Making Customer Engagement Profitable

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There’s some difficulty reaching a consensus on what customer engagement is and how to do it, which is why we began a research programme
in 2009 to produce clearer guidelines for our current and prospective clients.

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Making Customer Engagement Profitable

  1. 1. • Introduction • Researchprogrammeandmethodology • LevelsofcustomerengagementfortheUK’stopbrandsin2009and2010 • Thecustomerengagementsurvey(marketers)2009 • The2010followupsurvey(customers)2010 • Listenandactinaction
  2. 2. Introduction TargetbaseClaydonHeeleyisanintegratedmarketingagencyspecialisinginCustomerEngagement.Targetbaseisone oftheUS’sleadingdatadrivenbusinesses.ClaydonHeeleyisaUKagencywitha20-yeartrackrecordofawardwinning creativework.Togetherourmissionistoproduce‘smartercreative’. CustomerEngagementisoneofourmainareasofexpertise,andwe’veseenitbecomeahotlydebatedsubjectinrecenttimes. Aquicklookonlineshowsjusthowwidelytalkedaboutitis,withpractitionersacrosstheindustryofferingseveraldefinitions: “Repeatedinteractionsthatstrengthentheemotional,psychologicalorphysicalinvestmenta customerhasinabrand.“ RichardSedley,cScape “Thelevelofinvolvement,interaction,intimacy,andinfluencethatanindividualhaswithabrand overtime.” BrianHaven,Forrester “(Customerengagementis)proactiveinvolvement.” Peppers&RogersGroup “CustomerEngagementenablesorganizationstomoreeffectivelyrespondtothefundamental changesincustomerbehaviourbroughtaboutbytheInternet.” Wikipedia “Well-establishedbehavioursthatdemonstrateinteractivemulti-channelbehaviouralattachment andthatreinforcecommitmenttothebrand.” Alterian “Adeeper,moremeaningfulconnectionbetweenthecompanyandthecustomer,andonethat enduresovertime.” TheEconomistIntelligenceUnit Sothere’ssomedifficultyreachingaconsensusonwhatitisandhowtodoit.That’swhywebeganaresearchprogramme in2009toproduceclearerguidelinesforourcurrentandprospectiveclients.
  3. 3. Research programmeandmethodology CustomerEngagementSurvey(Consumers),June2009 AnonlinequantitativestudyinconjunctionwithCCBfastMAP.Wesurveyedanationallyrepresentativesampleof1,200UK consumerswhoidentifiedthemselvesascustomersofsomeoftheUK’stopbrands. Wesetouttounderstandtherelationshipbetweenacustomer’svalueandtheircorrespondingengagementwiththe brand.Thesurveytookaround15minutestocomplete. CustomerEngagementSurvey(Marketers),December2009 InconjunctionwithMarketingSoftwareSolutionsweranindepthtelephonedepthinterviewswith10seniormarketers, whichwefollowedupwithanonlinequantitativesurvey,completedbymarketingprofessionalsfrom11industrysectorsand 68companies. CustomerEngagementSurvey(Consumers)&Follow-UpSurvey(Consumers)June2010 An online quantitative study in conjunction with CCB fastMAP amongst a nationally representative sample of 1,300 UK consumers.Wesetouttounderstandhowcustomersseetheissueofcustomerengagement;howthey’ddefineitandwhat theyvaluemost/leastintheirrelationshipswithbrandsofwhichtheyarecustomers.Ittookaround15minutestocomplete.
