experiences customers. However, things are now changing. and interactions to occur spontaneously and Achieving engagement you must effect significant cultural change to support new employee behaviours around One of the most exciting advances in recent in new locations. Clients and agencies concur; customer engagement. Otherwise, you might as well years has been the successful development of engagement is essential. But what the practical gestural interfaces. Devices such as the iPhone The development of these new interfaces stick to making cold calls. folks really want to know is how exactly is and Microsoft Surface have been leading offers a sense of liberation not just to it achieved? Pete is a strategist for Jump Associates and is the the charge in facilitating natural interaction. customers but to user experience professionals co-author of Wired to Care: How Companies The arrival of Windows 7 means we now have too. By removing artificial interactions, we Firstly, you need to equip yourself. It’s great Prosper When They Create Widespread an operating system with native support for are free to use our design and interaction that 55% of companies surveyed have Empathy. multi-touch interactions. skills to focus on enthralling users, not appointed a specific team or individual to 31

COMMENT handle social media and 47% of agencies So hop in and play the game! But always Barriers to a more focused approach to Figure 37 think their clients are using specialist third remember, games have rules: maintain mobile Company: What is holding you back from a more focused parties to help. However, it is not so positive a crystal clear reputation, adopt radical and integrated approach to mobile marketing? that only 14% of companies have hired extra transparency, provide brand utility and Companies generally attribute their inertia social media focused staff, given that they engaging content. when it comes to integrating mobile to a lack of resources (51%), although there are are forecasting big increases in social media 60 activity or that 27% believe lack of senior The ‘bad’ news? Engagement is not a game other widely cited reasons including lack of management buy in is a barrier to social media you can turn on and off. Either commit or skills/experience/understanding and lack of success (up 9% from last year). leave the turf. The advantage? When the business case. connection is always on, earned and owned 50 Companies need to adapt their structure and media become abundant and paid media Agencies are more likely to point to lack of count on experts that know the tools and less necessary. skills or inexperience. Companies are still frameworks, but also take into account the feeling their way when it comes to mobile 40 real needs of the business across multiple By comparing the data from this report with and a significant complication is that there departments. With defined goals, they should the previous years, it’s possible to notice three are so many different strands to mobile which work on focused efforts with agencies that paths for success: require different expertise. 30 also get it, aiming for measurable performance improvement. • Be where your customers are (social Mapping and measurement networks, Facebook, Twitter et al), Deliver product enhancement • Embrace customers’ content and opinions. Methods of gathering customer 20 It’s not about what you say about yourself. intelligence based on real needs and be It’s about what they say about you. As in previous years web analytics has proved sure that useful, caring brands to be the most useful method of gaining 10 create deeper emotional links • Accept that rich-media advertising and customer intelligence for engagement. There micro-sites focused on the bells and whistles with their consumers. will leave the spotlight. Tell a great story and has been a noticable growth in social media / buzz monitoring; while monitoring online it will be shared! 0 Secondly, accept that engagement is not search practices is suprisingly undervalued. achieved overnight. It’s more like a process; 60 Lastly, don’t adopt technologies and best Lack of resources (budget Complexity of organisation: Mapping customer experience to gain you need to actively monitor and converse and time): 51% 17% practices just because it sounds as if it is right. with your audience. The insights you get from Understand your customers and what social a single view of the customer 50 Lack of skills / experience / understanding: 28% Lack of methodology or framework: 16% it lead to a better notion of what should be media can do for your business and then Fewer companies say that they are very Lack of, or difficulty proving, Problems with technology: done to increase the value of your offering. work on having killer ideas that lead to real 40 advanced at mapping their customer touch ROI / business case: 27% 13% Deliver product enhancement based on real breakthroughs! points than in previous years. Only 3% say Customers or products Lack of compatibility and needs and be sure that useful, caring brands 30 Bruno is the CEO of Foreplay – a digital that they are very advanced at mapping their unsuitable: 22% industry standards: 8% create deeper emotional links with their engagement agency based in São Paulo, Brazil. customer20touch-points, compared to 6% in Lack of senior management Focus on short-term benefits: consumers. This leads to long term customer buy-in: 21% 6% He’s also co-founder of the Online Performance 2007. More companies say they are not very value. As a bonus, when you engage with the Group, a company that creates high performance advanced; 40% compared to 36% last year and Organisational incoherence, Difficulty in finding cool people that are in the know, your message 10 culture or (lack of) will: 18% supporting agencies: 2% websites worldwide. 35% in 2007. hits the home run – thanks to the status-phere. 0 32

