3rd Annual Online Customer Engagement Survey Report 2009


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

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3rd Annual Online Customer Engagement Survey Report 2009

  1. 1. 3rd Annual Online Customer Engagement Survey Report 2009
  2. 2. 3rd Annual Online Customer Engagement Survey Report 2009
  3. 3. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Those organisations able to grasp the changes in our customers’ behaviour and psychology, while placing an emphasis on delivering increased value, will be able to reap the rewards of customer engagement. Introduction Welcome to this, the Third Annual Online This year’s report provides insights into the So what is the role for customer engagement psychology, and ultimately their behavioural Customer Engagement Survey Report. way companies and agencies are continuing within this climate? patterns. For example, in previous economic If we assume This year the survey was translated into four to use the online space to develop stronger and downturns escapism made the cinema, that sensitivity to To effectively engage we must endeavour to different languages and attracted the largest more intimate bonds between our organisations gambling and cosmetics relatively ‘recession price is the sole, understand and provide relevance and this number of participants ever with nearly 1300 and our customers. A year ago we might or indeed the proof ’. Will they continue to be or will companies and supplier agencies taking the all have accurately predicted that email year’s report provides insights into how we most important are targeting and segmenting our customers, alternative forms of escapism predominate? survey. This makes it the biggest survey of newsletters would remain a staple technique motivating quality, What role will the expanding secondhand as well as what methods we are using to learn its type anywhere in the world. for improving online customer engagement, we will have market online play and how can we take how our customers are changing in this new but far fewer might have predicted that 13% missed the more advantage of this? As tightened purse strings Half of you now classify customer engagement world. of companies would look to be investing in subtle interaction encourage conservative purchasing how will as essential to your organisation and your micro-blogging utilities like Twitter. between the Nearly 50% of you recognise that sensitivity a recessionary focus on the family unit express answers indicate that an increasingly changing economic to price will be a key customer behaviour itself online? large number of you understand customer There have been a number of constants across environment and engagement as an activity that delivers value the years that the survey has been running but in the coming year. But if we assume that our customer’s it is the sole, or indeed the most important In our First Online Customer Engagement to both customers and businesses. After all this report is published into a very different psychology. Report published in 2006 I made the point that this is the defining feature of engagement, its world than the previous ones. The shadow motivating quality, we will have missed the “customer engagement is the best measure of true value lies in the development of mutually of a credit crunch in 2007/2008 has already more subtle interaction between the changing current and future performance; an engaged beneficial relationships. turned into full blown recession in some economic environment and our customer’s relationship is probably the only guarantee countries and the impact of international for a return on your organisations’ or your economic woes are predicted to reach well into clients’ objectives”. I still hold this to be true. the next decade. The instability that the market Indeed in a troubled economy the emphasis economy creates for all organisations means on engagement is one of the few activities that it is increasingly difficult to think beyond that can deliver value to both customer and the short term and even the best laid business business alike, over both the short and the plans can be unhinged at a moment’s notice. long term. 4
  4. 4. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 E-consultancy is the leading source of In addition, we host more than 100 events cScape, the research sponsor, is an award- agencies alike. cScape continues to be at independent advice and insight on digital a year, such as The Online Marketing winning interactive agency and a certified the forefront of developing the concept of marketing and ecommerce. Masterclass, regular Supplier Showcases and Microsoft Gold Partner. An emphasis on engagement, with the book Winners and Losers Roundtables, an annual Future of Digital customer engagement underpins cScape’s in a Troubled Economy; how to engage customers Their reports, events, online resources and Marketing event, Digital Cream and a range of integrated consultancy, creative design and online to gain competitive advantage published training programmes help a community social events. technical development services. in