Liminal - Customer Engagement in Transition

A RAZORFISH ANALYSIS
OF CUSTOMER ENGAGEMENT IN TRANSITION
Change. As marketers, we have always accepted it. Markets change; brands gain momentum
and then lose energy; and new mediums come along. Consider the advent of television in the
1950s and how it changed the rules of marketing for decades.
The change marketers face today is different than what has come before, in both its pace and its potential, which is why we’ve used the
term “liminal” as the title of this book. The word liminal isn’t just about change, but about being on the cusp of something new. In the
context of marketing, it reflects the fact that, for the first time, customers have an immediate voice and an ever-expanding array of
channels in which to use it. If marketers are to survive—and thrive—in this new world, they need to re-examine how to engage with
customers, across generations and levels of technological savvy.
Thus, we undertook the research in “Liminal” from the ground up, so we could understand how people engage with companies, what they
are looking to get out of those engagements, and what channels they prefer. It’s not enough anymore for marketers to have a top-down
mentality, simply making sure they have a presence on multiple channels, but to understand what makes some customers still use an 800
number, while others reach out to brands on Facebook.
Here’s the problem: the above assumes your customers want a relationship with you. They don’t. Yes, they will engage with you, yet only if
it is on their terms. The findings in “Liminal” demonstrate that, in the future, marketers will need to find ways to sustain those engagements
over time, regardless of channel, whether they are traditional, emerging or new.
You have long known it is necessary to take charge and build relationships with your customers. We hope you will find that “Liminal,”
because it focuses on what customers want out of engagement, combined with the an eye toward the ever-expanding array of channels,
will help you realize the opportunities that lie with this liminal world—for both you, and your customers.
Sincerely,
John Zell
VP, Global CRM Solutions, Razorfish

I INTRODUCTION 04
C
CONCLUSION:
The Beginning of Understanding
Consumers and Engagement 56
addendum
01
PRIVACY AND PERMISSION:
Four Key Considera�ons
All Marketers Should Think About 58
addendum
02
METHODOLOGY:
The Research Process
Behind Razorfish Links 64
T THANK YOU 70
Rf ABOUT RAZORFISH 72
chapter
01
DEFINING ENGAGEMENT:
What’s Important to Consumers
When They Reach Out to Your Brand 08
chapter
02
THE POWER OF CUSTOMER VALUE
PLUS INFLUENCE 20
chapter
03
LINKING ENGAGEMENT
AND INFLUENCE
To Build Be�er Engagement Strategies 26
chapter
04
VIRGIN AMERICA:
Crea�ng an I�nerary That Iden�fies
and Leverages Customer Influence 36
chapter
05
THE TRANSITIONALS:
An Encapsula�on of
How Engagement Is Changing 52

We chose the name “Liminal” for this report because it describes a state of being in flux—on
the threshold of something new.To us, the word liminal does a superb job of describing the
continuing evolution of how consumers choose to engage with a brand.
To say the least, the number of places where your customers can—or may want to—engage
with your brand has exploded, even in the last two to three years.What used to be a mere
handful of options, such as the telephone or postal mail, first began to expand with the dawn
of the Internet era to include corporate websites and email. However, the roster of ways
customers can engage with you seems to increase inexorably.Today, consumers can “Like” a
brand on Facebook, post a video about a product onYouTube, or broadcast a complaint
about your company to their followers onTwitter.While some customers continue to use older
channels, others are using channels such as these to publicize the relationship between customer
and brand beyond the private interactions that used to typify the brand/customer relationship.
INTRODUCTION

Liminal: The 2011 Razorfish Customer Engagement Report 7
So, if some customers are content to be in touch with you via email, while others champion your
brand through social media; if some customers use channels they find efficient, while others use
ones that they find relevant; how do you make sense not only of these divergent touchpoints,
but the disparate reasons why customers gravitate to them?We are no longer in a world where
the only car available is a black Ford ModelT.Today, consumers can choose from dozens of
brands, each of which produce a wide array of models, with differing features, colors and price
points.An active family might choose an SUV; a single, environmentally conscious consumer
might drive aVolkswagen Beetle.
And so it is with touchpoints. How do you pick the right combinations to satisfy your
customers’ immediate needs and make them loyal? Better yet, how do you turn these people
into ambassadors who will openly tout your product or service to friends, family, or maybe,
the entire Internet universe?
I

HERDING THE ENGAGEMENT CATS
At Razorfish, we needed answers to these questions, because they are not only on our minds, but on the minds of our clients as well.
While we all know that engagement channels will continue to proliferate, and the number of channels may be in a continually liminal state,
it was clearly time to build a foundation for understanding what channels consumers use and why, setting the stage for building
engagement strategies now and in the future. We needed to identify a process that could be used and re-used to help companies renew
their engagement strategies as touchpoints expand.
Thus, from the outset, we wanted to discover truths that were not about individual channels but about consumer needs. What do
consumers want when they engage with brands? To answer that question, we did something that has seldom, if ever, been done before:
we looked at engagement from the customer viewpoint, rather than that of the marketer—something that is crucial to know whether you
sell airline seats, juice, or financial services, or if you are wrestling with whether your company should be on Facebook or, five years from
now, on a platform no one has yet imagined.
First, we commissioned a study to find out how consumers prioritize engagement, and what channels they use to satisfy their needs in
partnership with our client Virgin America, and Loyalty Lab, which employs software-as-a-service technology to drive customer value and
loyalty. The study, which did not ask respondents about specific brands or engagement scenarios, combined more than 5,600 surveys and 15
one-to-one interviews of Virgin America customers with their existing data on lifetime value (LTV) and engagement. Then we added an overlay
of publicly available data on social media use from 100,000 Internet users. These sources allowed us to look at self-reported attitudes and
preferences—and independently tracked behavior—enabling us to build a comprehensive understanding of how people engage with brands.
We call this process of taking behavioral data on engagement touchpoints, overlaying it with broader social and survey data, and then
analyzing the outcome, Razorfish Links. It’s a proprietary engagement audit that can help any brand get a better handle on its engagement
strategy—helping it accurately value its customers, and map each segment’s unique engagement preferences to the channels they use.
Ultimately, going through the Razorfish Links process allows brands to develop a truly customer-centric relationship marketing program.
We will go into detail about the results of the Razorfish Links process further on in this report. For now, here are a few things that surprised us:
• Though social platforms such as Facebook, Twitter and geo-location social services, like Foursquare, are being quickly
adopted, customers don’t yet view them as an important way to engage with brands.
• When we asked consumers to prioritize what was important to them when engaging with a brand, they ranked the
following priorities in exactly this order, no matter how we looked at the data: feeling Valued, Trust, Efficiency,
Consistency, Relevance and Control. We called these six qualities the Engagement Elements. In other words, in a world
full of engagement touchpoints, the most important things to everyone are to feel Valued by the companies they do
business with, to get their needs addressed quickly, and to feel the companies they engage with can be trusted.
• Even as “the consumer is in control” has become a mantra in the digital age, Control came in dead last. Apparently, the
consumer does not need to be in as much control as we thought, seeing other things as far more important.
• Even though we associate certain touchpoints with certain strengths—we assume, for instance, that an e-commerce
website is efficient—every channel has some ability to deliver on the Engagement Elements. It’s not as though, for
instance,phoneandemailalwaysdeliveronmakingacustomerfeelValued,whileFacebookandTwitterareincapableofit.
• The channels people use to meet their engagement needs varied. In fact, the engagement data of the group aged
35-44—which we call The Transitionals (see Chapter Five)—closely matched those of the 45-plus demographic, yet
the channels they use to connect with companies are similar to the 25-34-year-old group.

These surprising findings taught us to assume nothing when it comes to why and how customers interact with brands. As this part of
marketing is bound to remain continually liminal, realizing that customer engagement is in a state of constant change is a humbling thing
to learn—and remember.
AND FINALLY, A PROCESS FOR NAVIGATING,
AND LEVERAGING, THE ENGAGEMENT SHIFT
Studies are interesting, but even the best sound bites of data are not very useful unless they give us the information we need to act.
Therefore, we set out to determine how a marketer could use the data from Razorfish Links to re-orient their engagement strategies
around how their customers prioritize engagement and the channels they might use when they reach out to brands. Thus, also in “Liminal,”
you will find ways to:
• Map the channels customers use to their engagement priorities. With Virgin America, data from Razorfish Links
allowed us to develop four different Engagement Types within the company’s customer base, based on lifetime value
(LTV), potential influence, what they want out of engagement channels, and what channels they use.
• Optimize channels. Some of which may already be in use. For instance, if a company’s high-value customers are heavy
users of Facebook, yet the company has not invested much in the channel, it will learn that it should take the channel
more seriously, and what needs it should meet with that channel.
• Calculate a Consumer Influence Score. This combines a traditional, bottom-line view of a customer’s LTV with his or
her ability, using social media tools, to influence others, a concept we call enhanced LTV (eLTV).
• Develop an engagement strategy. One that focuses on the right engagement touchpoints, delivering on what
customers need—with an eye to what Engagement Types and channels will have the best return on investment.
Where the practice of customer relationship marketing (CRM) creates the framework, we see the goal as creating a Sustained Engagement,
which aligns channels and customer engagement priorities in such a way that consumers want to maintain a relationship with a company,
potentially across multiple channels, brands and products on an ongoing basis.
With a Sustained Engagement, you can increase sales, decrease churn, and, most importantly,
transform consumers into brand advocates through exceptional engagement experiences.

Engagement—just the mention of it can spark a visceral response from marketers, partly
because no one has pinpointed what it really means. Let’s get it out there: engagement is a
messy, complicated idea—yet a critical one—because it gets to the heart of the relationship
between consumers and brands.We know that it is valuable, but the how, what and why of it is
ambiguous at best.
However, particularly at a time when potential touchpoints with consumers are proliferating, it
is one of the most important things for a marketer to define.Why? Because consumers pick the
channels they use based on how well each satisfies their needs when they engage with a brand.
If a customer who bought a computer is seeking out relevant troubleshooting information, he or
she has many ways to get it.Whether that person chooses to look for it on a company website,
reaches out to that company onTwitter, or goes to an independent community site about that
brand depends on which of the three is best able to serve up the most relevant information.
DEFINING ENGAGEMENT:
What’s Important to Consumers When They Reach Out to Your Brand

chapter
01
THE MARKETER DEFINITION OF ENGAGEMENT:
LOOKING AT IT BACKWARDS?
While there is no single, clean, concise definition of engagement—though everyone from Forrester Research to Fanscape and eMarketer
has attempted it—we would argue the myriad definitions do have one unfortunate thing in common: they define engagement from the
marketers’ perspective, instead of asking consumers what they consider a positive engagement experience. Top-down definitions of
engagement focus on a very specific set of numerical measures, typically within a single channel—things like time spent, site visits, page
views, search keywords, and session length. Yet those do nothing to elicit how consumers feel about it, particularly in how their thinking
affects their channel choices. And certainly, none of the marketer-side definitions connect engagement back to lifetime value (LTV), but
instead to lighter measures such as awareness and brand lift.
Our study turned engagement on its head. The most important principles of engagement lie with the perceptions of people—consumers—
and what engagement means to them. Thus, our study started by asking people what makes an engagement good or bad—in short, what
makes engagement, well, engaging.
We know that engagement always begins with a need to connect (a thank you, a complaint, a question, a purchase). What happens then?
What are people’s expectations of an engagement with a brand, and how can a brand deliver on those expectations?
THE CONSUMER VIEWPOINT:
THE SIX Engagement Elements THAT MATTER
From a series of in-depth interviews, we learned that engagement is more than just a channel. It’s a dialogue; it’s the ability to choose
how and when to engage; it’s the value each channel represents; it’s whether or not expectations were met.
However, while marketers’ definitions of engagement are about how consumers interact with them in particular channels, consumers
see it differently. Our interview subjects, instead of going straight into listing the channels they use to engage with a brand, focused on their
relationship with a brand and how channels deliver on their interests, needs and expectations in different ways. We learned right away
that the channel is subservient to the relationship need.