50 40 COMMENT 30 20 10 Figure 37 0 Company: In the last 12 months which of the following methods of gathering customer intelligence have you found most useful for Eric T. Peterson engaging your customers online? 60 Web analytics: 51% Monitoring online search practices: 14% Online customer surveys: 34% Offline customer surveys: 9% 50 Customer journey analysis: 30% Third party data providers: 9% Feedback from customer-facing staff: 28% Attribution modelling: 5% 40 Customer interviews: 27% Online panels: 5% Measurement & cultivation Social media / buzz monitoring: Shadowing customer / ethnography: 21% 0% In 2009-10, web analytics is still the number 30 one strategy for gathering customer Focus groups: 18% intelligence online. While it is encouraging Usability testing: 15% It is discouraging indeed to see companies leveraging proven 20 to see both technology, it is similarly discouraging to see corporate We need to start doing this both corporate and agencies detailing the same and agencies barriers to success we have seen in previous Not very advanced (we don’t even know 10 how many touch-points we have detailing the years when it comes to understanding our same barriers customers, namely: to success we Quite advanced (we know most of our customer touch-points) 0 have seen in • Lack of resources (52% of companies, 41% Very advanced (we know all previous years. of agencies) Figure 38 our customer touch-points) Company: How advanced is your organisation at mapping customer experiences to obtain a single view of the customer? 0 10 • Lack of skills (33% of companies, up 9% 20 30 40 50 from last year) We need to start doing this 2008 2009 2010 • Cultural incoherence (28% of companies up Web analytics: 51% Monitoring online search practices: from 21% last year; 30% of agencies) 14% Online customer surveys: 34% • Lack of senior management buy-in (27% of Not very advanced (we don’t even know Offline customer surveys: 9% companies, up 9% from last year, 31% of how many touch-points we have Customer journey analysis: 30% agencies, up 7%). Third party data providers: 9% Feedback from customer-facing Quite advanced (we know most of All are cited as barriers to success when staff: 28% Attribution modelling: 5% our customer touch-points) working to improve customer engagement. Customer interviews: 27% Online panels: 5% While the situation seems to be improving compared to a year ago, none of the Very advanced (we know all Social media / buzz monitoring: Shadowing customer / ethnography: challenges appears to be moving towards our customer touch-points) 21% 0% conclusion, save one – the application of a strategic framework. Focus groups: 18% 0 10 20 30 40 50 Usability testing: 15% 33

COMMENT In the previous survey, 33% of organisations for customer engagement and I’m convinced However, web analysts cannot and should Janet Grimes reported that lack of methodology or framework that success will follow. not operate in isolation. Quality web analytics was a barrier to cultivating better customer data may be available literally for free but that engagement. In the latest survey, the figure Eric is an internationally recognised authority doesn’t mean it should be the only source is dropping, which suggests to me that on web analytics and digital measurement and of insight. companies are starting to embrace the idea the founder of the global consulting group, Web that it is not the tools but how you use them. Analytics Demystified. Author of three books on Web analytics data provides one of the main The three year trend is even more encouraging Consumer use the subject of measurement, he presents frequently platforms from which web analysts play their – in the 2008 survey over 36% of companies of mobile is at conferences around the world. part in contributing to a bigger picture. but the reported a lack of process and methodology as increasing and in depth of insight around customer engagement The simple truth a primary barrier to their success. some geographies, Hugh Gage is greater when the considerable gaps are filled such as Asia, that out by other areas like customer interviews, I have been struck by the obsession prevalent growth exceeds focus groups, buzz monitoring, usability, in certain parts of our industry with constantly Until senior management computer usage. feedback from customer facing staff etc. analysing means of communication rather than understands the need for a the content used to communicate. To some defined strategy towards the Additionally, while the leading edge of web extent this report perpetuates this problem, analytics is taking on a new profile as it but not wanting to bite the hand that feeds measurement and cultivation partners up with business intelligence and me, I would like to spend this little bit of time of customer engagement, adopts a greater degree of technical and that I have with you to bring us back to the companies and their agencies The wider responsibility analytical sophistication, the one very basic what I think is the main issue underlying all area which governs all this is internal buy-in. will continue to struggle. for web analytics ‘customer engagement’. People don’t buy If senior management can be helped to communications, or relationships - they buy As this and previous year’s reports have understand the benefit of web analytics then goods and services. It doesn’t matter how The depressing statistic is the growth in the consistently shown, developing a rounded buy in will follow shortly after. From there the good your social media campaign is, or how lack senior management buy-in statistic. Until view of customer and visitor engagement door to a greater understanding of customer engaging your email newsletter, if the thing senior management understands the need for is not about any one discipline or source engagement and the rewards therein, will be people are buying is not well designed and a defined strategy towards the measurement of insight; it requires a more inclusive and unlocked and left wide open. presented, you are on a hiding to nothing. and cultivation of customer engagement, companies and their agencies will continue holistic approach. It is the web analyst’s job to step up to senior to struggle to effect positive outcomes in the Whilst customer engagement is seen by more management and deliver not just the data and All a company’s efforts should digital channel. than half of all businesses as being essential, the insight but more importantly to make sure be put into ensuring that the The opportunity lies somewhere between among other issues the report this year that nobody walks away without having a clear product or service is as good understanding