early 2008 and a continual programme of of over 75,000 registered marketers make thought leadership events which have informed better decisions, build business cases, find the The E-consultancy site now attracts The cScape Customer Engagement Unit professional and informal online debates about best suppliers, look smart in meetings and 175,000 unique users per month where they (CEU), launched in November 2006, is a team engagement and persuasive design. accelerate their careers. access research, read the blog and take of individuals with decades of experience in part in discussions in the forums. And as a digital marketing and communications, design cScape is also a Microsoft SharePoint Server E-consultancy is an award-winning online portal to the digital marketing community, and technology development. 2007 (MOSS) Centre of Excellence and has an publisher of reports covering best practice, E-consultancy members can also link up with award-winning design team. user experience benchmarking, market data other members and digital suppliers through cScape combines in-depth research into the and supplier selection aimed at internet our directories, as well as find a new job or science of persuasion with the development We have an exciting programme of events professionals that want practical advice on all new digital talent using the job listings. of practical online engagement strategies. Our planned for 2009 and hope you will be able to aspects of e-business. priority is to enable clients to align business come along. Please contact Sarah Woodbridge Some of E-consultancy’s client-side members goals with the needs and interests of their to find out more about events, the Customer E-consultancy also operates a highly popular include: Google, Yahoo, MSN, MySpace, BBC, customers. cScape works with a diverse range Engagement Unit and cScape’s other services training division, used by some of the world’s BT, Shell, Vodafone, Yell.com, Dell, Oxfam, of organisations from the corporate, charity (s.woodbridge@cscape.com +44 (0)20 7689 most prominent brands for staff education, Virgin Atlantic, TUI, Barclays, Carphone and government sectors. 8800). both in-house and via public courses. We Warehouse, IPC Media, Deloitte and Touche, provide training across all areas of digital T-Mobile and Estée Lauder. The CEU has continued to grow over the last marketing and at all levels from one day year and has now developed an international courses to diplomas to Masters in Digital Join E-consultancy today to learn what’s base of partners. This allows the CEU to Find out more about cScape Marketing. happening in digital marketing – and what provide wider services to global companies, cscape.com works. many of whom have contributed to the success Join the debate of the survey this year. customer-engagement-network.com Call us to find out more on +44 (0)20 7681 4052 or contact us online. Since the launch of the CEU and the world’s First Annual Online Customer Engagement e-consultancy.com Survey, the idea of customer engagement has been widely adopted by companies and 2
  5. 5. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 3rd Annual Online Customer Engagement Report 2009 Introduction 4 Comments on the findings Executive summary and highlights 7 Andy Beal – Customer engagement takes center stage in economic 13 downturn Methodology and sample 9 Jim Sterne – Online marketing working. Senior managers sleeping 14 Findings 12 Pete Mortensen – When the customer talks back 15 Customer engagement strategy 12 Ian Jindal – Sustaining profitability in a challenging retail climate 16 Importance of customer engagement 12 Martha Russell – Engagement pinball 17 Do you have a defined customer engagement strategy? 13 Eric Peterson – We (still) need a standard measure for engagement, 19 Interest in customer engagement 14 perhaps more than ever! Behaviour of an engaged customer 16 Becky Carroll – Creating customer engagement on their turf 25 Mapping customer experiences 18 Matthew Bailey – Striking a balance 26 Customer engagement and the troubled economy 18 Stéphane Hamel – When engagements rhymes with commitment 27 Impact of the economic downturn 18 Alex Smith – Invest in the right blend 29 Customer data collection 20 Thoughts on customer engagement Changing customer behaviour and attitudes 21 Lucy Conlan – Tread carefully – the customer is not always right 32 Tactics and Initiatives 22 Clare O’Brien – It’s a meatball sundae Jim, but not as we know it 34 Ways of improving engagement and areas of investment 22 Hugh Gage – Meeting expectations is the first step to engaging 36 Areas of increased interest 22 with your customers Mobile marketing to enhance customer engagement 24 David Dodd – Can rich content mean rich customer experience? 38 Segmentation of audience to identify quality customers 24 Richard Sedley – Can I tell you a story? 40 Issues around customer engagement and key principles 26 Amanda Davie – But I still haven’t found what I’m looking for 40 Barriers to better online customer engagement 26 Lynda Rathbone – Oh the humanity! 43 Key principles of customer engagement 28 Dave Chaffey – Learning to slice and dice 44 Migration of marketing budgets 29 Survey partners 48 3