Engagement isn’t just about a channel. It is about the consumer’s relationship with a brand,
his or her ability to choose how and when to engage, and the value each channel represents.
This enabled us to determine the six most important needs consumers have when they reach out to a brand: feeling Valued,
Trust, Efficiency, Consistency, Relevance and Control.
We call them the Engagement Elements, and they, not individual channels, should be the starting point for any interaction a brand has
with a consumer. Again, it is a bottom-up, customer-centric way of looking at consumers’ engagement needs and how to optimize them.
Ef
2
E F F I C I E N C Y
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1
V A L U E D
Rv
5
R E L E V A N C E
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6
C O N T R O L
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THE SIX ENGAGEMENT ELEMENTS

Valued
What a customer feels when he knows he can expect a company to
go out of its way to support his needs, and knows that the company
values his business. One interviewee explained: “[It’s] something as
simple as calling a person, having them listen and talking to them.
Just feeling as though they are out there, working on your behalf,
that your situation has not been discarded, you are not just another
passenger.It’sthepersonaltouchthatmakesthedifference.”
Efficiency
When a company respects a customer’s time and energy,
and promptly addresses his or her needs. When airlines offer
consumers kiosks, which allow them to get their boarding pass with
limited interaction with the airline, that is an example of Efficiency
—many of us like to avoid the long lines and laborious process of
checking in with a company representative. One interviewee praised
online transactions through a computer or mobile phone, finding
them easier, faster and more financially trustworthy. However, not
everyone feels the same way; another subject complained that being
contacted extensively had the opposite effect, saying, “Initial contact is
OKbutafterthatIdon’tliketobehassledtoomuch.”
Trust
When customers feel confident that a company is credible, and will
handle engagements honestly, sincerely and transparently. One
interviewee mentioned, “I need to believe that they’ll stand by what
theyaregivingme.Ifsomethinggoeswrong,theywillcorrect[it].I’lltake
chances with [trusting a company] so long as I’m sure they are there for
metocorrectanyproblems.”
Believing in and taking chances with a
company is contingent upon trust. DMNews hit
the nail on the head when it stated, “Marketers
must show their customers respect while earning
their trust. This means understanding what truly
interests them and not simply inundating them
with material that you know is just advertising
in disguise.”
1
1 Martin Reidy, “Loyalty Online Creates Instant Connections,” Direct Marketing News, June 21, 2010.
CONSISTENCY
Achieved when customers feel a company is uniform in things such
as policy, attitude, communication, and messaging. Interviewees
reported they noticed when a company’s words and actions clashed.
Participants also defined Consistency in terms of reliability, durability,
experienceandcraftsmanship.
Relevance
Achieved when a customer feels messaging from a company is
interesting and applicable to their needs. When a retailer offers
personalized coupons to its customers with discounts on items they
frequently buy, that is Relevance (and probably, makes them feel
Valued). One participant mentioned, “A lot of companies are want-
ing to reach you through the Internet. Everybody has a Facebook
page. Blah, blah, blah. I’m not going to a company’s page unless you
give me a reason to go there. And I don’t want to hear about new
productsthere.IwanttogothereifIwanttobecomepartofthe[brand’s]
cultureorthereissomeimportantinformationthere.”
CONTROL
Manifested when the customer can determine if, when and how a
company will communicate with him or her. Interviewees noted they
want to give companies permission to be in touch with them up front;
conversely, they want to opt out when they are done engaging. Control
canbeimplicitorexplicit,yettheconsumerwantstobeatthecenterofit.
Heorshewouldratherfosterarelationshipthanreceiveaone-waypush
from the marketer. As was said earlier, however, it is noteworthy that in
“theconsumerisincontrol”era,Controlwastheleastimportantofthesix
Engagement Elements we identified. One reason for this, we believe,
is that if a company delivers on Trust, then Control becomes less
important.

THE SIX Engagement Elements:
DRILLING FURTHER DOWN
Yes, feeling Valued, Efficiency, Trust, Consistency, Relevance and Control are the six consumer-centric needs that form the backbone of
engagement. Yet the data from our 5,600-participant survey showed that there is more to know. Below are two further points about the
Engagement Elements that stood out to us:
1. Feeling Valued, Efficiency and Trust, in that order, were overwhelmingly the three most important Engagement
Elements. Consistency, Relevance, and Control were important, but much less so.
2. No matter how we sliced the data—whether by gender, age, or favored channels—the rank order of the
Engagement Elements remained the same, even if different age groups gave them different statistical weighting.
Therefore, the consistent ranking of the importance of Engagement Elements is a barometer that allows us to
understand why different channels are more successful than others.
Still, it is a complex thing to understand. It turns out each channel delivers, to a different degree, on these elements, at different times, for
different reasons. Just as a fast food chain might serve up information on its website that it was offering a special meal deal the next day, it
could also offer that information via Twitter to loyal customers who follow the brand. For some customers, the former touchpoint works,
for others, the latter. The fact that every channel has some ability to deliver on the Engagement Elements makes the relationship between
them turbulent.
So, how do the Engagement Elements relate to channels? To answer this, we first explored the importance of each heavily-used
Virgin America channel. We walked away with two provocative findings.
1. Channel importance and frequency of use are not related to the overall adoption of innovative new channels.
With all the attention paid to such things as social media and mobile applications, consumers do not use these new channels often when
they need to engage with brands. Our survey showed the most important consumer engagement channels are transactional email,
company websites, traditional word-of-mouth and face-to-face conversation with a company representative. Obviously, consumers most
use the channels they find most important. Those most important channels are Google (to find a company website), company websites,
word-of-mouth and email. Further, channel importance and frequency of use matched up almost one-to-one, with the exception of the
use of Google to find a company.
Social networking services were the least important, be it LinkedIn, Twitter, Facebook or the even newer location-based social networking
services. Moreover, the least frequent actions taken on individual channels were participating in a company community site, looking up a
company on YouTube, posting a review, reading or participating in a company community site and sending an email to a company. Twitter
and Facebook didn’t even make it into the top nine in terms of importance or frequency of use. Gasp.

3
2
4
5
6
25-34
35-44
45+
MEAN CHANNEL IMPORTANCE
WHEN ENGAGING WITH BRANDS
TWITTER
LOCATION-BASED
SOCIALNETWORKING
LINKEDIN
FACEBOOK
REVIEWWEBSITE
MOBILEAPPLICATIONS
COMPANYCOMMUNITY
WEBSITE
CUSTOMERSERVICE
INSTANTMESSAGE
POSTALMAIL
PRINTAD
PHONE
EMAILNEWSLETTER
COMPANYWEBSITE
FACE-TO-FACE
INTERACTION
WORDOFMOUTH
INDIVIDUALEMAIL

ENGAGEMENT ELEMENT
EXPECTATIONS BY CHANNEL meets expectations expectations not met
EFFICIENCY
CONSISTENCY
TRUST
VALUED
RELEVANCE
CONTROL
PHONE
LOCATION-BASED
SOCIALNETWORKING
EMAILNEWSLETTER
TWITTER
COMPANYWEBSITE
WORDOFMOUTH
INDIVIDUALEMAIL
FACE-TO-FACE
INTERACTION
COMPANY
COMMUNITYWEBSITE
POSTALMAIL
PRINTAD
MOBILEAPPLICATIONS
CUSTOMERSERVICE
INSTANTMESSAGE
REVIEWWEBSITE
LINKEDIN
FACEBOOK

So, while a lot of people are using social media channels, their use is not lining up with which channels they perceive to be important or use
frequently when they want to engage with brands. What’s going on here?
2. Under used channels aren’t necessarily bad at delivering on Engagement Elements; it’s often that companies are not using
them correctly, if at all.
We believe consumers do not use some of the hot, new channels to interact with brands because brands are neither fully nor consistently
using them to deliver on the Engagement Elements, particularly in social media. Obviously, if a brand has many customers who are active on
Facebook, yet its own Facebook page is moribund, it’s not going to deliver well on the Engagement Elements in that channel. In fact, there is
wild variation in how each channel fulfills consumers’ expectations.
The chart at the left gives a detailed look at how different channels perform against the six Engagement Elements, with dark green being the
best and dark red being the worst.
Here are a few snapshots:
• Postal mail, print ads, mobile applications and real-time chat with customer service representatives are the
lowest performers.
• Company websites, individual email, face-to-face interaction and traditional word-of-mouth are the highest performers.
• Twitter, email newsletters, company community sites, Facebook, and review sites are liminal. They are neither wholly
good, nor wholly bad, at delivering on the Engagement Elements and are evolving every day in terms of delivering new
features, and also in how companies and consumers use them.
Face-to-face interaction excels at delivering Trust and making consumers feel Valued; company websites are best at Efficiency and
Consistency; transactional emails are best at delivering Relevance and giving Control to the consumer. In fact, face-to-face interaction,
transactional email, and company sites perform well on most all Engagement Elements. Postal mail and print ads score poorly in all six
Engagement Elements, even though, as we said earlier, all channels have the potential to deliver them, depending on a variety of factors.
What about some of the newer channel options—the ones in that middle space? These middle performers are wildcards. They may knock
one or two of the Engagement Elements out of the park, but they strike out on the others. Twitter, for instance, scores quite well in Control
and Relevance, but is a laggard in making consumers feel Valued.
Why do some channels score so well—or so poorly—across most of the Engagement Elements, while others offer a hodgepodge of scores?
We think it has to do with the ubiquity and longevity of individual channels and the familiarity consumers and marketers have with them.
To look at the full history of marketing channels, turn the page. It shows not only how long
modern marketing has been around, but also how heavily-weighted channel innovation is
toward the last few decades.