  4. 4. Levels of Customer Engagement forthe UK’s top brandsin2009and2010 In2009wesurveyedcustomersofsomeoftheUK’stopbrands,namely:Boots,M&S,Google,Easyjet,Barclays,LloydsTSB, BritishGas,MBNA,BTandThePostOffice. Wewantedtofindouthowengagedtheywereascustomersofthesebrands.Inparticular,weaskedthemhoweachbrand measuredupagainsteightkeyrationalandemotionalmeasuresofengagement: •Straightforwardtodealwith •Bestatwhattheydo •Understandsme •Representsgoodvalue •Makestimetorewardme •Caresaboutmorethanjustmymoney •Meetsmyexpectationsfully •Relatestomebest/well Atthesametimeweaskedwhetherthiswasabrandtheywould: •Recommendtoothers •Purchase/useagain Thisgaveuseachbrand’sEngagementIndex,whichyoucanseeplottedhere: 2009CustomerEngagementIndex 77%ofcustomersin2009 notengaged
  5. 5. Amazingly,over2/3ofcustomersonaveragein2009didnotfeelengaged(horizontalaxis)withthebrandsofwhichthey werecustomers. Whenweranthesamesurveyagainin2010wefoundthepicturelargelyunchanged: 2010CustomerEngagementIndex Still over two thirds of customers (68%) do not feel engaged with the brands of which they are customers. Any small improvementsinengagement(horizontalaxis)in2010hasnotcorrespondedinanincreaseincustomervalue(verticalaxis) In201068%ofcustomers notengaged
  6. 6. TheCustomer EngagementSurvey2009.Marketers Backin2009we’didentifiedaworryinggapbetweenmarketersandcustomers;somethingdidn’tseemtobeworking. SointheMarketer’sSurveyattheendof2009wesetouttounderstandhowmarketerswerefeelingaboutandresponding totheissueofCustomerEngagement.WewantedtounderstandhowCustomerEngagementisbeingdefinedin businessestodayandhowmuchitfeaturesinthemarketingplan. Weexpectedtofindcustomermarketerscallingforhelp.Butitwasquitetheopposite;theytoldustheywereconfident, investinginit,andbeenfocussingonitforthepasttwoyears.Hmmm. Findings–Awareness •82%haveacustomerengagementstrategyinplace. •30%ofrespondentshavehadastrategyinplaceformorethan2years. •Only6%claimto‘rarely’or‘neverhearabout’customerengagement. •74%sayit’ssomethingthey‘hearaboutallthetime’. Findings–Focus •87%ofrespondentsare‘investinginitrightnow’. •24%are‘investingheavily’. •63%‘investingsomewhat’. •Just10%arenotinvestingorplanningtoinvest‘forthemoment’. Findings–Confidence •78%believewhattheyaredoingis‘somewhateffective’or‘extremelyeffective’. Findings–Barriers •Thebiggestbarriertodoingmorewas‘lackofavailablebudget’,citedby6outof10respondents. Doit right Profitablecustomerengagement Akeybarriertohavingacustomerengagementplanislackofbudget,theTBCHClientSurveyshowed. Here’showtojustifyhavingone: •Createastrategy thathasmeasurableKPIs. •Buildquickwinsintotheplantocreatepaybackandmomentum. •Choosetechnologythatconnectsallthedatasourcesformultichannelcommunication. •Makeitintegrated.Connectallcustomertouchpoints-includingclient-facingstaffandcallcentres.
  7. 7. The2010 Follow Up Survey2010.Customers Confidentthattherewasaseriousdisconnectbetweenmarketersandcustomers,wesetouttodefinecustomer engagementinourfollow-up2010CustomerEngagementSurvey. Customer Engagement is not something to be taken lightly; there are major upsides for a brand in getting it right. We went on to find that two thirds of us are willing to show support for our favourite brand through positive word of mouth, increased spend, recommendation and so on. But the picture is pretty much reversed when it comes to our bank, telco and supermarket relationships. IntheFollowUpSurveywesetouttoarriveatadefinitionofCustomerEngagementwecould hangourhatson-something thatclientscoulddevelopintoastrategyforimprovingtheengagementtheyhavewiththeircustomers.Sowhobetterto askthancustomersthemselves?Afterall,failingtoaskthemwheretheystandonthisissuemightbewherewe’veallbeen goingwrong. Wediscoveredthatwhilewepractitionersmightstruggletoagreeonadefinition,customersthemselvesweremuchmore aligned.Theytoldusloudandclearwhatcustomerengagementmeansforthem. Thecustomerdefinitionofcustomerengagement Offering1,300UKconsumersseveralpotentialdefinitionsofCustomerEngagement,weaskedthemhowbrandsshould buildbetterrelationshipswiththem. Theyoverwhelminglysaid:“Listentowhatcustomershavetosay–andactonit”. Toouramazement,wefoundthisunanimouslysharedacrosstheageandgenderspectrum. Wewerealsosurprisedtofindthat “Giveyouspecialcustomeroffersanddeals”and“Giveyoumore,thelongeryouarea customer” provedtobemuchweakercontenders.