of where to go next. the 90% or so companies who believe that identifies two interesting points: as it could be online customer engagement is important • That barriers to cultivating better customer Hugh is a member of the cScape Customer or essential and the 50% plus of companies engagement are widespread and range from Engagement Unit and works as an independent What the survey does reveal to me is reporting a lack of resources to define technology to management buy-in. web analytics and usability consultant. He is also something that has been talked about for years and execute engagement strategies. It is, author of the Web Pro Analytics column in the and is encapsulated in the seminal Harvard and always has been, people, process and • Businesses are using a very wide variety of UK’s .NET magazine. His clients include Sky, Business Review article of December 2003 technology in equal measures that produce methods in gathering customer intelligence Virgin, Yahoo!, Eurostar, Renault and Hilton. entitled ‘The one number you need to grow’. results. Determine your strategic framework of which web analytics is the most popular. People trust other people. 34

COMMENT History gives us important perspectives on the potential disruptions heralded by social media. What does this mean for customer been established as the new media has found Martha Russell Ian Jindal engagement? Simply put, it means that all a its place, alongside of the old, in the new company’s efforts should be put into ensuring media ecology. that the product or service is as good as it could be, that the brand authentically During 2009, ad agencies have trimmed their represents this product or service and that all rosters. Print media has staged a disappearing the company’s communications are relevant act and TV production budgets have mirrored to this. Then you stand half a chance of them the declines in overall ad revenues. Clients recommending you to their friends, colleagues and agencies have increased both time and and loved ones. Brand leaders experiment budget spent on interactive, online and From business model to experiential marketing as they seek to define Does this mean we shouldn’t indulge in with social media in channel-specific sources of relevance for their customer model conversation with our customers? Of course customers and then integrate those across not. What it does mean though is that the intentional, accidental and all channels. During the lifetime of this annual survey (which started in 2006), customer engagement conversations we have should be led by them. phantom communities Customer intelligence is still the lifeblood of has become an orthodoxy rather than the The problem with relying so heavily on email One of the most important human signals business. Market efficiencies exist in finding fresh-faced neologism that forced itself newsletters, as we can see is still the case from is the indicator that immediately precedes customers who are like each other and then into our post-Web2.0 consciousness. This this year’s survey (although to be fair, growth the reorganisation of communities and their helping them discover your brand’s desired year’s survey shows that digital marketers in this area is much less this year), is that the networks of relationships. Human scientists try position. When the herd instinct tips the are embracing a full range of tactics and company is usually still setting the agenda. to read these signals to make sense of political early and late majorities, market forces can channels to attract and monetise customers. It’s very easy to bang on about yourself in an change, for disease control and for market transform a business. So, it’s not surprising that Two thirds of companies have earmarked email, but don’t expect people to be interested. trends. In the past year, a number of media marketers are trying to integrate the concepts social networking for increased investment People tend to be most engaged when you are of community into the most recent media and virtually every tool and technique at the listening to them and talking about the things Customer signals have gained widespread attention. newcomer – social media. Many are looking disposal of marketers is earmarked for some they want to talk about. intelligence is still Several new technologies – especially within form of extra attention in 2010. the lifeblood of the domain of social and participatory media – for best practices, so they can get up to speed So my advice would be this. Yes, engage with business. have promised opportunities to out manoeuvre efficiently. The leaders - those willing to take your customers, but don’t talk at them. Ask competitors, take market share and maintain some risks to differentiate themselves - are The customer may be at the questions, listen to the answers and respond business growth. trying new approaches to managing intentional heart of our thinking, but one by improving your service. Above all, tell the social media communities, developing quick History gives us important perspectives on the must question whether that’s truth about yourself. It sounds simple but it’s leverage responses for sudden immersion in incredibly hard to do well. potential disruptions heralded by social media. accidental communities and inventing renewal a result of care and attention Over the years, as new technologies have tactics for phantom communities whose vitality or because they are the Janet is a member of the cScape Customer entered the popular use – radio, telephones, Engagement Unit and partner in The Joined Up television, dial-up internet and broadband – has faded. bulls-eye, our ‘target’ Company, a consultancy that finds branded ideas each has provided a disruption in the existing Martha is Associate Director of Media X at In this frenzy of activity, we now risk drowning that help clients solve business problems. Janet also media landscape. Experimental, specialised Stanford University. Her research interests include out the voice of the customer. The customer has a long history in training through a number of uses have given way to predictable results in interdisciplinary research productivity, technology may be at the heart of our thinking, but one industry organisations – the IPA, the APG and the marketing communications and advertising. transfer, advertising effectiveness and the must question whether that’s a result of MCCA – and has chaired the APG. With each disruption, a new equilibrium has development of new metrics for new media. 35