TWEAKING THE Website, WHILE PAYING MOBILE NO MIND
What we found is that the ubiquity, longevity and familiarity of a channel all play a huge role in whether consumers believe it delivers on
the Engagement Elements. The high and low ends of the engagement spectrum are filled with the most tried-and-true channels. Company
websites, transactional email and face-to-face interaction are high performers because they have been around for a long time, are proven,
and have been refined over time. Also, people with limited technology skills have been able to keep up with changes in email and websites,
allowing those channels to stay within their reach.
Print ads and postal mail also stand out, but in a negative way. While these channels have survived over time, they have not kept up with
the changing nature of engagement. The high and low ends also have another similarity: people’s ratings of them across the Engagement
Elements barely varied. No matter what they thought of an individual channel, they generally agreed on whether it was good or bad.
But when you stop to think of it, marketers have similar, fixed attitudes with tried-and-true channels because of the same ubiquity,
longevity and familiarity. Websites are constantly being tweaked and optimized, whereas email is often categorized as a cheap direct
response vehicle—and is treated as such. Yet, customers may still derive a lot of value from email—value that is not optimized by some
marketers because they pigeonhole that channel.
When you consider the consistency with which people rate older channels, it is not surprising to find their feelings about newer channels
are all over the place. We believe it is because both the channels themselves, and the way marketers use them, are in a liminal state.
In fact, many marketers suffer from a form of bias when it comes to delivering on newer channels; they tend to inconsistently deliver on
them despite the heavy usage of new platforms by many consumers. Much of the time, it is because marketers are misinterpreting the fact
that their consumers do not reach out to them on new platforms. It may have nothing to do with these channels in and of themselves, but
marketers’ inability to use them well.
Nowhere is this more apparent than mobile applications; astonishingly, they ranked in the bottom four of the 16 channels we studied.
Yet, the more we thought about it, the more it made sense. For one, mobile does not have the ubiquity, longevity and familiarity that older
channels do—the iPhone app store has only been around since 2008. Not surprisingly, the channel’s newness has led many marketers to
treat it as the redheaded stepchild of engagement, and consequently it scored poorly in delivering on the Engagement Elements,
particularly in making consumers feel Valued, and in Efficiency and Trust. Yet, it’s easy to see that mobile—including tablets—has great
potential as devices, apps and mobile experiences become more ubiquitous and marketers get better at using them to deliver strong brand
interactions. However, for most companies, right now mobile is where company websites were in the mid-90s: a place to shovel static
brochure-ware that does not deliver a satisfying experience.
Facebook is another channel inconsistently meeting consumer needs—or, more likely, the marketers who use it are inconsistent. It delivers
on Control and Relevance, yet it struggles with making consumers feel Valued, reflecting the oft-voiced problem that marketers know they
need to be on Facebook, yet are unsure of how to leverage it. Still, some brands are constantly improving the channel. Best Buy has made
its Facebook page a model of Efficiency by adding a shopping tab; the luxury shopping club Gilt Groupe gives its Facebook fans advance
notice on sales, making them feel Valued; and Starbucks provides its Facebook fans Control by allowing them to manage their reward
points within the platform. In all three examples, the consumer experience has improved because the marketers’ Facebook pages do a
better job of delivering on one or more of the Engagement Elements.
A successful engagement audit should get around this problem by signaling what consumers want and what channels they are apt to use to
get what they want from your brand.

CONSTRUCTING THE ENGAGEMENT ECOSYSTEM:
LEAVING THE LIMBO FOR SOLID GROUND
The journey of reframing the concept of engagement has been powerful, as we have discovered that top-down marketing notions of
engagement don’t tell us what matters to consumers. Further, the six Engagement Elements play out in different ways across different
channels due to factors such as how ubiquitous a channel is and how familiar consumers are with it—and whether or not a channel can
consistently deliver on consumers’ engagement needs.
Of course, unleashing the Engagement Elements genie—and the proliferating channels consumers can use to engage with a brand—
underscores that there are almost infinite engagement scenarios. The challenge for marketers is to take these ingredients and build their
own proprietary recipe—a unique blend that allows them to figure out what channels, based on their individual strengths and consumers’
use of them, best deliver on the Engagement Elements.
That said, what’s the goal? What are you, as a marketer, looking to do by mixing these ingredients? We will go into more detail about
Sustained Engagement in Chapter Three, but it’s about more than just driving revenue—we believe it’s to drive LTV. But, not just that, either.
At a time when some newer channels—such as social media platforms—make brand engagements public, it’s to build enhanced LTV—or
what we call eLTV. eLTV is built not just on the strict monetary value of one customer to a brand, but also on each customer’s unique power
to influence others to be interested in it.
All men and women may be created equal, but all customers are not. The trick is to identify those customers who can deliver eLTV—lifetime
value that takes into account each customer’s ability to influence.

It’s time to rethink the definition of lifetime value (LTV) to include an additional component:
influence. Just as it has become ever more difficult for the disparate parts of a marketing
organization to exist in silos, it is impossible to look at a consumer’s LTV without taking into
account each consumer’s power to influence other current and potential customers.
For Kai, a maker of perfume, scented candles and body lotions, it may be wonderful if an
individual customer spends thousands of dollars on its products over her lifetime. But the Kai
customer with the highest eLTV is probably OprahWinfrey, who named its Body Butter and
Body Buffer among her “FavoriteThings” in 2007.True, this is an outsized example, but the
effect is clear: Oprah may spend no more on Kai products over her lifetime than the anonymous
Kai customer we just mentioned, but she is more valuable to the brand than any other
customers because of her enormous influence. In their own ways, people with huge influence
through social channels are their own Oprahs, because they have the power to recommend
brands to a large cadre of followers who trust what they have to say.
THE POWER of Customer Value
Plus Influence

We should point out that the power to influence—via traditional word-of-mouth—has been
with us for as long as there’s been retail.The reason it is time for this concept to become an
integral part of any LTV calculation is twofold:
• For the first time ever, it is possible to measure influence more accurately. Digital platforms
allow us to identify who the influencers are and how much influence they wield.
• Digital channels also allow influencers to broadcast their brand advocacy. Influential people
used to recommend products to friends and family on a one-to-one or one-to-a-handful basis.
Now, an influential person can broadcast what they think about a brand to dozens, hundreds,
thousands, and even millions of users, using anything from a simple email list toTwitter.
chapter
02

THE IMPORTANCE OF INFLUENCE
It is difficult to understate the importance of influence. For all of the billions spent each year on marketing in the U.S. alone, it’s still
person-to-person recommendations that carry the most weight when someone is deciding whether to purchase a brand. There are dozens
of statistics we could use to illustrate this. Here are just two:
1. When asked what sources “influence your decision to use or not use a particular company, brand or product,”
71 percent say reviews from family members or friends exert a “great deal” or “fair amount” of influence. 2
2. Ninety percent of consumers online trust recommendations from people they know; 70 percent trust opinions of
unknown users.3
There are actually two components to influence. One is direct influence—when a customer directly influences friends, family, or even
people he or she does not know, becoming a brand ambassador. The other is indirect influence—the incremental reach of friends and
family—in other words, how influential those influencers are. Both kinds of influence need to be included in the value equation.
THE CONSUMER INFLUENCE SCORE:
INTRODUCING A NEW EQUATION TO MEASURE CUSTOMER VALUE
We know influence is important, but how do we quantify it? As we said above, one of the most powerful things about some of the newer
channels is that they make influence measurable. Thus, Razorfish developed a way to calculate the propensity to influence. It’s a calculation
we call the Consumer Influence Score, a measurement of human and brand connections based on the number of times a customer con-
nects via social media and how many people he or she is connected to across social platforms. The formula is presented below:
Consumer Influence Score : A measurement of human and brand connections based on
the number of times a customer connects via social media and how many people he or she
is connected to across social platforms.
2 Whitney Heckathorne, Marketing Manager, Harris Interactive, The Harris Poll #74, June 3, 2010.
3 Jake Hird, Senior Research Analyst, Econsultancy, “Online Consumers Trust Real People, Not Companies,” July 8, 2009.
#of social
networks the
individual
belongs to
#of Twi�er
followers #of Twi�er
updates
#of unduplicated
friends across
all social
networks
consumer
influence
score

During a time of ongoing technological change, it should be acknowledged that no attempt to measure consumer influence will be perfect.
Indeed, the equation focuses heavily on Twitter because, at this point, Twitter is the most public and trackable of major social platforms.
That could change. We also acknowledge that, at times, this equation may over-reward, for instance, the particularly chatty teenager.
Although, in the case of Twitter, its core user base is older, according to numerous studies.
Yet, however liminal social channels are, it is time to start quantifying the role they play in influence, and this equation will help.
Additionally, each individual’s scores will evolve over time. There will be continual evolution of measurement techniques, tracking of social
behavior, and company engagement strategies. In addition, over time, companies will learn more about the behavior of influencers and
how much that influence translates into incremental sales.
We believe by combining traditional LTV scores—which measure things such as an individual’s average purchase, acquisition cost and
retention cost—with their direct influence, indirect influence and long-term effect, marketers can determine which customers have high eLTV.
INDIRECT
INFLUENCE
DIRECT
INFLUENCE
LONG
TERM
EFFECT
10%
DISCOUNT
RATE
80%
CUSTOMER
RETENTION
RATE
1
AVERAGE
PURCHASES PER
YEAR PER
CUSTOMER
$25
CUSTOMER
ACQUISITION
COST
50%
AVERAGE
PROFIT
MARGIN
AVERAGE
PURCHASE
AMOUNT
$100
TRADITIONAL INPUTS FUTURE INPUTS
NEW CUSTOMER
valuation

A STRONG ENGAGEMENT DRIVES INFLUENCER VALUE
What role does engagement play in consumer influence? Engagement drives the value of influencers. Better engagement with customers—
and providing them with easy ways to spread the word—unlocks their power.
As a marketer, you can build a campaign, you can advertise to the masses and you can create highly targeted messages. Yet, without giving
consumers an experience truly worth sharing, and the means with which to share it, the influencers will not connect with your brand, and
they will not recommend it. The analytics showing who has a strong social graph and the willingness to leverage existing social communities
or create new ones will not matter if you ignore the basics. These influencers are people, after all, and we cannot make them ambassadors
of your brand if it is not worth it to them.
This brings us back to the Engagement Elements. Let’s face it: not every customer wants a relationship with you, but he or she will engage if
there is a compelling reason. Therefore, if you are doing well on meeting the Engagement Elements you are going to provide more value—
and that is something a customer will tell others about. While your mind might jump to viral marketing efforts like OfficeMax’s “Elf Yourself”
and the YouTube-based “Old Spice Man” campaign, that’s not at the heart of what we’re talking about. Those are lightning strikes—lottery
winners—that are also short term.
We are talking about the long term, built through satisfying and sustainable everyday engagement that meets consumers’ needs and fulfills
their expectations. For example, imagine being a woman who has opted in through her mobile device to get promotional offers when she
walks into her favorite retailer. If your data indicates that this person has both high LTV and high eLTV, you might have a manager greet her
and invite her to the back room to get a sneak peak at a new line of clothing. That’s a great experience for her, and the kind of unusual expe-
rience she is likely to share with her friends.
It is experiences like that which will build true incremental value that goes straight to the bottom line.
The Importance of Influence
in Building an Engagement Strategy
In Chapter One, we discussed the importance of looking at engagement across touchpoints from a consumer-centric perspective, and what,
when it comes to interacting with brands, consumers clearly want, ranging from feeling Valued to Control. In this chapter, we examined
the power of influence, a concept which has become so important in the digital age that we believe marketers should look at a new metric,
eLTV, which is traditional LTV plus the powerful enhancement of influence. The next step is to combine touchpoints and influence into a
coherent, ongoing engagement strategy, the topic of Chapter Three.