  8. 8. Themostpopularwaysofexpressingtheirengagementforabrand Wewerealsointerestedtoknowwhatbrandscanexpectfromengagedcustomers.Inotherwords,whatvaluedoengaged customersofferbacktoabrand? Soweaskedthemtotellus: “Inthelast12monthswhathaveyoudonetoshowyoursupportforyourfavouritebrand? Pleasetickallthatapply.” Neckandneckatthetopwediscoveredthatthemostpopularwaysofexpressingorshowingtheirengagementforabrand are‘boughtmorewiththem’and‘recommendedthemtosomeone’.Bothhighlyvaluablebehaviours. Wherecustomerssaybrandsshouldfocustheirefforts Nowwehadourdefinitionforcustomerengagement“listentowhatcustomershavetosay–andactonit”wewantedto findoutwherebrandsshouldfocustheirefforts?Whatexactlyshouldtheybelisteningtoandactingon? Wethoughtcustomerswouldknowthisbestofall.Soweaskedthemhowtheywantedtobemadetofeelbythebrands theychoose;thevaluestheyholddear.Wegavethem16options: •Uptotheminute •Empowered •Organised •Stylish •Clever •Understood •Confident •Respected •Ethical •Loved •Important •Individual •Worry-free •Exclusive •Informed •Excited Irrespectiveoftheirdemographicprofile,customersagreedon: •Respected •Worry-free •Informed •Confident •Understood •Organised Itmightcomeasasurprisetosomethattheywerecoldertotheideaofbrandsspendingtheireffortsmakingthemfeel: clever,loved,stylish,up-to-the-minute,empowered,exclusiveandexcited.Arguably,thesearetheessentialsofbrand engagement,ratherthancustomerengagement.
  9. 9. Deliveringthesevaluesintherealworld Testing how well these values are delivered in the ‘real world’, we asked customers how well their bank, telco and main supermarket fare in these six areas: how engaged they are in those relationships and what have they done in return for the brand. Thegoodnewsisthatforthesecategoriestheyappeartobeontherighttrack. Butwhilethesethree“everyday”categoriesseemtohavetheirprioritiesintherightplace(inotherwordstheymakea biggereffortintheareasthataremostimportanttocustomers),theyfalldreadfullyshortonexpectations. Thesadfactisthat,overall,theyaren’tdeliveringonthesevaluesnearlyenough. Insomeareaslike‘worry-free’,‘confident’and‘informed’thisisverypronounced.Withthesesixvaluesthey’retellingus whereweshouldbespendingourefforts,andwherewearewayoffthemarkinourday-to-daydealingswithcustomers.
  10. 10. Theshiftingimportanceofthemagic6 Wealsodiscoveredthatthevaluesthemselvesplayedadifferentroleeachtime.Someofthevalueswerebetteratmaking customersfeelgoodabouttherelationship,somebetteratpropellingcustomerstoactonthatengagement.Furthermore, ineachcategorytherewasonevalueseeminglyabletodriveboth.Fortunately,atleastonebrandineachcategoryseemed tohavecrackedthis. ForBanks,‘informed’isthedriverforbothagoodrelationshipandcustomersexpressingtheirengagement(showing support).SmileandFirstDirectdobestatmakingcustomersfeel‘informed’. ForTelcoitis‘worry-free’.O2andVirgindowellatmakingcustomersfeel‘worry-free’butO2doitbest.Themaindriverfor Supermarketsis‘respected’.