COMMENT In this new ‘me-centric’ rather than ‘brand-centric’ world people are bound to be less tolerant of unplanned, under-resourced, badly trained, disconnected, deaf-eared customer service. care and attention or because they are the agency respondents believe that intolerance We need to get away from the idea that Clare O’Brien bulls-eye, our ‘target’. What the customer for poor customer service would increase websites are all about promoting and selling. wants is greater simplicity and they are over the next 12 months. The company figure This means bringing together an organisation’s increasingly becoming more intolerant of has almost doubled since last year while the selling and the servicing objectives, skills and poor service. Yet many of the mechanisms we We need to treat agency statistic is 15% higher. Combine this experience into a single web presence that’s discuss – mail, blogging, creation of Facebook the web as a key with the finding that almost 40% of clients meaningful for all visitors. More than ever we pages, Tweeting – are too often used as part of a customer’s are looking to use customer engagement need content strategies that meet the needs things we do ‘at’ a customer, rather than with engagement strategies to achieve long-term customer value of all constituents, and the organisation as them. We also need to treat the web as a key with a brand; it is and it begins to look obvious that customer a whole. part of a customer’s engagement with a brand; no longer just a Creating business-wide engagement is a business-wide concern. it is no longer just a discount-driven order discount-driven Clare is a member of the cScape Customer completion channel. order completion content engagement In this new ‘me-centric’ rather than ‘brand- Engagement Unit and co-founder of CDA, the channel. centric’ world people are bound to be less content strategy and digital communications strategies to increase long tolerant of unplanned, under-resourced, badly consultancy. She’s also helped found the UK The ‘customer model’ will term customer value trained, disconnected, deaf-eared customer Content Strategy Group and is developing CUT, become the business model. service. It’s even more unforgivable if good a methodology for measuring and evaluating So much energy in online marketing and customer service isn’t made available right up content value. Our new challenge is to reduce the rhetoric customer engagement is focused on building front, online. of persuasion, promotion and pestering customer relationships for acquisition that the David Dodd and openly engage in a conversation – not place where the real relationships are fixed Ten years after Godin pointed out that valuable simply appropriate the tools of conversation. or broken – customer services/customer ‘personal permission’ to market to someone Responsiveness, consideration, flexibility, support/account management/member could be cancelled as a result of a single openness and dependability will be some of services – is often sidelined at the planning and incident of bad service or interaction we’re still the hallmarks of this new behaviour, and this resourcing stage. Whatever it’s called, it’s the making people hunt for contact information will demand a level of self-knowledge as well point at which the often expensively acquired or returns processes, (tried that with Amazon as a more developed view of the customer. customer is handed over to another part of lately?) Broadly speaking, websites are geared the organisation. towards selling; they’re not set up to answer If 2009 represented the maturing of social questions from existing customers. The era of the caged beast media tools to further our business goals, Marketers know that this is a vulnerable 2010 will challenge us to predicate our situation. So why not – right from the initial People are realistic. They don’t expect is over. business on a more rounded view of our concept when in an ideal world a content perfection. It seems that one of the lowest The last 12 months saw the continued rise of customers’ multi-channel commercial strategy is created – collaborate to ensure that cost and fastest routes to satisfying existing a ferocious breed of beasts, unfairly caged by behaviour: the ‘customer model’ will become the engagement established at the beginning customers is to make it really obvious where their owners. Or, to put it less sensationally, it’s the business model. of a relationship with a new customer is to go for help; engaging them by positioning about time we stopped treating rich content as extended to maintaining and developing that a visible and obvious ‘complaints’ button, Ian Jindal is a consultant, leading transformation some sort of rare and rabid animal. relationship into long-term value? for instance. Use customer engagement through eCommerce in Retail and Publishing. techniques to turn complaining into a positive Video has the highest potential to engage. He is the founder and Editor in Chief of Internet The finding that leapt out at me from this experience rather than intensifying their The survey results this year bear this out. For Retailing, created the MSc in Internet Retailing & year’s Customer Engagement Survey was the negative feelings towards a brand by hiding example, companies saw a 31% rise from last co-founded www.europeanecommerceforum.org. one that shouted: 61% of client and 57% of it away. year in tangible improvements seen where 36