Influence Can Be Good and Bad
Years ago, brands simply pushed out messages using the limited media available. Today, it’s not just that media channels have
proliferated and that new technologies have enabled customers to interact with brands on the go, on their terms. Many of those
same technologies let consumers share their opinions about your brand—and sometimes brand messages they create—not just
with their friends but also with millions of users online.
For the purposes of this discussion, we have mostly focused on the ability of these technologies to spread positive influence; we
make the assumption that customers truly like your brand. But let’s face it—when a customer feels a certain service is not up to
scratch or doesn’t make them feel appreciated, they can use these technologies to negatively influence perception. One of the
best examples of the last few years is “United [Airlines] Breaks Guitars,” a music video featuring an original song by the aggrieved
guitar owner, which became a viral sensation. The first video posted currently has more than nine million views; all told, the
number is much higher than that. The “United Breaks Guitars” saga also resulted in dozens of news stories.
In that case—at least according to the song—United failed on the Engagement Elements on at least two touchpoints, face-to-face
interaction and the phone, as the company turned a deaf ear to the guitar owner’s assertion that he saw his guitar being
mishandled on the tarmac. Whatever the particulars, the case makes clear there is an urgent need for businesses to treat their
customers well.
So, as you ponder which engagement touchpoints you should be using to fulfill the Engagement Elements, and as you calculate
which of your customers has a high Consumer Influence Score, keep in mind that customers can put touchpoints to work for you
or against you, based, in large part, on how well you deliver on the Engagement Elements.
tip

LINKING ENGAGEMENT And Influence
To Build Better Engagement Strategies
Plain and simple, every business needs to rethink how it engages with consumers. In a world
full of demanding customers, who use multiple channels to engage with businesses—and who
can use some of those same channels to influence other potential customers—it’s clearly time to
build new, cross-departmental engagement strategies that can be implemented across multiple
touchpoints.
As we’ve talked with CMOs and other heads of marketing, we’ve discovered that they want
to be less product-centric and more customer-centric.They want to create multi-channel
customer-relationship-building environments.And, they know consumers expect those
environments to deliver on what they promise.We also know today’s CMO is more focused than
ever on driving top-line sales and bottom-line results. Now that social media is maturing into a
critical engagement channel, executives also want to understand its value and return on
investment. In fact, it is becoming increasingly important to prioritize a multitude of
engagement touchpoints and get a grip on where to allocate resources.
We believe the approach we define in this book gives marketing executives the steps they need
to start identifying, prioritizing, testing and optimizing CRM engagement touchpoints in this
new world.

chapter
03
SUSTAINED ENGAGEMENT:
BUILDING CUSTOMER RELATIONSHIPS THAT LAST
As you’ll see further on in this chapter, there’s a lot of nitty-gritty involved in building an engagement strategy, from determining which
touchpoints to focus on, to discovering what your customers value when they connect with your company. But before we get to that, let’s
take a moment to look at the larger vision: it’s to build Sustained Engagement with your customers. Here’s how we define it:
A Sustained Engagement is achieved when a level of feelingValued, Efficiency andTrust is
established between a consumer and a business.Those three Engagement Elements, coupled
with Consistency, Relevance and Control, will result in the consumer’s willingness to maintain
a relationship with the business across multiple channels, brands and products.
No, this isn’t simply CRM. A vision as ambitious as this is referred to by the Harvard Business Review as a BHAG: A Big Hairy Audacious Goal.
And it is. Yet with the emergence of a variety of new touchpoints, from mobile to Twitter, which allow consumers to express opinions,
indicate preferences and derive satisfaction from a brand’s products, there’s an opportunity to deepen the dialogue and lengthen the period
of time in which brands and consumers can interact.
We should note that Sustained Engagement does not mean bombarding customers with endless messages. We know customers move from
periods of high engagement to little or none and then, we hope, back to being engaged. Consumers are not always in the market for a car,
or a computer, or a new bank. We still believe in right message, right time and right place. The challenge to achieving a Sustained
Engagement is to marry the consumer and business views of engagement to the benefit of both:
• The bottom-up consumer view emphasizes knowing how a consumer wants to engage, what he expects during this
engagement and where he is in the customer journey.
• The top-down company view creates a seamless, multichannel engagement strategy that has sustainable impact on
top-line results—without adversely affecting the bottom line.

Creating a Virtuous Circle:
Building an Ongoing Engagement Strategy
Social channels give us an opportunity to listen, monitor and communicate in new ways, which gives businesses a better chance of
understanding what stage a customer is in during his or her purchasing lifecycle. Meanwhile, we can keep using traditional monitoring
methods such as quantitative surveys and behavioral tracking to assess how best to optimize engagement touchpoints. Yet how do we put
all those parts together?
We suggest four steps that will take businesses all the way from determining their objectives in building an engagement strategy, to
researching their customers’ engagement priorities and behaviors, to—finally—building out the strategy. It’s important to note that this
process—just like the engagements that will develop with consumers—is ongoing. Engagement strategies will change as businesses obtain
richer data on their customers, as business objectives change, as customers change, and as channels evolve. To that extent, building a Sus-
tained Engagement is more of a virtuous circle, in which ever-improving data and strategies impact business objectives, and so on.
The four steps, explained briefly here and in more detail below, are:
• Align: A starting point where marketers survey their current engagement strategy, based on their business objectives
and key engagement scenarios, and how they might build upon it.
• Audit: A three-pronged engagement audit linking disparate behavioral and attitudinal data. In this step, companies also
determine the Consumer Influence Score of their customers.
• Assess: An in-depth analysis of what the data says about the touchpoints customers prefer when they engage with
a company and what their engagement priorities are. This should yield groups within your target market—or
Engagement Types—that will help define an engagement strategy.
• Actions: The development of a strategy that engages customers and draws on their ability to influence, so that a
valuable customer today becomes more valuable down the road. Using information derived from dividing your
customers into Engagement Types, this step makes it possible to execute strategy based on its expected return.

1. Align: How Your Engagement Strategies Match Objectives, Now, and in the Future
Any rethinking of strategy begins with a foundational question: where are we now? In the first step toward building out an engagement
strategy, marketers need to align what business objectives they are trying to meet in building a better engagement strategy and how they
think their customer engagements will play out. During this stage, marketers should ask themselves the following questions:
• What are our company’s business objectives? In short, the answer to this question is about what your new
engagement strategy is there to do. Are you trying to go into new markets? Are you operating in an increasingly
competitive marketplace, so customer loyalty is becoming paramount? Are you trying to increase repeat purchases,
upgrades and renewals? What about bringing in new customers? Wouldn’t it be better to understand who is
statistically most likely to be a high value, high influence customer so “look alikes” can be targeted for acquisition?
• What engagement scenarios do we envision? For instance, if you are a manufacturer of toys that require assembly,
has this meant substantially more customer visits to the FAQs on the company website? And is the information there
adequate? Maybe it would be worthwhile to test a quicker solution, such as instant chat that delivers both Efficiency
and Relevance—since, as any parent knows, assembling a toy with an impatient child at your side can be an anxious
process. And do not forget that if a customer is eventually forced to pick up the phone to get the information they
need, loyalty can go out the window.
As Matt Dixon and Lara Ponomareff wrote in a popular Harvard Business Review blog post,
“Consumers who attempt to self-serve, fail, and are forced to pick up the phone are 10 percent
more likely to be disloyal than those customers who were able to fully resolve their issues in
their channel of choice.” 4
• What do we believe are the appropriate touchpoints for our market? To answer this question, it is important to assess
not only what engagement touchpoints are currently popular with your customer base, but ones that might be. For
instance, a retailer may believe it is time to start experimenting with location-based services, such as Foursquare and
Gowalla. (For a detailed look at what we call “The Shiny Object Fund” for testing emerging channels see the box later in
this chapter.)
• How do we believe our customers prioritize engagement? This question tracks back to the Engagement Elements, as it
is about determining how your customers prioritize their engagement needs, from feeling Valued to Control.
While these questions will all help marketers link how they engage with customers to their overall business objectives, by no means are
these the only questions one should ask when going through this initial step in the process. The goal is to figure out how you believe
customers are currently engaging with you, and make assumptions about areas where your engagement strategy might go in the future.
4 Matt Dixon and Lara Ponomareff, “Why Your Customers Don’t Want to Talk to You,” Weblog: Harvard Business Review, July 28, 2010.

2. Audit: Using Razorfish Links, Discover Your Customers’ Engagement Behavior and Attitudes
Next, it’s time to get a clearer picture of what is actually going on out there. While this step partially applies to studying your existing
customer base, it also should encompass a much broader analysis of online behavior. This will not only put the data about your customer
base in context, but also give you a picture of broader engagement trends you might consider tapping into.
As we mentioned earlier, for our Virgin America study, we used Razorfish Links, a three-pronged engagement audit to gather and analyze
data. It combines critical data sets which lead to a much wider and deeper perspective on the people you are trying to engage. They are:
• Consumer Data: A broad survey of customers’ engagement priorities and what channels they prefer to use when they
engage with you—combined with a series of in-depth interviews with customers to drill deeper into the data beyond
what a survey can gather. In our initial effort, we completed interviews upfront. Going forward, we plan to use
interviews to both help us design the survey and help us validate customer Engagement Types.
• Social Data: Broad data on the social graph, expanded beyond your customer base, to get as big a picture as possible
of online social behavior. This social overlay of publicly available data is important to do first because it may surface
things that counter basic assumptions. For instance, you may find the demographics you target use MySpace more
than you thought. This information is also needed to calculate your customers’ Consumer Influence Scores.
• Behavioral Data: Existing data from your customers on lifetime value (LTV) and how they currently engage with your
brand. This helps set a baseline from which you can move forward.
Combining and analyzing this data allows you to test the relationships between them. When we did this for Virgin America, we used several
types of statistical analysis, which led to a powerful picture of Virgin America customers, and how they fit into the broader social whole.

3. Assess: Determining How Data from Razorfish Links Aligns
to Customers and Their Potential Engagement Touchpoints
No two customers are exactly alike, yet, by applying analysis to the data from your Razorfish Links engagement audit, Engagement Types
specific to your consumer and brand will emerge. We will discuss how to act on these shortly, yet put simply, the data from the Razorfish
Links process will help you bucket your customers based on their traditional LTV, their engagement priorities, and the channels they are
likely to use, giving you a better idea of how to build your engagement strategy. Because influence is included in the Razorfish Links
process, you will also be able to figure out where eLTV plays a role. As we saw with our example about Oprah’s Favorite Things, this can
have a surprising influence on where to target your engagement efforts.
While it is relatively easy to know what to do with customers that have high LTV and/or high eLTV, here are other kinds of Engagement
Types your data assessment might uncover, and the questions these groups might lead to:
• High LTV Customers from an older demographic who have low eLTV because they have little interest in social channels.
As these customers already have a long-time track record of buying your product, but are not likely to influence others,
should they be the focus of your engagement strategy?
• Mid-LTV Customers who do not have nearly the LTV of the previous group, but who are early adopters of
location-based services and use them frequently to check in at retailers. If you have many retail outlets, does
this mean you should look more closely at engaging with this group?
• Low-LTV Customers who nonetheless seem the most likely to discuss your brand on social platforms. What potential
do these customers have over the long term, and if their individual potential is low, does their habit of “spreading the
word” and the number of people they influence make them worth concentrating on? Or are they only influencing
other customers with low LTV?
We created these three Engagement Types to emphasize the possibility that once influence is factored in, your view of which to focus on
may change drastically—but the truth will lie in your own Razorfish Links engagement audit. The Engagement Types for many clients might
not demonstrate a huge difference between LTV and eLTV, yet going through the process will give you assurance that you have in-depth
knowledge of the potential—both as individual consumers and as influencers—of your customers as you develop your engagement strategy.
Once you have been able to divide your customers into Engagement Types, it is time to assess what engagement touchpoints you should
use to reach them. We recommend these be separated into three buckets, which will at least help you pick types of channels at this point if
not the precise channels themselves. They are:
• Tried-and-True: These baseline channels are typically older channels that rank high across all customers and can be
used by the vast majority of them—touchpoints such as print, phone, email (transactional and promotional), and
postal mail. These in turn can be broken down into two sub-groups: channels where the status quo is working and only
needs to be continued, and those that need an innovation injection. For instance, you may notice that customers,
at first, are not only willing to subscribe to your emails but to open them—but that interest drops off after the
“honeymoon” period. This is a sign the channel has its merits, but that your email strategy has to become more
relevant to keep subscribers interested.