  11. 11. Here,Marks&SpencerandWaitrosedothebestjobofmakingcustomersfeel‘respected’.
  12. 12. Thehard-to-engagecustomers Interestingly,theresultsfor“showingtheirengagement”suggestthat35%ofallcustomersareextremelydifficulttoengage. Inoursurveythey stronglydisagreed withthefollowingstatements: ‘IfshortofcashI’dratherbuyoruselessofaproductthandowngradetoacheaperbrand.’ ‘Iwilloftentrytomakerecommendationstofriendsandfamilyonbrands/productsIthinktheymightlike.’ ‘Whenasatisfiedcustomerofabrand,Iwouldalwaysconsiderbuyingtheirotherproductsbeforeseeing whatcompetitorshavetooffer.’ Thesecustomersfailtoidentifyawaythey’vesupportedtheirfavouritebrand.Andthepicturegetsworsestillforthe essentialeverydayrelationshipsweallhavewithbanks,supermarketsandmobilephonenetworks. Wherebrandsmightbewastingtheireffortsoncustomerengagement Furthermore, our survey revealed a hardcore group of customers for whom customer engagement may always be unachievable. 30% of all customers in our survey showed no engagement for their mobile phone provider, bank and supermarket. Of those, around 2/3 also refused to show their support for even their favourite brand. This equates to 19% of all customers. And they showed a bias towards being male.
  13. 13. Listen and act in action Yourcustomershavespoken.Theywantyouto“listen–andact”. Soacrossallchannelsapplythisframeworkandaskofyourbusiness: LISTEN areyoulisteninginalltheplacesyourcustomersaretalkingabout yourservice/product Show you arelistening haveyouacknowledgedyourpresence/takenthetimetothankcustomersfor theircontribution ACT howquicklydoesittakeyoutoactonwhatyoufind,andareyou usingtheappropriateprivateorpubliccustomerchanneltodoso SHOW YOUHAVEACTED areyoudiligentaboutcheckingbackinandannouncingyouractionssoyour customersknowyouhaveacted ‘Listenandact’istwo-way-andsoissocialmedia Eventhoughsocialmediaistheperfectplacetohaveanexchangewithcustomers(byitsverynatureit’s“two-way”)brands arefailingtogetmoreoftheircustomersengagingwiththeminthisspace. Despitethefactthat: •Globally,65%offirmsuseTwitter •54%useFacebook •Firmsaretweeting25-30timesaweekonaverage •TheyareactiveonFacebookwith3.8postsaweek SOURCE:Burston-Marsteller,Feb2010 Wefoundthatjust4%ofUKcustomersbotherwiththem,evenwhenitcomestotheirfavouritebrand.Wethinkthisis becausesocialmediahasyettobecracked forcustomers. Therearesomeouttherewhoagree: “Peoplecometomydeskandsay’whenarewegoingtogetaFacebookpage?’Isaywewillgetonewhen weknowwhatwewilldowithit,whatwilladdvalueandwhatwillmakecustomerswanttointeractwithus.” RobbieTutt,webdesignanddevelopmentmanageratComet. Thereisnodoubtthatsocialmediagetsbrandsclosertocustomersthanbefore.Andallowsbrandstobemoreresponsive thanever.Butit’snotwithoutitschallenges. Customershavesaidto‘listen–andact’,butwitharound38%ofbloggerspostingbrandorproductreviewsandover3.5billion pieces of content shared on Facebook each week, we can’t listen to everything (Source: Econsultancy’s Social Media Statistic, Jan 2010) Whatwillmakecustomerswanttointeract?Howcangreatercustomerengagementbeachievedinthisemergingchannel? Theanswerliesinthe6valuescustomersdeemall-important: •Respected •Worry-free •Informed •Confident •Understood •Organised