  6. 6. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Those organisations able to grasp the changes It just remains for me to thank all those who in our customers’ behaviour and psychology, made this the most successful survey to date. while placing an emphasis on delivering Thanks to everyone who participated. To Linus increased value, will be able to reap the and Aliya at E-consultancy. To our partners rewards of customer engagement and will who promoted the survey around the globe: be best placed to emerge winners from the Patrick, Lance, BJ, Ria, Theo and Anne- current economic situation, those that can’t Kathrine. To our contributors: Amanda, Jim, have a lot to lose. Andy, Pete, Clare, Alex, David, Hugh, Dave, Becky, Ian, Eric, Lynda, Stéphane, Matthew and Martha. And finally to my colleagues at cScape: Sarah W, Magda, Sarah B, Tom, Steven, Lucy, Theresa and Rob. We hope you find the Third Annual Customer “Why the focus on customer Engagement Report interesting and useful and satisfaction and not sales?” that you’ll share your thoughts on its content. Andy Beal, p13 Richard Sedley cScape Customer Engagement Director r.sedley@cscape.com 5
  7. 7. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Executive summary and highlights 6
  8. 8. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Executive summary and highlights The Third Annual Online Customer Customer engagement is also widely seen Despite the relative novelty of micro-blogging Engagement Report is based on a survey of as a way of deepening and enriching a product utilities such as Twitter, it is interesting to note 1,291 respondents carried out in September or service offering and a method for gaining that 7% of companies say they have improved Customer engagement and October 2008. customer insight. their customer engagement through this channel. is widely seen as a way Whilst the importance of customer At a time of economic crisis, organisations of deepening and enriching engagement is widely acknowledged, the need to be clear about how customers are Despite the growing importance of customer research found that fewer than half of modifying their behaviour and how this could empowerment, only 13% cite participation a product or service offering organisations (42%) have a defined customer impact them. in innovation and design as an important and a method for gaining engagement strategy in place. customer attribute. customer insight. Sensitivity to price is the type of customer It is clear that whilst companies understand behaviour which responding organisations feel Only 5% of companies have a customer that customer engagement is important, that they will most likely need to address over engagement strategy which embraces the many are still unsure about how to implement the next 12 months. Nearly half of companies mobile channel. a coherent and practical plan of attack. surveyed (48%) said that this would be a Tellingly, less than half of respondents (41%) behavioural trait which was significant for them Lack of resources continues to be a major said that the deteriorating economic climate next year. barrier to successful customer engagement, had resulted in a greater focus on customer although encouragingly, slightly fewer companies now find this to be a major problem engagement. Other report highlights compared to last year (52% compared to 60% The essence of customer engagement is seen Email newsletters are the tactic most likely in last year’s survey). as being about creating relationships which to have driven a tangible improvement result in value both for customers and for in customer engagement, with 59% of Just under a third of companies (31%) organisations. Asked about their organisation’s respondents saying that their organisations say that problems with technology are interest in online customer engagement, will increase their spending in this area. a significant barrier to cultivating better 38% of respondents said that it was about customer engagement. Areas associated with Web 2.0 and social increasing long-term customer value while 34% media such as user ratings & feedback (41%), said that it was about increasing value delivered user-generated content (37%), blogging (36%) to the customer. and brand presence on social networks (36%) are also expected to attract significant sums of investment even though it is not always easy to track return on investment (ROI) in some of these areas. 7