• Optimization Opportunities: These channels may be ones that are more valuable to one or more of your
Engagement Types. This might include somewhat newer channels, like Facebook, where the comfort level for
marketers lags behind consumers.
• Shiny Objects: These channels are more on the leading edge—like Foursquare, ShopKick or StickyBits—that might fall
out of most marketers’ customary list of engagement touchpoints (and may not show a large impact on the bottom
line) yet show potential given a marketer’s individual Engagement Types. Because these channels are more
experimental, they should be subject to scrutiny and a pre-defined budget, as different in-house constituencies—such
as promotions and customer service—evaluate whether they are useful touchpoints over the long term. (See “Shiny
Object Fund” tip on next page.)
4. Actions: Moving Customers Along the Value Continuum and Building an Engagement Ecosystem
WhenyoudevelopyourEngagementTypes,youaredoingsobasedonamomentintime,whiletherealgoalsofasuccessfulSustained
Engagementaretobuildengagementstrategiesthatwillincreaseincrementalsales,makecustomersmoreloyal,andincreaseadvocacyovertime.
Becauseincreasingadvocacyisakeygoalofthisstep,anotherpartoftheassessmentistoseehowyoucanmoveallofyourcustomersupavalue
continuumcomposednotjustofacustomer’smonetaryvaluebutalsoofhisorherabilitytoinfluence.Overtime,well-managedengagementsmay
increaseboth.IfyoulookbackatourhypotheticalEngagementTypes,youcanseehowit’spossiblethatthelowLTVcustomersmighttoutyourbrand
evenmoreifyouengagewiththeminwaysthatmeettheirprioritiesandmatchupwiththechannelstheyuse—andayearortwofromnowboth
theirLTVandtheireLTVmayhaveincreased.
Now that you have created your Engagement Types, the next step is to understand how they actually engage with your brand, how they
wish to engage, and what they expect in those engagements. As Dixon and Ponomareff so succinctly put it, “Running your company as if
customers want to talk to you isn’t just expensive; it’s potentially undermining your efforts to build longer-term loyalty.”5
A properly mapped
out engagement ecosystem will help you understand how you should invest in engagements based on expected return. To start, you need
to get answers to the following questions:
• Whyaremycustomersengaging?Aretheygettingintouchtocomplainaboutaproduct?Tolocatethenearest
insuranceagent?Tofulfillacoupon?
• Whichtouchpointsaretheyusing?Aretheyusingthephoneonlyafterhavinganunsuccessfulengagementonthe
website?DoesourFacebookpagegivethemtheinformationtheyneedordotheyprefertouseemail?
• Whatdotheyexpectfromtheirengagements?Dotheyexpectaquick,efficienttransactionwhentheygetintouch,
oraretheylookingfordeeperinformation?
• Howcanourorganizationimprovetheengagementexperience?Ifcustomersaredissatisfiedwithourcustomer
serviceIM,isitbecauseouragentsareinsufficientlytrainedtoanswertheirquestions?Whencustomersemailus,are
weansweringtheirquestionspromptly?
• Whatsortofinvestmentwillberequiredtoimproveouroverallengagementstrategy?Isitworththemoney
torebuildourFacebookpagetogiveloweLTVcustomersabetterexperience?
• Whatistheexpectedreturnoninvestment?Ifourbrandlaunchesacampaignbuiltaroundcheck-insonFoursquare,isitgoing
topayoffintermsofincreasedfoottrafficandsales?
5 “Why Your Customers Don’t Want to Talk to You” July 28, 2010

Putting Money Aside for Your Shiny Object Fund
In this chapter, we have referred more than once to “shiny objects.” In the digital world, these are defined as the platforms and
services that are the hot new thing, yet not ubiquitous enough to drive the bottom line. Right now, all of the talk is about location-
based services like Foursquare. Yet, just because shiny new objects are hot, does that mean you should be experimenting with
them?
If you think you should be, we advise you to look at maintaining a Shiny Object Fund to experiment with platforms that may hold
promise. How do you identify them? One clue may come from how your own customers rank platforms by Engagement Element.
Indeed, when we surveyed Virgin America customers, location-based services stood out across all of six Engagement Elements.
Clearly, even though few consumers are currently using them, those who are see the business implications, and you might look at
them too.
Once you have identified and prioritized which platforms are ripe for experimentation, it is important to have a process to validate
whether or not they can deliver on their promise. The Shiny Object Fund isn’t merely “funny money” that exists so you can tell
your companies and rivals that you have invested in the cutting edge. Having a process to validate shiny objects should tell you
that some platforms warrant eventually becoming part of your mainstream engagement efforts, and others do not.
Armed with the answers, you should be able to identify where efficient and low-cost and/or self-service solutions make sense and where
you can have more direct engagements in areas where a lot of high-value customers are congregating. In addition, it will give you the ability,
in real time, to identify when a high-value customer—both monetarily and influentially—is near, whether in-store or on site, so you can
send a notification to the right department.
For the purposes of this report, we chose to speak about engagement in general terms. We found you need to understand the top reasons
why your consumers engage with you: Was it to buy something? To ask a question? To perform tasks? We should note the reasons will
vary depending on your vertical, such as whether you are in the travel business or retail, or sell through other channels (as is the case with
consumer packaged goods or pharmaceuticals).
tip

An Engagement Strategy Is Never Over:
Channels,andtheWayConsumersEngagewithThem,WillEvolve
Experienced marketers know that email didn’t kill postal, social hasn’t killed email, YouTube hasn’t killed TV, and the Web hasn’t killed
traditional news sources such as the print version of The Wall Street Journal or CNN. Yet, touchpoints do not stay the same forever. They
are all evolving based on different pressures in the marketplace. The phone used to be the killer app when it came to engaging a high-value
customer; now it might be an exclusive website where he or she gets early access to new products. Most people’s primary technology for
interacting in the digital universe used to be the PC, but with the continuing advancement of smart phones that, too, is shifting.
Thus, you must maintain constant vigilance and continuously evaluate how every engagement point contributes. Today’s businesses can
no longer afford to be siloed. You need to look across all channels: store, Web, mobile, call center, and so on. You will need to have a
customer-centric organization in place with a data structure that takes in data from different touchpoints.
It’s one thing to say your organization is customer-centric and to cite instances when customers drove product design or you were able to
surprise and delight them on Twitter, or your campaign was integrated across channels. It is another to make a capital investment to create
a fully engaged enterprise where a customer-centric mentality permeates all departments.
Forward-thinking companies are there already. Urban Outfitters responds directly to product inquiries and discussions found in Twitter,
Facebook or blogs. Zappos and Boingo address customer service issues head on, regardless of the channel and without a script. Best Buy,
Starbucks and Gilt Groupe are actively extending beyond the walls of their stores and their websites to create valuable apps and shopping
experiences on platforms such as Facebook. Our own research reinforces the importance of adding value to these popular channels. It also
talks about the importance consumers place on feeling Valued. Yet, where are the returns and—from a business perspective—can they
truly be sustained? Always remember, a Sustained Engagement is only achieved when the expectations of the Engagement Elements are
fulfilled and consumers feel they will receive what they want in return for allowing you to engage with them—over and over again.
Ah, consumers. It’s important to note that one reason channels change is because consumers discover new ways to use them. Thus, between
ongoing changes in channels, and consumers changing behavior toward them, engagement strategies are never completely, well, complete.
Thus, as we said earlier, when we recommend that companies Align, Audit, Assess and take Actions, we are not talking about a linear process,
but a virtuous circle. Once a company has taken actions based on the earlier steps, it’s time to start all over again: realigning business objectives
based on what was learned from those actions; performing an updated engagement audit; assessing what the audit says about touchpoints;
and revising their actions. As this process continues, companies may find they have realized the vision of Sustained Engagement, increased the
influence of their most important customers, and ultimately, positively affected their company’s bottom line. To see how this process works in
practice, turn to Chapter Four, where we present a case study of Virgin America’s engagement strategy.

Building a Single View of the Customer
As you implement an ongoing test-and-learn strategy to define and refine your engagement planning across the different
segments, it is important to develop an integrated, single customer view across all engagements. This is a two-fold effort: first, you
need to actively collect the data to connect the dots to your customers; and second, you need to build a view of your customer
that sits across your company’s broad marketing apparatus instead of being siloed into different departments or touchpoints.
When it comes to building customer databases we feel like we are back in 1990, when everyone opened their eyes to email and
said, “Why don’t we have an email database? We can make customer experiences more efficient than they are with postal and we
need to capitalize on it!” Today we are entering a similar era with mobile, when brands will wake up in 2011‐2012 (if not sooner)
and say, “Why do we have 16 million consumers in our database and less than 100,000 mobile numbers?”
For your database to enable a true 360-degree view of the customer, it has to contain more than contact addresses—it must also
have actionable information about what channels your customers use to engage and what their purposes are when they engage
with you.
Brands are doing the right thing by reaching consumers on social networks such as Twitter and Facebook—as long as that is where
their customers are. Yet, they tend to forget they do not own this data and that, at any rate, the hot social platform of the day will
likely change. Facebook replaced MySpace—so what will replace Facebook? And when that happens, will you know where your
customers went? Building that connective tissue between your traditional CRM database, mobile devices and social media is critical.
Surely, building a company-wide view is another BHAG, but necessary for Sustained Engagement. Fortunately, it does not mean
you have to take everything into consideration. Today’s technology and business intelligence tools give you a leg up,
allowing you to get wider and deeper data and then look for relationships between engagement variables and LTV. The results
will reveal segments of low-, medium- and high-LTV with influence value—and key understandings about channel and
Engagement Element importance.6
6 For further reading on this topic, see: “One-to-One Marketing to the Masses” and “Fragmented Consumer” in the Razorfish Outlook Report.
tip

Virgin America:
Creating an Itinerary That Identifies and Leverages Customer Influence
Doing the first Razorfish Links engagement audit withVirgin America proved a great test of
our vision for gathering sharper insight into the engagement and influence of customers across
touchpoints.This was for several reasons.
First,Virgin America is a brand built around customer loyalty; thus, many of those who fly the
airline are deeply engaged with the brand, some through its innovative frequent flyer program,
Elevate, which certainly delivers on making its members feelValued. It is, simply, a more re-
warding program than what many other airlines offer, giving customers five points for every
dollar they spend on travel and having no blackout dates or restrictions on travel rewards.
Second,Virgin America is unusual among many major brands in that it does not use any mass
media in its marketing, instead relying heavily on word-of-mouth. (Admittedly, there may be
some halo effect from theVirgin brand’s many other businesses.)This reduced the number of
touchpoints we would have to account for in our research; it also meant that its marketing,
and its customers’ influence, are inextricably linked. However, we should note that some newer
brands—from Starbucks to Google to Zappos—have also built their brands using minimal
mass marketing.

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Third, though our research did enable us to splitVirgin America customers into distinct
EngagementTypes, the overall customer profile looked as though it would surface rich
engagement and influence data. Its loyal customers fly it despite the fact it is often more
expensive than other carriers—even if a less expensive option is offered—and the customer
base also engages with the brand across a dynamic set of touchpoints, from the telephone to
mobile.This would allow us to get a good grasp of how consumers use all sorts of channels.
With that, let us present aVirgin America case study that brings you through the Align,Audit,
Assess,Actions process.

