In recent years, the concept of customer engagement has received a great deal of press. In simplest terms, customer engagement is the emotional connection that exists between your brand and your customers.
The word you should note in that definition is "emotional." Because increasing numbers of consumers have begun conducting extensive research before making a purchasing decision, you may be thinking that such decisions are based on rational, logical thinking. Nothing could be further from the truth. However, according to research, conducted by Gallup, customers, interacting with your brand and your people, form strong emotions that are extremely influential components of their purchasing decisions — positively or negatively.
Engaged customers can quickly become brand advocates and influencers, giving you the type of marketing that can only be earned - never purchased. However, customers who are actively disengaged can also be influencers; if they do not "love" your brand, they may be quick to share their negativity with others through reviews, forums and social media.
In between the two poles are your indifferent customers, those who could move either way. Obviously, you want to turn indifferent customers into engaged ones while encouraging engaged customers to become "true believers" in your brand.
The problem that often arises, however, is that it can be difficult to identify which customers are truly engaged. Gallup suggests using three factors when establishing tracking technology and measurements:
- The company always delivers on its promises.
- I am proud to be a customer of this company.
- The company is perfect for people like me.
Allowing responses that range from complete disagreement to complete agreement, such as a scale of 1 to 5, can give you a more accurate picture of how well you are doing. However, even a simple true/false response can provide you with insights into whether you are succeeding at your efforts to engage your customers.
If this seems like too much trouble, you might want to consider the following:
- In the consumer electronics field, fully engaged shoppers spend 29 percent more on each shopping trip than customers who are actively disengaged.
- Fully engaged hotel guests’ average annual spending is 46 percent higher than guests who are actively engaged.
- Overall, fully engaged customers yield a 23 percent premium in terms of revenue, share of wallet, relationship growth and profitability when compared to the average customer.
- Fully engaged customers are not as price sensitive. They buy more, shop more frequently and tell others about your brand freely.
Engaging customers is not the same as merely satisfying them. Engaged customers feel that they have a personal relationship with you that is based on mutual understanding and respect. Today's consumers expect every company to satisfy their basic requirements such as shipping orders on time, providing a usable product and addressing issues promptly. You must provide more if you want to create fully engaged customers.
In the traditional model, the function of marketing has been to attract new customers. Ad campaigns, sales promotions, coupons, reward programs and similar efforts may be enticing, but they will not generate the emotional connections that you need for customer loyalty and long-term profits. Such efforts are more likely to create relationships that are based solely on price, with fickle customers who have no loyalty to you or your brand. As a result, you will need to expend considerable resources to attract a constant influx of new customers to replace those who have "dumped" you for a lower price.
Historically, customer service and marketing have existed independently. In the modern environment, however, marketing is a never-ending cycle that has to include building strong customer relationships. Without strong relationships, you cannot hope to establish a large base of fully engaged customers — and without them, your company is not likely to prosper.