  9. 9. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 The value of the survey In a time when the internet is rapidly taking There is a whole range of possibilities to “It’s time to rally the troops and bring over traditional media, there is no question that engage your audience online. From social online customer engagement is essential. Over networks to user generated content to rapidly the fight to the C-Suites.” the past few years, cScape has taken great expanding mobile technologies, there are Jim Sterne, p14 strides towards becoming thought leaders in more and more ways to reach your customers. the field of engagement, helping companies of Many of these are still largely untapped, and all sizes recognise and understand the benefits are perfect opportunities to invest in for a of online customer engagement to their long-term competitive advantage. business. The most valuable customers you can have Over the past three years the Annual Online are those who know you have made an effort Customer Engagement Survey has shown to speak to them directly, and will happily that recognition of customer engagement has recommend your product/service to their been rising steadily. In this current economic friends, colleagues and family. climate, companies are finding that their online strategy will be vital in keeping their customers engaged. Increasing long-term customer Scott Dodds value and providing them with quality rather General Manager Small and Midmarket Solutions than quantity will be of highest importance. and Partners Group Finding a way to speak to your customers Microsoft on a more individual level will mean greater satisfaction and loyalty. Methodology and sample 8
  10. 10. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Methodology and sample Methodology Geography Figure 2 Company (client-side or in-house): Almost 1,300 respondents took part in an The geographical spread of respondents is In which country/region are you based? online survey1 over a five-week period in shown in Figure 2 and Figure 3 (right). More Base – all client-side respondents September and October 2008. than two thirds of company respondents (71%) are UK- based. UK: 70.91% (273) Survey participants came from E-consultancy’s Europe (outside UK): 9.61% (37) user base, through our network of partners, The agency sample is slightly more global, North America: 9.61% (37) clients and agencies and via promotion across with 37% of these respondents based a range of social media. outside the UK. The survey was available in China: 1.04% (4) four languages: English, Spanish, Greek and Other: 8.83% (34) The majority of respondents are based in Chinese; in an attempt to make this research the UK although there are also significant as global as possible. numbers of respondents from the United States, the rest of Europe and beyond. Respondent profiles The vast majority of survey respondents Figure 1 Figure 3 work either for in-house teams (i.e. client-side What type of organisation do you work for? Agency (including consultants and technology suppliers): organisations), or for external agencies Base – all respondents (1291) In which country/region are you based? (including consultants and technology Base – all agency respondents suppliers). Part of an in-house team (client-side): 44.54% (575) UK: 63.05% (256) For the purposes of this report, we have External agency / supplier / consultant: 45.39% (586) Europe (outside UK): 11.08% (45) carried out separate analysis for both these Other: 10.07% (130) North America: 14.53% (59) groups and the distinction is abbreviated China: 0.99% (4) to company (including not-for-profit organisations) and agency. Other: 10.34% (42) In total, 575 company respondents took part in the survey, compared to 586 agency participants. Company respondents were asked to comment in respect of their own organisations, while agencies were asked to comment in terms of a typical client. 1 E-consultancy uses Clicktools for its online surveys. 9
  11. 11. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Company turnover Figure 4 Figure 6 Company: What is your annual company turnover? All respondents: In which business sector is your organisation? Figure 4 shows the range in the size of participating organisations, as defined by Under £1 million: 11.08% (42) 20 A company turnover. Approximately a third of £1 -£10 million: 17.68% (67) respondents (29%) work for companies with Ch annual revenues of £10 million or less. £10-£50 million: 12.40% (47) £50-£150 million: 9.23% (35) Co 39% of those companies taking part have >£150 million: 29.55% (112) a turnover of more than £50 million, of Not relevant / don’t know: 20.05% (76) 15 En whom nearly a third of respondents work for companies with a turnover in excess of Fi £150 million. FM Agency respondents typically work for smaller G 10 organisations, with 45% of them representing agencies with a turnover below £1 million H [Figure 5]. 20 Automotive: 1.30% (5) Ph Charity: 5.71%(22) Figure 5 5 Consultancy / Marketing Services: 3.64% (14) Pr Business sector Agency: What is your annual company turnover? 15 Entertainment: 5.19% (20) Pu Financial services: 15.06% (58) The best represented sectors are financial Pu FMCG / CPG: 1.56% (6) services, retail, travel and publishing [Figure 6]. Under £1 million: 45.14% (181) 10 Gaming: 0.26% (1) £1 -£10 million: 29.93% (120) Re 0 Healthcare: 1.56% (6) £10-£50 million: 8.23% (33) Pharmaceuticals: 0.52% (2) Te £50-£150 million: 2.74% (11) 20 5 Automotive: 1.30% (5) Property: 0.52% (2) >£150 million: 4.74% (19) Charity: 5.71%(22) Public Sector: 5.71% (22) Tr Not relevant / don’t know: 9.23% (37) Publishing: 8.83% (34) Consultancy / Marketing Services: 3.64% (14) U 15 Entertainment: 5.19% (20) Retail: 12.99% (50) 0 Financial services: 15.06% (58) Telecoms / mobile phones: 4.16% (16) O FMCG / CPG: 1.56% (6) Travel: 9.35% (36) 10 Gaming: 0.26% (1) Utilities & Energy: 1.30% (5) O Healthcare: 1.56% (6) Other manufacturing: 3.38% (13) Pharmaceuticals: 0.52% (2) Other: 18.96% (73) 5 Property: 0.52% (2) Public Sector: 5.71% (22) Publishing: 8.83% (34) Retail: 12.99% (50) 0 Telecoms / mobile phones: 4.16% (16) Travel: 9.35% (36) 10 Utilities & Energy: 1.30% (5) Other manufacturing: 3.38% (13)