  14. 14. The6socialmediarulesforcustomers Customerswant Respected Andifsocialsitesarewherecustomers Havebecomeusedtosharingtheirexperiencesandideas Thendrivingcustomerengagementmeans: Inviting(andrespondingto)customeropinion Customershaveaskedustodoabetterjobatrespectingthem. SoifwemusthaveapresenceonsitessuchasFacebook andTwitter,weshouldwelcomeourcustomers’participationand(uncensored)feedback.Notonlycanitbeasourceof invaluablefeedbackand‘free’research,donewellitwillmakecustomersbelieveyouarelisteningandtakingthemseriously. Customerswant Worry-free Andifsocialsitesarewherecustomers Feeltemptedtocarryoutrevengeonbrandsthatwrongorignorethem Thendrivingcustomerengagementmeans: Interveningonthekeyissuesandofferingsolutions Surewe’vestartedtoseebrandslikeBestBuyintheUSandCarphoneWarehouseintheUKadoptTwitterasaprimary customerservicechannel,itremainsamassivestepchangeformostbusinessestoday.Stillignoreitaltogetheratyour peril.Dailywehearofiratecustomerstakingtothesocialsitestowarnothersoffabrand.Attheveryleastsettingupa monitoringprogrammewillallowyoutointerveneonthecriticalissuesanddemonstratetoprospectcustomersthatthere aretwosidestoeverycustomercomplaint. Customerswant Informed Andifsocialsitesarewherecustomers Expecttobetreatedasindividuals,noten-masse Thendrivingcustomerengagementmeans: Turningthepublicfactsintopersonalservice Customerswantustodoabetterjobatkeepingtheminformed.Butthere’smoreinformationthaneveravailableonline. Inthisspacecustomersexpecttobeaddressedpersontoperson.Itwouldbeweirdindeedtoaskaquestionandtoget atextbookresponsebackbywayofananswer.Brandsthatusesocialsitestoaddresscustomersone-to-oneearntheir placeonsocialsites–andthefanbasetoproveit.
  15. 15. Customerswant Confident Andifsocialsitesarewherecustomers Catchontonewsfastandpassiton Thendrivingcustomerengagementmeans: Givingthemthefactsbehindtherumourswhenitcounts We’reinanagewherestoriesbreakandnewsexplodesiftheonlinemoodtakesus.Customerswanttofeelconfident, longafterthepointofpurchase,andsocialsitesposearealthreatifthey’renotmonitoredandharnessedfordiscussion. Involvingcustomersinanewsissue,creatinganopenforumfordiscussionandallowingthemtoaskquestionsandgeta responsebackfromthebrandwillleaveapositivecustomerimpressionlongafterthecrisishasdieddown. Customerswant Understood Andifsocialsitesarewherecustomers Arepartofaconversation,notrecipientsofamessage Thendrivingcustomerengagementmeans: Being‘people’notbrandsinthisspace Socialmediachangestherulesofconversation,forcingbrandsengagecustomersinawaytheymightfindalien(atfirst). Interactingaspeople,notbrands,inasocialspaceshowscustomersyouunderstandthemediumandrespecttheir intellect,whichinturnbuildsupcustomertrustandintimacy. Customerswant Organised Andifsocialsitesarewherecustomers Goasaone-stop-shopfornews,information,gossip Thendrivingcustomerengagementmeans: Makingitworththeirwhilefollowingyou Moreandmorewe’reusingFacebookandTwitterasouronestopshopfornews,informationandgossip.Soifyou’re goingtohangoutthere,thencustomerswillneedareasontohangoutwithyou.Newproductinformationortrials,special customeroffers,exclusivesandrewardsshouldbebroadcastthroughthesechannels.Beingquickoffthemarkwilltrain yourcustomerstostaysigneduptoyourfeeds/fanpage.
  16. 16. Yourcustomers havespoken Theytoldus: •Truecustomerengagementis two-way. •Getitrightanddrive greatercustomervalue. •Customersplayby differentrules. •Theycanactasa guide forbehavingsocially. Howare you going torespond?

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