Align:
On the Ground, Looking at Virgin America’s Current Customer Landscape
As we outlined above, Virgin America is heavily reliant on word-of-mouth. Therefore, it’s no surprise it jumped early into social media and
has a reputation for being a cutting-edge social brand. Its Twitter account, @VirginAmerica, though not a strict customer service channel,
has more than 125,000 followers. It also has a Facebook page with more than 68,000 fans—not bad for a relatively small airline brand.
However, it had gone into social largely on instinct. “We felt early on our customers were likely to use social channels, and the following
we have gotten confirmed this,” said Porter Gale, the airline’s Vice President of Marketing. “However, we realized we didn’t know nearly
as much as we wanted about what our customers wanted to get from us in these places. And, we didn’t know what the value of our more
social customers was.” Like Virgin America, Razorfish and Loyalty Lab (which also works with Virgin America) wanted to get a firmer grasp on
what it was getting out of its social platforms. Additionally—and these are things not specific to Virgin America—we at Razorfish were find-
ing that the proliferation of potential engagement channels was yielding more questions than answers. We wanted to find out things like
what value we could put on different kinds of engagement, and when a touchpoint was reaching diminishing returns; we wanted to be able
to use data on customer engagement attitudes and behavior to better select the right touchpoints. To do all of this, we need a much clearer
understanding of Virgin America customers.

Audit:
Using Razorfish Links to Determine How Channels Get
the Virgin America Customer Airborne
We entered the Razorfish Links process knowing that, because it uses three different types of data, it would help Virgin America get a
more accurate assessment of the engagement behavior of its customer base both now and in the future. Even if channels and engagement
priorities change, the methodology could be re-used a year or two from now to take the pulse of the company’s customers once again.
Though this is covered elsewhere in the book, the data sets we examined with Loyalty Lab drew from were a survey of 5,600 Virgin America
customers along with 15 one-to-one interviews of the company’s customers. Added to that was publicly available, anonymous social
connection data from 100,000 Internet users, and existing information from Virgin America on its customers’ engagement and lifetime
value (LTV) , allowing us to look at both self-reported attitudes and preferences, and independently tracked behavior. “Especially when one
takes into account the ever-expanding roster of channels, we needed to look beyond our customers’ self-reported insights, and beyond our
customer base, to get a full picture of how we might better engage with our customers,” Ms. Gale said.
So what did the Razorfish Links process uncover about Virgin America customers? The answer follows.
Assess:
Gaining Altitude with the Virgin America Engagement Types
We used cluster analysis to look at the relationship between engagement preferences and LTV as well as the relationship between a
customer’s power to influence and LTV; in Virgin America’s case, four clear Engagement Types emerged. On the following pages are sketches
of each and the implications that each group has for the company’s engagement strategy:

Engagement Type 1
SOCIALLY SAVVY
Their Value: The Socially Savvy are frequent flyers on Virgin America and thereby have high LTV. They are likely to
be Elevate members, and have, by far, the highest Consumer Influence Score. They also use the Internet more than
other Engagement Type and rank second in mobile users. This group is very well educated and earns a high income,
giving them the means to travel on Virgin America and an ability to appreciate the company’s unique offering.
The Implications: The Socially Savvy need an optimized digital experience if Virgin America is to keep a long-term
lock on them. As they demonstrate a strong propensity to influence, Virgin America will also need to tap into their
social media behavior, by making it easy for them to share their experience with their extended network.
Blane:
“I look forward to a long flight.”

Engagement Type 2
TRADITIONALLY ENGAGED
Their Value: The Traditionally Engaged have high LTV but relatively low eLTV; they are not that interested in social
media, and the limited amount of time they have may be why. This group contains the highest number of Elevate
members, and also uses the most mobile apps. It is most likely to open emails from Virgin America.
The Implications: The Traditionally Engaged may not be social, but they are certainly worth retaining. There are two
ways to do this: by optimizing some older touchpoints, like email, and focusing more on mobile.
Kate:
“I only have so many hours in
the day. ”

Engagement Type 3
UP-AND-COMERS
Their Value: The Up-and-Comers are a group in transition. They are moving from more traditional methods of
engagement into social media and mobile phone usage. They text frequently, and use the Internet for recreation
and networking. Their presence on Facebook is significant.
The Implications: While their income does not allow them to be frequent flyers on Virgin America, The
Up-and-Comers can be very vocal about their experiences. This potential emerging customer has the ability to
influence others in his or her network and should not be neglected. By ensuring positive experiences, future
relationships with them will be secured.
Fontaine:
“I’m loyal if I have a good,
personalized experience.”

Engagement Type 4
CONVENTIONALISTS
Their Value: From a technological standpoint, The Conventionalists are clearly in the background. They desire
personal interactions with the companies they do business with, either face-to-face or on the phone, and are low
income, and therefore low LTV. Since they do not use much technology, they also have low social influence—and
no interest in being a brand advocate or in receiving brand messages.
The Implications. Since The Conventionalists are not technologically sophisticated, and desire a personal connection,
Virgin America will have to focus on efficiency to drive the bottom line if it’s to cater to this audience. The question
becomes whether this investment will be worth it, as some of this Engagement Type will have the potential to get
closer to center stage by becoming Traditional Engagers as their travel profile changes.
Brad:
“I’m not just another customer.”

The differences in loyalty to the airline, channel usage, and interest in social media—or lack thereof—among the four Engagement Types
underscore the seemingly infinite list of engagement scenarios Virgin America could employ to satisfy its customers. But which Engagement
Types and channels deserve the most attention? Should the company focus efforts on The Traditional Engagers who are low on social usage,
but have high LTV? Or pay more attention to The Up-and-Comers and The Socially Savvy because they are more likely to spread the word?
And what about The Conventionalists? Given that they prefer usually high-cost person-to-person interaction, is there a way to satisfy their
needs without busting the budget?

Actions:
Reaching Cruising Altitude on an Engagement Strategy
The beauty of being able to break down Virgin America customers into four Engagement Types is that potential engagement strategies
begin to flow almost immediately from them. By being able to determine not only LTV, but eLTV, for the Engagement Types—and combining
those metrics with the channels each Engagement Type prefers to use when engaging with the airline—some channels, and engagement
needs, begin to look more important. Others, frankly, don’t.
So what sort of recommendations can we give to Virgin America based on this information? The four Engagement Types are separated
along two primary dimensions—their ability and willingness to fly with Virgin America and their willingness to engage in social media. Thus,
the trick is to exploit both, in ways that maximize return. Here are potential actions for each group:
• Socially Savvy: These are Virgin America’s most valuable customers because they are both willing to buy and because
they reach out to others. The engagement strategy will need to satisfy both needs. Channels that meet their
engagement priorities—accompanied with ways to share that experience—will help their LTV and influence
feed off one another. For this group, Virgin America could stress both email and major social platforms such as
Facebook and Twitter; it can optimize email by making sure the content meets this group’s needs, and also make that
content easily shareable, therefore taking advantage of the The Socially Savvys’ LTV and eLTV.
• Traditionally Engaged: These customers, while not as high value as The Socially Savvy, deserve a more focused
engagement strategy of their own—particularly because of their heavy mobile usage. Since Virgin America isn’t
currently very active in the channel, it should consider building mobile touchpoints that fit the group’s engagement
priorities. Especially in mobile, airlines have a major opportunity to bring consumers utility; in Virgin America’s case,
this is a channel it can no longer overlook.
• Up-and-Comers: The customers that are part of this Engagement Type are neither as social as The Socially Savvy nor
as heavy on mobile use as The Traditionally Engaged, and their income doesn’t allow them to travel as much as either
of those two groups. However, what makes them stand out is their potential—they could be The Socially Savvy and
Traditionally Engaged of the future. Because they are transitioning into heavier social and mobile use, some of the
same touchpoint refinement that Virgin America could undertake for the preceding two groups might also work for
them. Building out the current Virgin America Facebook page—which is primarily a fan site—would also be a smart
move, given The Up-and-Comers’ heavy presence on that social platform. And, Facebook would be a low-cost channel
making it an easy place for Virgin America to experiment. One thing to remember about The Up-and-Comers: despite
their relatively low value, they should be treated with special consideration because they have few experiences with
the brand, and each experience will play a big part in their perception, positive or negative.
• Conventionalists: This group presents a challenge, because of their low social influence and interest in personal
interaction instead of more cost-effective digital platforms. While they may adapt to some of the newer touchpoints,
the best fit for them might lie in the future, when technology is more able to emulate the personal touch they desire.

While these broad actions emerge for the Engagement Types, we also discovered other nuances through studying Virgin America customers.
Over the years, our research has consistently demonstrated that the more channels through which you engage your consumer, the
better. However, we also know that more does not necessarily mean better, if those channels, either together or individually, fail to deliver
on the Engagement Elements. In fact, during the course of our evaluation, we noticed Virgin America’s high-value customers opened fewer
of the company’s emails and had fewer clickthroughs within the emails than one would have assumed. This led us to recommend that the
company take a look at whether it was sending out emails more frequently than even its high-value customers wanted. While higher value
and loyal customers are more interested in getting communications from the company compared to others, there is a tipping point at which
they start tuning out. Couple the emails with all the messages coming at them wherever they go and we are reminded over and over that
we are battling for the consumer’s attention while trying not to overwhelm her. The obvious fix is to work on not only message frequency,
but also on relevance, using tools such as micro-targeting by interest to pique interest.
Hitting the Ground Running With New
Engagement Opportunities
Virgin America, while a brand very active in digital—and social channels—still had much to gain from going through the Razorfish Links
process and getting to know the engagement attitudes and channel usage of its customers better. By amplifying some underused
touchpoints, focusing on others for the first time, tweaking strategy on a few others, and delivering on customers’ engagement priorities,
it has an opportunity not only to continue to please current customers, but influence new ones as well. For a word-of-mouth brand like
Virgin America, this could be engagement gold.

The New Customer Loyalty:
Finding the Right Way to Engage
By David Rosen, Senior VP, Strategy and Channel Development, Loyalty Lab
As marketers like Virgin America try to build Sustained Engagements, they need to leverage one program that is most likely
already part of their marketing arsenal: the loyalty program. Our in-depth research of Virgin America’s guest base using Razorfish
Links exposed a rich picture of loyalty that included how often and where customers traveled, their usage of Virgin America’s
co-branded credit card and their willingness to pay more for — and recommend — Virgin America.
You will note that Elevate members did not fit neatly into the Engagement Types discovered by Razorfish. As with Virgin America,
you may find those in your loyalty program have a mix of attributes—they may favor different platforms or have different priorities
about what they want from you when they get in touch. Some may have high LTV but relatively low influence, while others will be
as important to your brand as influencers as they are as customers.
True, loyalty program members are not all alike; fortunately, loyalty programs do not have to be one-size-fits-all either. As
with touchpoints, the options for exciting customers in a loyalty program are exploding — including discounts and rebates, elite
benefits, digital rewards, exclusive access, friend-to-friend offers and “once-in-a-lifetime” experiences. At Loyalty Lab, we have
found a successful loyalty program is about more than a variety of incentives; it’s also about delivering the right message to the
right person at the right time with the right motivator. The most successful loyalty marketers optimize their marketing
investment by determining through testing the best combinations of segment, next action and motivator—driving faster, more
efficient migration up the loyalty curve.
As you implement a loyalty program, it is also important to keep in mind that because customers join in exchange for something
more—such programs provide companies with numerous levers for strengthening both direct and extended value that cannot
necessarily be used in other marketing initiatives. Among other things, loyalty programs are a platform for advocacy. Marketers get
a much richer and more accurate depiction of their customers’ value and influence. By crossing high value and high connectivity,
brand ambassadors can be given the exclusive treatment that makes them want to spread positive word-of-mouth about a brand.
Also, tools such as the “My Account” function can become the hub for capturing things like Facebook engagement, as well
as being a go-to location for discovering new ways to interact with the brand, such as mobile applications and communities.
Loyalty programs can also be the launching pad for Sustained Engagement. They are a pathway for permission for closer and
more frequent contact with your best customers. Long-term value always begins with a first connection—a purchase, a
sign-up, a “follow” or a “like.” Strong loyalty marketers use enrollment to learn more about their new members, determine
their potential, and identify what motivation will move customers to become further involved in the program. After that, the
journey really gets rolling, as a loyalty program is the single best tool for focusing the dialog and continuously driving,
recognizing and rewarding members.