  13. 13. 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009 Findings Customer engagement strategy Figure 7 The overwhelming majority of client-side Company: How important is customer engagement to your organisation? (2008) respondents say that customer engagement Importance of customer engagement is important (35%) or essential (52%) to their Figure 7 shows that customer engagement continues to be of key importance, with Essential: 52.27% (242) organisations. slightly more respondents saying that it is Important: 34.77% (161) essential than last year. The overwhelming Nice-to-have: 11.45% (53) majority of client-side respondents say that Not important: 1.30% (6) From the agency perspective, approximately customer engagement is important (35%) or Don’t know / not relevant: 0.22% (1) essential (52%) to their organisations. 84% of agencies (compared to 82% last year) Only 1% of respondents feel that it is not feel that customer engagement is essential or important, reflecting the growing shift important. towards putting the customer at the heart of business strategy. From the agency perspective, approximately 84% of agencies (compared to 82% last year) Do you have a defined customer feel that customer engagement is essential engagement strategy? Figure 8 or important, emphasising the underlying message that customer engagement Agency: Typically, how important is online customer Whilst the importance of customer engagement for your clients? engagement is widely acknowledged, continues to be a critical component of organisational strategy. less than half of organisations (42%) have Essential: 43.27% (196) a defined customer engagement strategy in Important: 40.62% (184) place. It is clear that whilst brands understand Nice-to-have: 13.47% (61) that customer engagement is important, many companies are still unsure about how Not important: 2.21% (10) to implement a coherent and practical plan Don’t know / Not relevant: 0.44% (2) of attack. From the agency point of view, fewer than a third (just 26%) say that their clients have what they would call a defined customer engagement strategy in place, suggesting a difference of opinion between companies and agencies about what constitutes a defined strategy in this area. 12
  14. 14. COMMENT Andy Beal Customer engagement takes center stage Figure 9 in economic downturn Company: Does your organisation have a defined customer engagement strategy? Over the last 12 months, a lack of budget and time (45%) was cited as the biggest barrier to starting a customer engagement campaign. Ironically, as budgets have tightened further – ahead of tougher Yes: 42.30% (195) economic times – those same businesses are increasing their focus in No: 51.41% (237) this area, with 41% naming the worsening economy as the catalyst for Don’t know / not relevant: 6.29% (29) spending more resources on customer engagement. Less than half of organisations It is worth noting exactly which channels businesses have the most (42%) have a faith in to help them achieve their customer engagement goals. While defined customer 37% of respondents plan to invest in blogging, user-generated content, engagement and social networks, it’s email newsletters that will receive the greatest Andy is considered strategy. investment (59%) over the coming year. Not that other channels aren’t one of the world’s valuable at building customer engagement, it’s simply a case that leading experts in email marketing shows the highest ‘tangible improvement’ in customer online reputation engagement – with 69% of respondents able to measure a benefit management. He from the use of email. Perhaps this is more of a statement about the effectiveness of measuring customer engagement using social media, is the co-author Figure 10 than a statement about social media itself. of Radically Agency: Do your clients typically have a defined Transparent: online customer engagement strategy? Ensuring customers are satisfied with Monitoring their experience is the most important metric and Managing Yes: 26.00% (117) to follow over the coming months. Reputations Online No: 68.44% (308) and founder of Don’t know / not relevant: 5.56% (25) So what data points will businesses find most valuable in measuring the online media success of their customer engagement efforts? Not surprisingly, almost 47% of respondents favour ‘customer satisfaction’ as the most important monitoring service metric to measure – easily beating the 37% who keep a close eye on the Trackur.com actual transactions that take place on their web site. Why the focus on customer satisfaction and not customer sales? As customer purse strings andybeal.com are tightened all around the world, few companies will have the luxury of reporting increases in customer sales. Instead, ensuring customers are satisfied with their experience is the most important metric to follow over the coming months. Those companies that can keep their customers happy during these difficult times will be well placed to enjoy tremendous growth, once our economy starts to recover. 13