COMMENT in-site video is used. Video captivates and Ubiquitous Computing - the dawning of the geographical location, the puzzle of it is to find Marc Sibley compels the user but it should not be fenced Age of Ubiquity perhaps? out where that might be. off in a dark corner marked ‘here be dragons’. Of course, this sounds like an amateur mistake. The catalyst for this transformation has been Most of these excursions away from the Why would anyone hide their most exciting the iPhone 3GS and how it has completely Brace yourself. desktop are largely niche and experimental content? Yet the natural step when adding new altered people’s perception of what a phone It’s going to at present – apart from mobile. Although our types of content is to create new spaces to can do. completely survey suggests that corporate brands are still match. Under this logic, users must first make a revolutionise the tentative in their use of mobile, the mobile The growing number of augmented reality commitment to find and watch the video, then way customers phone now has the combined utility of the apps for the iPhone have started to become try and remember why it is relevant to them. The dawning of the age of ubiquitous, utilising the compass, camera and engage with fixed telephone, internet, computer, credit card That’s asking too much. brands over the and TV. Brace yourself. It’s going to completely ubiquity GPS system within the phone to lay virtual next few years. revolutionise the way customers engage with Even when rich content is well placed within data on top of the physical world. Wikitude brands over the next few years. This September I listened to Adam Greenfield AR Travel Guide enables you to hold up your the architecture of a site, it is often still treated (Nokia’s Head of Design Direction for user phone and see Wikipedia information on the Marc is a designer at cScape. He has over 12 years with the same kid gloves. How many times Interface and services) prophesise a future site you’re looking at, similarly ‘Nearest Tube’ experience working within all aspects of interactive have you seen video which only serves to of Ubiquitous Computing. He defined this as from Acrossair allows you to be directed to the design, including information architecture, repeat the message that already appears in text a post-desktop world where computers are nearest tube station. usability and accessibility for customers such as or images on the page? At the other end of the totally integrated into everyday life and where Barclays, CIPD, Carbon Trust and CILIP. scale, we shouldn’t assume that video content Debenhams’ experiment of giving staff smart the physical world is a searchable place like the always has to tell an elaborate story with a phones to answer customer enquiries in stores internet is now - an ‘internet of things’. sweeping narrative arc. The ability of video to through Twitter had the ring of something explain and illustrate difficult points, whilst still Aurélie Pols keeping users engaged, is unparalleled. Most of the innovative approaching ubiquity. Digital agency Poke went one step further by creating a physical device and interesting things that that Tweets - “Baker Tweet” sits in the baker’s In the coming year, I hope that corporate and happened in 2009 were an kitchen and informs the bakery’s customers agencies act on this year’s survey results and that well-placed video that enriches the user exploration away from the when something is fresh out of the oven. experience and assists the customer journey desktop 2009 also saw a movement away from the will be used more frequently online. With this slickness of the touch screen to a more tactile free-range attitude to rich content, the dark I realised that most of the innovative and era of caged beasts will be over and a brighter, interesting things that happened in 2009 in and crafted place. Inspired by (former Nike Full-service digital Global Consumer Planning Director) Russell leaner animal will emerge. the interactive arena were an exploration Davies’ great call to action “We’ve broken agencies, Where Art Thou? away from the desktop – a move toward a your business, now we want your machines”, David develops video, audio and motion solutions more physical type of engagement. In the Being able to help companies define their across multiple sectors and a vast array of digital The Newspaper Club is using under-utilized same way APIs and widgets find inventive customer engagement online requires a platforms. He is a member of the cScape Customer printing presses to create bespoke and ways to use and engage with the data already good understanding of their underlying Engagement Unit and Director at Lightweight beautiful newspapers from customers’ digital flowing through the web, a new generation of financial set up, as well as an holistic view of Media with a varied client base which includes content. Then there is the GPS puzzle box, a physical tools and interfaces are bringing the their inherent digital communication plans. Design Council, Barbican Centre, Carbon Trust, wedding present crafted out of wood by Mikal virtual back into the material world. Could this The supply side of web analytics, other than Vodafone and British Library. Hart, which is set to open in one particular exploration be the first tentative steps towards from technology providers/vendors, remains 37

COMMENT very fragmented with over 45% of specialist they aren’t held fully accountable for their of this resource. Organisational incoherence, agencies showing a turnover of less than £1 results, companies will continue to struggle culture or lack of will is still a major barrier. Steven Woods million per annum and over three quarters less with their digital communication strategy as The overall impression is that companies are than £10 million. well as its measurement. experimenting with social media rather than As long as only a embracing it wholeheartedly. Because of this, Taking all of this into account, it is not small fraction of Aurélie is one of the most respected voices in the better understood media tactics like email surprising that many agencies don’t know revenue generated web analytics community worldwide and Europe’s newsletters are still top of the pile although whether the worsening economic situation by full service foremost thought-leader on the subject, first as the the percentage growth this year has of this has put any additional emphasis on customer digital agencies is Head of Analytics for Belgium’s OX2 and then category is far less than last year. That’s a huge engagement measurement or that only attributed to digital as the Director of Analytics for LBi’s global web step back. Experiments with the a few consider their clients to actually have measurement and analytics efforts before joining Web Analytics a customer engagement strategy. they aren’t held Demystified. Equally, the