The Transitionals:
An Encapsulation of How Engagement is Changing
As we analyzed the research from the Razorfish Links study withVirgin America and
Loyalty Lab, one age group stood out to us—not because they tended to have high lifetime
value (LTV) , or were big adopters of new technologies—rather, they best encapsulated the
state of transition consumers and marketers are experiencing. It is a place where touchpoints—
and the ways consumers interact with them—are continually dynamic, and often surprising.
We call this group, aged 25 to 34,TheTransitionals, because their behavior didn’t neatly fit in
between the two other age groups we studied—the 24 to 30 group and those 45-plus. Rather,
they exemplify one characteristic from each demographic: acting like the younger group, yet
thinking like the older group. Like their younger counterparts, they may sometimes grab for
their iPhone toTweet about their dissatisfaction about a product or service. On the other hand,
when asked to quantify the importance of the six Engagement Elements, their answers
resembled those of their elders.

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Before we discuss them further, we should point out one very important thing: while right
now, this group falls into the demo often referred to as Generation X, we expect that, as this
generation ages, a new group ofTransitionals will take their place. In other words, we
believe that as technology continues to evolve, there will always be a group caught between
the feelings of their elders and the behavior of those who are younger than they are. So, if
right now this group is Generation X, a few years from now, it will be the next group that
takes on these caught-in-between characteristics.
It is worth taking a closer look atTheTransitionals’ behavior because they are fascinating
predictors of the engagement future we are already seeing, when channel importance and the
way consumers want to interact with brands will not necessarily go hand-in-hand.
Here is how this mapped out forTheTransitionals in terms of engagement philosophy and
engagement channels:

• Engagement Philosophy: While the Engagement Elements ranked in the same order across all age groups, the
Transitionals statistically were not as interested in feeling Valued, or in Efficiency or Trust as the younger demo. In
fact, the 45+ group and the 25-34 year-old group agreed on the statistical importance of only one Engagement
Element—Relevance.
• Engagement Channels: The disconnect between engagement philosophy and channel use holds true across all age
groups, yet The Transitionals are still particularly worth looking at because for them it is more pronounced.
Additionally, they show a bigger disconnect between the new channels they adopt and the ones they use when they
are trying to engage with a brand. While those in the 45+ group steer clear of services like Yelp, Facebook and mobile
applications, The Transitionals are much more likely to use these channels. The Transitionals are also less likely to use
channels that are still popular with the 45+ group, like the phone, email and postal mail.

For marketers, The Transitionals are critical for understanding the next engagement wave—and the ones that may follow after that. As
technologies and channels continue to proliferate, we will likely continue to see similar waves of adoption and transition roll across age
groups. This means to speak across multiple generations and meet their engagement needs, it is critical to have multiple touchpoints. A
25-year-old may want a transaction conducted via a mobile app to be efficient; a 35-year-old may use that same app but be looking for it
to deliver on a different Engagement Element.
It is hard to predict at this point, but, as we said above, we expect there may always be a middle group of consumers in transition as new
channels emerge; if this is so, it will require a calculated approach to CRM. After all, age groups have never existed in isolation. The younger
generation may continue to influence the behavior of older ones, but they may never have the same priorities when it comes to their
engagement needs.

Conclusion:
The Beginning of Understanding Consumers and Engagement
This may be the conclusion of our first “Liminal” report, but to us, it feels like the beginning—
the beginning of discovering the connections between the ever-expanding roster of engagement
touchpoints and what customers really want when they use them to engage with you.
Of course, this book has also been deeply immersed in data.We hope, as you’ve read it, you’ve
learned many specifics about the contemporary state of how consumers use channels; how they
perceive engagement and the role social influence will increasingly play in many marketers’
strategies.We also hope you’ve learned some approaches to help you identify how your
engagement strategy should map out going forward. It’s no longer enough to optimize current
platforms but to constantly experiment—as consumers do—with newer ones that could have
major impacts on your business.

C
However, the specifics in “Liminal” shouldn’t distract from its real point—and that’s to put a
stake in the ground recognizing that the nature of engagement is changing as channels
proliferate and consumer behavior changes.Thus, the Razorfish Links approach we took
towards research in this report should be considered foundational—the building blocks for
what we hope are annual studies by Razorfish of the liminality of consumer engagement.
Several years from now, we may find it strange that people ever questioned whether mobile
would become a dominant platform, or that Facebook, to some companies, was once thought
of as a marketing curiosity.
We don’t know.
What we do know is that whatever we discovered about consumer engagement this year will
change, and we would like to have you with us as the journey continues in years to come.

Privacy and Permission:
Four Key Considerations All Marketers Should Think About
Every time you browse the Internet in search of a new house, text a $10 donation to a charity,
respond to an offer to receive more information about the iPad or check the balance of your
401(k) from your smartphone, you demonstrate trust that the information you choose to share
will be protected. But, you also know these activities can be tracked and used by marketers to
target you based on those behaviors.As the focus of this book is how to use online behavior
to build richer engagement experiences, it is important that we address the front-burner issue
of privacy.
The online advertising, marketing and publishing industries are engaged in an ever-progressing
and broadening debate about the proper handling of Personally Identifiable Information (PII)
and the proper use of behaviorally targeted advertising. Here are four key considerations we
think all marketers should ponder:

addendum
01
1. Standards and laws are changing all the time.
Consumer privacy and preferences concerning marketing are a key concern for companies. There is legislation, such as The Health
Insurance Portability and Accountability Act (HIPAA), which attempts to limit the display, purchase, or sale of PII without the individual’s
consent. In addition to federal guidelines, such as the U.S. Department of Commerce’s Safe Harbor Privacy Principles, individual states are
also weighing in with privacy protection acts and rulings.
The biggest news recently in government attempts to regulate privacy is the Federal Trade Commission’s proposal late in 2010 to
develop a “Do Not Track” program, patterned after the “Do Not Call” registry started several years ago to rein in telemarketers. It would
allow consumers to completely opt-out of being tracked. While a proposal is not a mandate, FTC chairman Jon Liebowitz said the “Do Not
Track” proposal is offering best practices to companies.” The proposal also demonstrated that Liebowitz was serious when he said, at a July
hearing, that the government can “use the bully pulpit” to convince the private sector to self-regulate.
At this writing, the federal government is also considering a bill that was proposed by Representatives Bobby Rush (D-Ill.) and Rick Boucher
(D-Va.) in the House—however, since Boucher was defeated in the mid-terms, it’s unclear what the fate of the bill is. Senator John Kerry
(D-Mass.), is also pursuing online privacy legislation to complement those efforts. It should be noted, however, that Democrats are not the
only ones to take up the privacy cause. Just one day after the election, Rep. Joe L. Barton (R-Tex.), said that Internet privacy legislation may
be a legislative priority in the next Congress.7
Razorfish is watching two areas in the proposed legislation closely:
• A provision that puts an 18-month “expiration date” on customer data, which could have a chilling effect on loyalty
and relationship marketing programs.
• That the Boucher bill does not differentiate between PII and anonymous identifiers like IP addresses or cookies that do
not require the release of PII. The Interactive Advertising Bureau (IAB), a key industry group, shares this concern.
7 http://voices.washingtonpost.com/posttech/2010/11/internet_privacy_in_next_congr.html

The industry has been taking note—and taking steps to self-regulate—for some time now. Galvanized by the focus the FTC and Congress
have been putting on the use of tracking cookies to aid behavioral targeting, the U.S. advertising industry formed the Network Advertising
Initiative (NAI) in 1999, a coalition of 35 leading online marketing companies committed to reinforcing responsible business and data
management practices and standards. The NAI has made consumer education a top priority. Its latest initiative, the Advertising Option Icon,
is a link for consumers to a disclosure statement on any site that engages in behavioral targeting. The program, launched in October, has
support from all of the major advertising trade groups, from the 4As to the Association of National Advertisers.
Today’s social networks provide new sources of rich consumer data, and marketers are constantly looking for social graph overlays to other
behavioral data. Despite legitimate concerns over the collection and use of online data, we want to stress that the data collected by Rapleaf
for use in the Razorfish Links process is publicly available, including things like Twitter and Facebook profiles. Anyone who wanted to could
find this data online.
2.Transparency and disclosure are critical—
giving consumers notice and the ability to opt out are not enough.
The Center for Digital Democracy recently pointed out that privacy policies are often misunderstood and inadequate. It cited a study
conducted by The University of Pennsylvania and University of California (Berkeley) which found 63 percent of adults incorrectly believe
if a website has a privacy policy; it means the site cannot share information about them with other companies without their permission.
One reason for this misunderstanding may be that privacy policies are written in legalese that most consumers cannot understand. If
marketers are required to gain consumers’ consent to track their behavior, the onus is on marketers to clearly explain the benefits and
persuade sign ups.
Despite the public angst over privacy, many consumers do not read privacy policies thoroughly before agreeing to them. Gamestation
demonstrated this in an April Fool’s Day prank, adding this clause to its terms of service: “By placing an order via this website on the first day
of the fourth month of the year 2010 Anno Domini, you agree to Us a non-transferable option to claim, for now and forever more, your im-
mortal soul.” Even though Gamestation provided an opt-out link—and gave anyone who opted out an $8 voucher—only 12 percent of users
opted out, while 7,500 users agreed to sell their soul!

3. Careful handling of privacy data is challenging—and can be expensive—but it must be done.
Where PII should physically reside within a company is a very important question. If a company chooses to store information in-house, it will
often face the need to meet standards and the associated cost to achieve compliance. This can have a huge financial impact, which makes
storing this information in a certified cloud storage facility a much more viable option.
Consider for a moment government agencies that find themselves in a particularly challenging position—mandated simultaneously to
widely disseminate and strongly protect the information they collect. They are an excellent source for best practices, even for private
industry. Here are some interesting examples of best practices from each agency’s handling of PII. In general, the regulations, mandates and
related guidance boil down to:
• Know what PII you collect and all the places it is stored and used.
• Reduce the collection and storage of PII wherever you can.
• Control access to PII no matter where or how it is accessed.
• Encrypt all PII both when it is “at rest” (in storage) and “in motion” (being transmitted).
• Consistently monitor PII for privacy breaches and notify affected groups as soon as possible.
All five are sound practices that regulation will either force companies to deal with or will be dealt with through industry self-regulation.