  15. 15. COMMENT Jim Sterne Online marketing working. Senior managers sleeping It’s a love hate relationship. We love the It’s reassuring to see that email is still king Interest in customer engagement Long-term customer value also emerged as technology, we love the results, but we hate the (60% anticipate an increase in email spend the benefit of customer engagement most Organisations focus on customer engagement fact that upper management still doesn’t get it. in the next 12 months). It’s also reassuring likely to be of interest to agencies’ clients. for a variety of reasons, but it is clear from to have one’s beliefs confirmed that mobile 87% of companies found customer Figure 11 that the essence of customer Slightly more agency respondents (32% is still very young (77% don’t do and / engagement essential or important and engagement is about creating relationships compared to 28% of company respondents) or are not planning on doing any mobile 11% thought it would be nice to have. The which result in value both for customers and mentioned gaining customer insight as a key marketing). It is nevertheless infuriating other four people must work for (fill in your for organisations. reason for their clients’ interest. that we are so late to the adoption game. least-liked brand here). But even with 98% How many more ROI stories, case studies Asked about their organisation’s interest Increasing market share was mentioned by agreeing that customer engagement is a good and actual results are required to push past Jim has written in online customer engagement, 38% of 30% of agencies, although this was lower thing, 57% have still not defined their online our lack of budgets to do the job decently? respondents said that it was about increasing down the list of priorities for responding eight books on engagement strategy. We know the house is 52% said budgets were the problem long-term customer value while 34% said that organisations (cited by 25% of company using the Internet burning, we just can’t be bothered to call the compared to 31% (the next highest it was about increasing value delivered to the respondents). fire brigade. The fault? Mid-level committees for marketing, category) who suggested technology was customer. and senior management. Similarly, the use of customer engagement to produces problematic. Respondents, who were able to check up to increase short-term conversions was cited by the eMetrics Not knowing how your It’s time to rally the troops and bring three options, were also likely to indicate that just over a quarter of agencies (26%) but only Marketing customers perceive you is the fight to the C-Suites. This time, it’s customer engagement is a way of deepening 16% of company respondents. Optimization not about faith and conviction but about and enriching their product or service offering almost as bad as not knowing demonstrable results and competitive Summit and is (29%) and a method for gaining customer how they acquire those edge. We now have the means to insight (28%). 38% of respondents Chairman of the perceptions. show how online marketing lifts brand said that it was about Web Analytics Only 2% of responding organisations said Association. awareness, brings more customers to the a major interest was insulating against a increasing long-term 55% of companies don’t know how many table, lowers costs and increases customer touch points they have, ‘need to start’ mapping satisfaction. troubled economy. This shows that very few customer value while emetrics.org customer experiences to obtain a single view companies are seeing improved customer 34% said that it was about engagement explicitly as a way of dealing of the customer or didn’t understand the with the economic downturn. This may partly increasing value delivered question. Customer engagement happens through customer touch points. Not knowing be because companies have not yet been to the customer. how your customers perceive you is almost as severely affected by the credit crunch, but bad as not knowing how they acquire those also because protection against recession is perceptions. The fault? Corporate silos and a possible benefit of customer engagement insulated departments acting independently. rather than a principal driver of their endeavours in this area. 14