comparatively smaller adoption of wisdom of crowds fully accountable social networking techniques and technologies When agencies say that companies measure for their results, Zia in internal environments is interesting given Customer engagement is at an interesting customer engagement to increase market companies will that two-way communication with one’s staff transition point. This year’s survey results share and conversion rates, one has to continue to Zareeem-Slade during recessionary times is particularly indicate that there is acknowledgement that wonder whether the web analytics service struggle with important to keep them motivated. Hopefully, the crowds have wisdom as evidenced by the provider/client relationship is an optimal one. their digital we will see an improvement next year. strong adoption of social networks and user Interestingly enough, in the latest survey, communication ratings, we well as mechanisms for feedback agencies and clients don’t seem to care as strategy as well as From the ivory towers downwards, there has to on product development, innovation and much as last year about reducing customer its measurement. be a corporate mind shift and a relinquishing customer support. The comparatively smaller service costs which seems to be a missed of control to engage both staff and customers. adoption of these techniques and technologies opportunity. To boldly go If you want people to truly engage, you have in internal environments shows that the to let them talk and you’ve got to actively sense of their value is truly around broader If agencies are just measuring what’s As I share my thoughts on customer listen. Digital democracy will allow brands engagement, not just communication. out there and aren’t able to pro-actively engagement, I wonder if I should jump on to reap benefits; just look how it’s paid off suggest new and better ways of using digital the ‘brandwagon’ and try to express myself However, although there is clearly the sense for Dell. If all of the companies on the social communication, the closed loop model of data via a Tweet or a rant on Facebook. I’ll be that social tools have tremendous potential, the media fence move from experimentation to driven decision making remains isolated and is in good company; according to this year’s survey also shows a hesitation to truly engage a full-blown push in the coming months, next not closed at all. Customer Engagement Survey, 44% of with them across the organisation. When year’s survey results could be even more companies will be using social media to gain pushed for tangible benefits, better-understood While proving a return on investment interesting than this year’s. user ratings and feedback. media types like email newsletters score more remains one of primary barriers – on top of Zia has over 10 years of experience in creating highly. There is also a sense that social media lack of alignment of technology, resources Although there is clearly the sense that social digital experiences. She worked at MFI UK as is being experimented with and as such very and processes – for investing in measuring tools have tremendous potential to engage the Head of eCommerce. Zia is now Head of few organisations have either hired extra staff customer engagement, the debate should customers, the survey also shows a hesitation Experience Planning at EMC Consulting (formerly or dedicated a social media budget. not solely be limited to measurement. to commit to them across organisations. While Conchango), working with clients such as Virgin As long as only a small fraction of revenue over half of the companies surveyed claimed There is a clear sense though, from the Media, John Lewis, Virgin Atlantic, Tesco, generated by full service digital agencies to have specific teams dedicated to social dominance in web analytics as a method of T-Mobile and B&Q. is attributed to digital measurement and media, their agencies were slightly less sure gathering customer intelligence and that the 38

COMMENT Digital behaviour patterns of online buyers are seen as the best source of marketing insights. digital behavior patterns of online buyers are important changes. While attributes of an • ‘An exclusive invitation’ (the Roundhouse) Lucy Conlan seen as the best source of marketing insights. engaged customer were largely based on their As our ability to interpret the behaviour we see readiness to convert, participation in online • ‘Enjoy a £9 adventure’ (National Express) in social media into similar insights increases, communities or support groups is gaining in • ‘Cracking discount on nut trees’ (Dobies of we will almost certainly see organisations importance. Email largely remains the method Devon) investing more time and resource into it as an of choice to keep customers engaged while activity. 2010 will certainly be an interesting investments in social networks, videos and • ‘Get them while they’re still hot’ (First Direct) year for marketers and their customers alike. micro-blogging activities are likely to increase. The thing about surprise is to keep the Steve is the CTO of Eloqua and author of the new As predicted, resources (budgets, staffing Planning surprises suspense as long as possible. I recently book Digital Body Language – Deciphering and time) remain an issue for agencies and received an email from Dell with the subject Customer Intentions in an Online World. their clients. But when compared to the 2009 Although this may sound like an oxymoron, line ‘Win VIP tickets for the 2009 MTV results, the perceived increase in organisational you can plan to surprise and delight your European Music Awards!’ I was intrigued Stéphane incoherence and lack of a business case as customers. People’s memories can be fickle enough to open the email which was clear well as the growing lack of skills, experience and we tend to polarize what we remember and punchy, but the real surprise came Hamel and understanding is interesting. At the same of the past – the best of times and the worst. when I clicked through on the link ‘Join the time, technology is less of an issue and focus I would recommend increasing the number World’s Largest Online Choir’. To enter the is shifting from short term to longer term of positive memories to your customers competition, you had to record your own objectives. Those results correlate with the through email. version of ‘Lollipop’ and your rendition would ‘Web Analytics Maturity Model’ assessment be entered into a video wall. The sound was As this year’s survey results continue to show, that management, governance and adoption The thing about synchronised so that you were singing along at surprise is to keep email newsletters can be the most powerful are the most important success factors, while the same time as everyone else the combined Tip: engage management the tools are one of the least important. That the suspense as tool in driving qualified traffic to your website. impact of the individual and the group was long as possible. With the rise in the volume of email traffic, into customer engagement is, which tools you use has less to do with your standing out can be difficult. However, if you immediately apparent (http://ema.mtv.co.uk/ success than change management toward a amplichoir). The competition is now closed but In last year’s survey, we saw that customer have a dedicated newsletter with the same customer engagement culture, the objectives you can still enter your recording – Dell are engagement was perceived as important, subject line each month, gaining stand out may you set and how you execute toward them. really capitalising on their surprising content. yet few companies had defined a strategy. I be easier than you think. A surprise may take opined then that organisations with a strong Over 60% of surveyed agencies and the form of wishing someone happy birthday, In essence, shake things up a bit; permeate and genuine customer focus might be able organisations say their customer engagement prompting for their opinion, reminding them your standard email/online output in a way to face the economic troubles more easily strategies have been successful. This reinforces that Valentine’s day is around the corner or a that makes your customer stop and think about and get out of it with a stronger position the fact that a longer term, a more strategic teasing line such as ‘We never thought it would you in a positive way and enjoy the ‘feel good’ than their competitors. The economy approach towards buyer/seller relationships happen...’. Subject lines that have stopped me factor. remains harsh, but perceived importance of might be more profitable than solely focusing in my tracks before have been: Lucy is a digital marketing consultant and member customer engagement is even stronger than on short term conversions. • ‘Feed the Birds Day is here’ (RSPB) of cScape’s Customer Engagement Unit. Lucy’s last year. Year-on-year comparisons, show Stéphane is a leading voice for online analytics, direct marketing background was gained in the that strengthening the emotional investment • ‘Why.....................’ (my cousin Marie Markey) helping businesses understand the value charity and cultural sector, having worked at the adapting to the increased importance and of performance measurement and process • ‘What is your song of the decade?’ (Absolute Barbican, English Heritage, British Red Cross and power of customers and gaining more optimisation. Radio) the Natural History Museum. customer insight are among the most 39

COMMENT The new forms of online social connectedness that we can see facilitated through tools like Twitter have spilled out into the ‘real world’. this approach to the next level and create Becky Caroll Richard Sedley A key part of the digital business strategies a cohesive strategy across the organisation. we develop for our clients, now rests on the Social media has brought many new integration of face-to-face networking, whether customer touch-points and with those come internal (employees/suppliers) or external opportunities for customer satisfaction – or (brand/customers). The 61% of companies failure. Perhaps now we have too many choices surveyed in this report who intend to increase for customers as companies have created investment in social networks and 27% & 44% these touch-points often just to be ‘available’ who intend to increase investment in on-site in social media. These critical interactions branded communities and micro-blogging Customer engagement must be co-ordinated with the company’s The death of digital respectively, would do well to consider other areas, including customer service. In integrating activities beyond online if these key ingredient: the human fact, intolerance of poor customer service Back in January 2006 when we setting up investments are to reap maximum reward. the Customer Engagement Unit I wrote factor and a desire for simplicity may be driving a discussion paper called ‘The death of customers to seek fast relief by complaining What I had grasped more successfully four What a difference a year makes! In last digital’. It was based on the recognition that years ago was a shift from digital being a in social media channels. This may provide year’s Annual Customer Engagement Survey, digital was becoming increasingly central to desktop PC paradigm. In just the next couple fast relief for customers but headaches for an companies were just starting to embrace effective business activity, so much so in fact of years we’ll be seeing the proliferation of uncoordinated company experience. new ways to create engagement with their that pretty soon all business would become many different types of digital screen. We customers. Each new foray into the ‘social Now more than ever, the process of engaging digital thus rendering the distinction between already have digital readers making an impact media space’ was hailed as ground-breaking companies will move beyond organisational digital and non-digital irrelevant. So no need into the book market. Touch-screen phones and innovative. Fast forward to this year’s silos. Companies will use their understanding to even mention digital – hence its death. are proliferating and before long digital screens fourth Annual Customer Engagement Survey. of customer needs to find ways to meet them Intolerance of poor will be large enough, flat enough and flexible I was both so right and so wrong in equal Companies and their agencies have been in a relevant way - through whichever touch customer service enough to transform any surface into a read/ measure. busily