4. Permission or consensual marketing really does matter.
From Facebook to Gmail to Amazon, consumers’ willingness to trade their data and online behavior for a more personalized experience is
all over the place, depending on what is at stake: I don’t understand it. I hate it. I get it. I love it.
Consumers seem to be thinking, “I love it when Amazon.com recommends a new book based on my interests—but I still hate it when
Facebook tells the world about my recent break-up.”
While companies have privacy policies, consumers do not. Consumers are often not aware of—or frankly, that interested in—what privacy
policies contain, as Gamestation proved. The consumer approach is much more pragmatic:
• They need to see what they get from allowing companies to track and store their information.
• They need to trust the company with their information, so companies must be transparent about their practices
and respect the data.
• They need to feel somewhat in control of their information.
Make no mistake—customers are in charge these days. They can filter you out, search anonymously, blog about their recent experiences
with you and broadcast to their professional network online that you and your services should be avoided.
In short, ultimately the consumer decides when it is time to engage. It’s what your mother always told you—listening is more important
than talking. So next time, ask them for permission before you speak.
Privacy:
A Moving Target Marketers Have to Hit
As the above illustrates, the issues concerning online privacy are not static. Potential legislation, consumer attitudes, and in-house policies
about use of data are under constant scrutiny and changing all the time. Thus, what we present here is merely a look at where things stand
now. A year from now, legislation may have been enacted, industry leaders may have taken new self-regulatory actions, or maybe—but
doubtfully—nothing much will have changed. We recommend the following sources to keep track of privacy issue.

Privacy-Related SITES
• DMA Privacy Center (http://www.the-dma.org/privacy/index.shtml)
• Interactive Advertising Bureau (http://www.iab.net/)
• Laboratory for International Data Privacy at Carnegie Mellon University (http://privacy.cs.cmu.edu/)
• The Office of Information Policy US Department of Justice (http://www.justice.gov/oip/oip.html)
• HIPAA—United States Department of Health and Human Services, Office for Civil Rights, Web page
on medical privacy (http://www.hhs.gov/ocr/privacy/)
• California privacy laws—California Office of Privacy Protection (http://www.privacyprotection.ca.gov/)
Privacy-Related BOOKS
• Privacy in the Information Age, by Fred H. Cate. (Brookings Institution Press, 1997)
• Information Ethics: Privacy and Intellectual Property, by Lee A. Freeman and A. Graham Peace.
(Information Science Publishing, 2004)

Methodology:
The Research Process Behind Razorfish Links
As we’ve stated throughout this book, the Razorfish Links engagement audit helped us
understand engagement from a consumer’s perspective.We were able to do this by combining
and analyzing a number of different data sets, which together formed a clear picture of what
consumers think makes a successful engagement and the touchpoints they use to make those
engagements happen. Here is a deeper description of the methodology Razorfish and
Loyalty Lab used to reach the conclusions in this book.

Assumptions We Made During Our Research
In the process of conducting research, those doing it have to make a number of assumptions about the objects under study—how the
findings will be used, who can provide the best data, and how that data can be approached. Such assumptions have to be made so the
research does not become too unwieldy. Following are some that warranted mentioning so you can better understand the research’s
strengths and limitations.
Perhaps the most important assumption we made is in how we approached the topic of engagement. As we said earlier, from the
beginning, we wanted to determine how consumers, not marketers, understand it. Relying on consumers to give us that information
grounded the data in the opinions of the most important group for any business—the people who buy its products. Having a
consumer-focused approach also allowed the research to generate novel findings that marketers might not have been able to come
to on their own.
We realized that asking customers directly about engagement has limitations—that’s why we used multiple methods of data collection
and analysis so that we could come at the issue from a variety of perspectives. This afforded us a more complete view of the consumer
experience of engagement. As is stated early on in the book, in addition to gathering data directly from customers, we also used customer
data provided by Virgin America and publicly available social network data compiled by Rapleaf on 100,000 consumers. These inputs
created a view of both self-reported attitudes and preferences and independently tracked behavior, which allowed us to build a robust
understanding of how people engage with a brand.
addendum
02

To make this research viable and useful, we chose to look at the broader problem of defining engagement, understanding the elements that
make a successful engagement and tracking how these elements change. We have not explored all possible circumstances, but we believe
we have found critical ideas that can be tailored to a large number of situations.
Indeed, the number of possible channels and scenarios quickly add up—when combined, they create an almost infinite number of
engagement paths. Therefore, we had to make assumptions about the number and types of channels consumers would potentially use,
focusing on two areas: first, the channels that dominated early discussions with consumers, and second, the client interest in certain
channels. It was an integrated approach, combining consumer-focused data with marketer input.
One of the most important choices we made in this research was inviting our client Virgin America to take this journey with us, because
the company offered us a unique opportunity to investigate consumer engagement—Virgin America uses minimal mass marketing, relying
heavily on word-of-mouth. This approach reduced the number of touchpoints for which we would have to account. We also chose not to
collect a number of different types of variables. For instance, we did not examine psychographics—not because we don’t think psychographics
are important but because it was necessary to build guardrails around the research to keep it on track.
It’s also important to assume that how consumers engage with brands differs by category. Consumer interactions with an airline brand such
as Virgin America may be very different from how a consumer engages with a retail brand such as JCPenney or a consumer packaged goods
company like Kraft Foods.
Our Approach Toward Landscape Research
We began our research with an industry audit of existing definitions and descriptions of engagement. We found that the idea of
engagement is complex and in flux; among the many sources we consulted, we found over 20 usable definitions, most of which focused on
how marketers measure engagement within a certain channel. These findings helped build the foundation for the research that followed.
How the One-on-One Interviews Were Conducted
We spoke in-depth with 15 Virgin America customers who represented the full range of lifetime value (LTV) to the brand—high, medium
and low. Some were members of Virgin America’s frequent-flier program, Elevate, while others were not. Participants were also screened
according to whether they travel for business, leisure, or both, and by a number of other criteria, including what they do online, mobile
usage, income, gender, location and age.
They were a diverse group, which ensured we could capture a range of experiences, and develop an exhaustive list of touchpoints, which
were later used in the card sort exercise (see below). We began our discussions with the interview subjects looking at engagement in
general. Then, we continually narrowed our focus—to how they viewed engagement experiences with companies, then with airlines, and,
finally, specifically with Virgin America. Open-ended, directed questions were used to elicit the language and experiences associated with
positive and negative engagements.

Grouping Touchpoints Using an Online Card Sort
As we said above, we were able to compile a robust list of engagement touchpoints from the one-on-one interviews. We did this through
a free list exercise rather than having interview subjects pick touchpoints from a pre-selected group. Using an online card sort tool,
participants were asked to group and label these touchpoints to help us better understand how customers structure and organize their
engagements with brands.
Using multivariate statistical methods, we analyzed 98 card sorts to produce the key groupings of touchpoints, such as those related to
advertising, communication, shopping and social media. These groupings, along with key themes from the interview findings, drove the
structure of the online survey and provided a critical framework for our growing understanding of engagement.
How We Developed the Online Survey
The online survey integrated the key Engagement Elements that emerged from the interviews, and the channel data from the card sort,
to measure the frequency and importance of engagement with brands in general, eventually narrowing down to specifically focus on
engagement with Virgin America.
The survey focused on the perceived value of different touchpoints, the frequency of use of different touchpoints, and the types and
relative importance of various interactions with the brands. Critically, the survey examined how individual channels were rated on each
Engagement Element.
In total, more than 5,600 surveys were analyzed with basic statistical techniques that took into account demographic and
technographic characteristics.

WHO WE SURVEYED
Of course, when conducting a survey, it is important to survey the right people given the context of the research. Thus, we looked at
how representative our sample was by comparing known variables such as the gender, age, income and education of Virgin America
customers (as provided by the company) to the percentages we found in the survey. We can assume that if these variables are similar,
then other unknown variables should be similar as well. Here is a look at how survey respondents, Virgin America customers, and the
general U.S. population—using 2009 U.S. survey data—compared:
• Gender: Virgin America customers are 53 percent female, whereas females make up 50.7 percent of the total U.S.
population. In the survey, 58.6 percent of respondents were female. It’s not unexpected to find this percentage slightly
higher, since women are more likely to respond to surveys.
• Age: Survey respondents skewed toward the 25-34 age bracket with almost 35 percent in this category. This is very
close to the percentage of this age group found in Virgin America’s customer base, which is 38 percent, but very
different from the general population, in which only 13 percent are in this bracket.
• Income: The income of survey respondents tracked closely with Virgin America customers but also differed greatly
from the general population—this was mostly because we were surveying a population that travels heavily on an
airline that only operates in select markets. While 48 percent of Americans earn less than $50,000 per year, only
17.1 percent of respondents did; only 11 percent of Virgin America’s customer base falls into that income bracket.
Fifty percent of respondents earned more than $100,000, while only 21 percent of the general population is in
this group.
• Education: Among survey respondents, 42.5 percent had an undergraduate degree, compared to 47.5 percent of
Virgin America customers. Both these percentages were significantly higher than the national average of 16 percent.
This trend continued with professional and postgraduate degrees, which were held by 34.3 percent of respondents and
38 percent of Virgin America customers, but only nine percent of the general population.
So, can these results be generalized to a larger segment of the population? The survey population matched Virgin America’s customer base
very closely in all demographics, but was younger, more educated and higher income than the general population. Therefore, these findings
will be especially relevant to industries that cater to similar customers, but will also be applicable to industries that may be targeting this
population in the future. We believe that we have captured a sample that will be driving trends for the foreseeable future.

How We Incorporated the Social Data Overlay
The survey responses were matched with LTV data from Virgin America and multiple measures of publicly available social connection
behavior, which examined factors like which participants are connected through social networking sites, such as Facebook and Twitter. This
helped increase our understanding of the connections between, attitudes toward, and perceived value of touchpoints, social engagement
and the value those bring to a brand.
How We Calculated LTV
The revenue data was used to produce an LTV figure for each person in the survey. For members of Elevate, LTV was based on the number
of points earned. For non-members, LTV was calculated by adding all airline purchases made under a particular email address. In this case
we used LTV, as it was an intuitive concept that allowed for easy interpretation of results.
How We Calculated the Consumer Influence Score
The Consumer Influence Score included four main components: number of Twitter updates, number of Twitter followers, number
of connected friends and total number of social sites. For each Engagement Type, a mean of these four variables was calculated to
create a comparable index across each profile. This provided a basis for relative ranking of the Engagement Types.

This report would not exist without the help of a supportive and diverse group of creative
thinkers across the Razorfish agency network and its partners.They have our deepest
gratitude for helping us shape this report.
In addition, we want to give special thanks toTeresa Caro, Director, CRM Solutions, and
Chad Maxwell,Vice President, Research for creating the hypothesis that led this report,
creating the approach and spearheading the entire project from start to finish.Without their
efforts,“Liminal” may never have crossed the threshold into reality.
THANK YOU

PARTNERS:
CONTRIBUTORS:
Teresa Caro
Cynthia Edwards
Mark House
Richard Hren
Whitney Hutchinson
Jason Leigh
Chad Maxwell
Daniel Quinn
Scott Rhodes
David Rosen, Loyalty Lab
Craig Schinn
Bari Schulman
Sonali Sureka
Catherine Toupence
John Zell
Vivian Zhu
PROPAGANDIST:
Katie Lamkin
CREATIVE:
Illustrations:
Mark E. Wetzel
Creative Direction:
Jennifer Snow
Design:
Elizabeth Stevison
BLOG:
Jaime Senior
Erik Bigelow
liminal.razorfish.com
T

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ABOUT RAZORFISH
Razorfish creates experiences that build businesses.As one of the largest interactive marketing
and technology companies in the world, Razorfish helps its clients build better brands by
delivering business results through customer experiences. Razorfish combines the best thought
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