  16. 16. COMMENT Pete Mortensen When the customer talks back Figure 11 Figure 12 Company: Which of the following* best describe your Agency: Which of the following* best describe your Years from now, I think we’ll look back and remember 2008 as the organisation’s interest in online customer engagement? clients’ interest in online customer engagement? year when big business realised that pretending to be interested in its customers wouldn’t cut it anymore. As so often happens with change, 40 35 Strengthening emotional investment in your brand: 24.78% (113) Strengthening emotional investmentone understood the point of connecting it seems that one minute no in their brand: 21.78% (98) directly to consumers, and the next, everyone was doing it. 35 Increasing value delivered to the customer: 33.77% (154) Increasing value delivered to the customer: 28% (126) 30 Just consider how laughable it would have been a year ago if Reducing acquisition costs: 21.05% (96) Reducing acquisition costs: 21.56% (97) I had proclaimed that the biggest breakthrough in online customer 30 25 Increasing short-term conversions: 16.45% (75) Increasing short-term conversions: 26.22% (118) company H&R Block engagement would be the tax preparation 25 launching a Twitter feed. Or how unlikely it would have looked to predict Deepening and enriching your product or service offering: 28.95% (132) Deepening and enriching their product or service offering: 22.22% (100) a high-tech that a source of a turnaround at Starbucks would come from Pete is the 20 20 Adjusting to the increased importance and power of the customer: 10.53% Adjusting to the increased importance and power of the customer: 10.67% (48) suggestion box. Could anyone have announced without smirking that (48) communications 15 Increasing long-term customer value: 38.16% (174) companies outside of the technology sector would not only create social Increasing long term customer value: 32.67% (147) lead for Jump networking strategies, but that they would become essential components 15 Gaining customer insight: 31.78% (143) Associates and is Gaining customer insight: 28.29% (129) to their competitive approach? 10 the co-author of 10 Insulating against a troubled economy: 1.75% (8) Insulating against a troubled economy: 6.00% (27) The driving force here is the eroding effectiveness of traditional Wired to Care: How 5 Increasing market share: 24.78% (113) advertising. In an always-on world, multi-million dollar spots on TV don’t Increasing market share: 29.56% (133) Companies Prosper 5 have anywhere near the power that a zero-budget viral video could. Improved employee satisfaction: 5.48% (25) Improved employee satisfaction: 3.78% (17) When They Create People have learned to tune out ads that are imposed upon them, and 0 0 Enhanced public profile: 18.89% (85)connect with them. What we are seeing in seek out corporate ideas that Widespread Empathy Enhanced public profile: 19.96% (91) the slow emergence of electronic connections between producers and from FT Press. 35 Strengthening emotional investment in your brand: 24.78% (113) Reduced customer service costs: 17.98% their brand: 21.78% (98) Strengthening emotional investment in (82) Reduced customer service costs: 18.00% (81) consumers is the dawning realization that the best way to build customer Increasing value delivered to the customer: 33.77% (154) Increasing value delivered to the customer: 28% (126) Improving business predictability: 7.78% (35) new products – is to really 30 Improving business predictability: 5.48% (25) loyalty – and discover ideas for great jumpassociates.com Reducing acquisition costs: 21.05% (96) Reducing acquisition costs: 21.56% (97) understand who customers are as people. Other: 2.85% (13)short-term conversions: 26.22% (118) Other: 1.78% (8) Increasing short-term conversions: 16.45% (75) 25 Increasing In other words, these electronic seedlings that have grown up into Deepening and enriching your product or service offering: 28.95% (132) Deepening and enriching their product or service offering: 22.22% (100) 20 mighty oaks in the last year are a starting point and a call to action. Adjusting to the increased importance and power of the customer: 10.53% (48) Adjusting to the increased importance and power of the customer: 10.67% (48) H&R Block has very rapidly become a beloved brand online because its Increasing long-term customer value: 38.16% (174) 15 Increasing long term customer value: 32.67% (147) tax specialists are now available to help anyone with their tax questions Gaining customer insight: 28.29% (129) Gaining customer insight: 31.78% (143) free of charge. Now, just imagine what the company could do if it really 10 Insulating against a troubled economy: 1.75% (8) Insulating against a troubled economy: 6.00% (27) knew what was going on in the lives of the people asking beyond what Increasing market share: 24.78% (113) 5 Increasing market share: 29.56% (133) they can fit into a 140-character tweet. Improved employee satisfaction: 5.48% (25) Improved employee satisfaction: 3.78% (17) Business today is reconnecting with people in ways big and small to 0 Enhanced public profile: 19.96% (91) Enhanced public profile: 18.89% (85) propel through the tough economic times we find ourselves in. They Reduced customer service costs: 17.98% (82) Reduced customer service costs: 18.00% (81) would do well to focus increasingly more on the big. Because in a few Improving business predictability: 5.48% (25) Improving business predictability: 7.78% (35) years, you might look up, and see that everyone else is doing it too. Other: 2.85% (13) Other: 1.78% (8) * Respondents could check up to three options 15