putting up Facebook fan pages and point the customer chooses to use. They and a desire for write interface. Framed in this context the starting Twitter accounts so they can be will move from ‘influencing customers’ to simplicity may be What I had failed to grasp was the extent to fact that only 6% of companies say that they found ‘in social media’. There has been some ‘customer collaboration’ through ongoing and driving customers which the social tools being developed would have integrated mobile seamlessly into their impact of this communication with customers meaningful discussions. These activities, when to seek fast relief customer engagement strategies seems pitiful. expedite the desire for face-to-face interaction. online. Companies state in the survey that coupled with proactive customer listening, will by complaining The new forms of online social connectedness their engaged customers are most likely to be deepen customer relationships over time and in social media With potentially every surface an opportunity that we can see facilitated through tools hence customer loyalty and value. channels. to connect, interact and engage, ‘the death recommenders to others (online influence is like Twitter have spilled out into the ‘real of digital’ poses some incredible business high), they are participating in more online world’ in the form of conferences, Tweetups Becky is the founder of Customers Rock!, a opportunities for next decade. communities and forums, and they are and other networking soirées. As the old strategic consultancy focused on engaging regularly giving feedback to the company on forms of community in western societies Richard is Director of the cScape Customer customers. Clients have included EA, HP, Fujitsu, its products and services. were fragmenting and becoming redundant, Engagement Unit. He is the author of Winners Verizon, and Ford. Previously, Becky served as there were new social networks connecting and Losers in a Troubled Economy: How to All of this is good news as the momentum Director of Social Media for Brickfish and as a individuals in physical ways not just virtual. Engage Customers Online to Gain Competitive shifts even further towards prioritising the Senior Consultant with industry-leading Peppers Not surprisingly businesses want, and indeed Advantage. Richard is also Course Director customer and the value they bring to the and Rogers Group. She also worked at HP for 14 need, a piece of this action. for Social Media at the Chartered Institute of company. However, it is now time to take years as Director of Marketing, UK. Marketing. 40

Survey promotion partners Making the most of your potential connections, Foreplay is a digital engagement agency Avantless enables business development located in São Paulo, Brazil, the financial heart strategies in the service industry through of Latin America. Foreplay believes in the innovation. power of providing unforgettable experiences to consumers, instead of interruptive messages Changes in business development and that add to the cluttered environment we all customer environments are root causes for live in. companies to accept customers as deeper influencers at the heart of new value creation We adopt an holistic approach, centered processes. New paths emerge driven by open on leveraging customer intelligence and networks and transparent connectivity where identifying their real needs to provide perceived users, service/product providers and social value across digital channels. agents create new models of collaboration. Avantless aims for leveraging authenticity into This is achieved by understanding the service innovation as new growth strategies content, entertainment, media and purchasing for differentiation and success in the network habits of key audiences and by crafting economy. shareable messages and experiences that are meaningful and productive to companies and www.avantless.com consumers alike. Foreplay believes in the power of big dreams supported by passionate execution. www.foreplay.com.br

The value of the report This is the fourth year of the Annual Customer a brand that is in the public eye it’s almost Using specialist companies to help you with Engagement Report and, as usual, it provides certain that your customers will be discussing engagement can not only help you shape your some very useful insights into what to expect it online anyway, regardless of whether you brand online and increase loyalty, but can also in terms of future engagement trends. have decided to join the engagement party. calm any corporate fears that may accompany For example, the fact that sensitivity to price According to Technorati, there are already forays into unknown digital territory. cScape is less of an issue for both companies and almost 60 million blogs and about 100,000 have always led the way not only as thought agencies in 2010 than in 2009 when we new ones are being created every day, not leaders in online customer engagement but are still in recession is just one of the many to mention comparison sites, video logs, in combining this with creative and technical interesting nuggets that will help you plan for podcasts and photo distribution outlets like engagement campaigns that deliver proven 2010 and beyond. Flickr. If you get involved, you can help shape and measurable results. So if, as the survey the debate, benefit from involving your suggest, your company lacks the internal That 2010 will see the continued rise and rise customers in discussions on future products resources, skills and understanding to of social media confirms predictions but what and services, demonstrate Corporate Social effectively engage your customers through is surprising is a number of major brands have Responsibility and show the ‘human face’ of social media and other means, it’s time to call still to realise its full potential. If you have your company. in the experts! Michael McClary Web Agency Platform Strategy Advisor Microsoft www.microsoft.com Repeated interactions that strengthen the emotional, psychological and physical investment a customer has in a brand (product or company). Definition of customer engagement

4th Annual Online Customer Engagement Survey Report 2010

by Richard Sedley

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