  17. 17. COMMENT Ian Jindal Sustaining profitability in a challenging retail climate Retail appears a simple business, in which Here we have the difference between Behaviour of an engaged customer It is clear that Web 2.0 has led to increased the extent of a customer’s ‘engagement’ old-school marketing (persuading the customer empowerment and amplified the Participants were asked to indicate up to three can be measured by their spend with you. customer to empty your warehouse) voice of customer more than ever before. But attributes of an engaged customer which The challenge – especially in the current and customer engagement (wrapping despite the growing importance of customer they considered most important to their climate – is conversion: converting browsers your activities around a conception of empowerment, only 13% cite participation organisations over the next year. to purchasers (without simply ‘buying their a profitable and sustained interaction). in innovation and design as one of the three customer with ever-deeper discounts’), and customer engagement should inform the The attribute seen as most important most important attributes. thereafter purchasers to retained, profitable design and operation of every facet of is recommends product, service or brand, customers. your activities – from planning through Co-creation (as first coined by C.K. Prahalad deemed to be a top-three descriptor by 58% ‘conversion’ to reactivation, or ‘continuing to describe collaboration by organisation Ian is a consultant, of company respondents and 54% of agency There is a fundamental trinity at the heart service’, as we should term it. and customer for the creation of mutual respondents [Figure 13 and Figure 14]. corporate advisor of ecommerce: product, price and service. value) provides a lucrative opportunity to and publisher, No sales are possible if you don’t have an The survey response illustrates the rich As Fred Reichheld argues in The Ultimate drive innovation and creativity, yet it is clear focusing upon appropriate product for a customer. Once the range of mechanisms and initiatives in Question2, the propensity of a customer that too many companies are still adopting a product is presented, the customer will balance this field, but it’s heartening to see a trend to make a recommendation provides top-down approach. Whilst more companies eCommerce price and service promise (for example, towards customer engagement as a way marketers with a valuable metric which are starting to employ crowdsourcing in retail and preferring a slightly more expensive ‘in-stock’ of integrating marketing approaches techniques as a means to drive innovation, can be correlated to business performance, publishing. item to a piece of out-of-stock ‘vapourware’, or to a customer and a convergence upon allowing organisations to view customer this approach has not yet hit the mainstream. the implied reliability of a multichannel retailer measures such as profit and ROI rather recommendation as a driver of growth and with a reputation and return-to-store). than ‘engagement’ as some end in itself. Only 10% of company respondents say that ianjindal.com profitability. The Net Promoter Score (NPS) is the propensity of an engaged customer to Customer engagement can provide a a good example of this. be less reactive to a troubled economy is a key Customer engagement: framework to focus activity upon sustained Other attributes of engaged customers attribute. It seems that not many companies wrapping your activities around profitability, and in a challenging retail are seeing customer engagement as a crucial climate one could ask for no better goal. regarded as very important are: a conception of a profitable attribute for shielding them against the and sustained interaction. • They are more likely to convert impact of the recession. more readily (44%) On the same theme, 17% of respondents So much for the first purchase. The second • They purchase regularly (36%) believe that less focus on price is a crucial purchase will be driven by the same • They are less likely to switch supplier (30%) attribute. Given that many organisations will criteria, but with the important overriding not want to compete through price-slashing, consideration of ‘performance’. Did the Companies are also recognising the an alternative strategy is to create sustainable product match its claims? Was your service importance of engaging in dialogue with their competitive advantage and long-term value level as promised? How did your team customers. Just over a quarter of respondents by differentiating through the customer deal with queries? Did follow-up marketing (26%) say that participating in online experience. match the tone and offer to the customer’s communities and support groups will be an experience, expectations and desires? important attribute over the next 12 months, The extent to which companies will actually while 23% acknowledge the importance of need to cut their pricing depends on a getting regular feedback. company’s positioning in the marketplace and the price elasticity of their product or service. 2 The Ultimate Question by Frederick F. Reichheld. www.theultimatequestion.com/ 16