2021 Reflections continues this week with focus on Customer Engagement. It is considered as a consumer behavioral manifestation towards a brand or firm that goes beyond transactions. This requires reimagining the entire journey, which many organizations find hard to achieve after years of incremental improvements. Frequent high-quality interactions enabled by digital technology are crucial in building a strong commercial relationship. Let’s take a look and analyze the potential focus areas and action items to ride this growth wave and cruise through the new reality
Research Insights
According to a recent KPMG-initiated Forrester Research, customer relationship is now the foremost competitive differentiator, making it vital for organizations to engender customer loyalty. Brands with high engagement scores and equally good profit margins include Google, Microsoft and Coca- Cola. They score high on connections with consumers, showing the formation of deep emotional bonds
On similar lines, a Forbes report shows that:
And, a Gartner report suggests that an actively engaged customer is more willing to participate with the organization on multiple channels, ranging from online self-service tools and mobile applications, to community participation or group-user deployment. They are also more willing to provide feedback, make the best use of products or services on offer, and make suggestions on how to improve them
Understanding Customer Engagement
Customer Engagement describes the level of interaction that consumers have indirectly or directly with a brand or company over time. It includes all interactions that occur during the entire customer journey – before, during, or after transactions, whether via voice call, SMS, WhatsApp messenger, online, or in-person. It also includes customer interactions that may be independent of specific transactions such as social media endorsement or criticism as well as comments posted on review sites. It is a proactive journey that begins even before a customer has acted or purchased anything
Companies can reach out to consumers to inspire purchase, build brand recognition, solicit feedback and gather information. Customer Engagement is both measurable and actionable. For a business to obtain such quantifiable insights, however, its definition needs to be consistent across the Organization
Engaged Customers and 5-Pillars of Customer Engagement
Engaged customers look like this:
It is important to nurture these relationships for the long-term and these are the 5 critical components to enable localized and personalized customer engagement:
1. Intelligent Interactions
2. Hyper-Personalization
3. Cross-channel Connectivity
4. Customer’s Time of Choice
5. Secure & Robust Connectivity
Let us delve deeper into each of these components and determine what it means for organizations…
1) Intelligent Interactions
Customer expectations have changed. To keep up with the dynamic expectations, businesses need to stay at par with customer preferences across all points of contact and interactions. Some ideas are:
Connect brand CRM to customer service help desk and ticketing software
Automate customer satisfaction surveys (This enables automatic quantification of customer experience at key points in the journey – such as one week after onboarding or one month after upgrading – and enables getting insightful data to track over a period of time)
Automate customer check-in emails while keeping them personal
Use automated help desks and bots for quicker resolution
Automate onboarding process
Prioritize and automate the routing of support tickets
Automate marketing by creating email workflows for sharing valuable and personalized content
Automate employee surveys and feedback programs for identifying areas of improvement
Automate triggers for customer check-in
Automate alerts for customers at risk of churn
2) Hyper-Personalization
Companies can identify exact needs of customers with the help of behavioral data and interpret individual characteristics with the help of emerging technologies. This has resulted in a paradigm shift from the erstwhile product-centric marketing to a more personalized customer-focused marketing
Research suggests that 40% customers leave a website and buy from a competitor after being drowned with options and hence hyper personalization can help solve this by providing customers only with the most relevant options. Also, we must note that context is important in hyper-personalization. In fact, they are incomplete without each other
For example, a hyper-personalized consumer experience can analyze contextual data such as the customer’s preferred device. This data can become even more contextual by gathering information like the location from where the device is accessed, the time of day when the user is most active, or the industry with which the user is associated. There can be more real-time factors, such as price points and previous interactions with the brand to improve the quality of the data. There’s a correlation between the extent of hyper-personalization and revenue curve, as illustrated below
The key difficulties for organizations in moving from simple segmentation to hyper-personalization are:
Organizational silos
Automating decision at scale
Assembling a real-time view of the customer
Understanding the ‘contextual’ layer of customer behavior
Creating compelling offers and content
Integrating 3rd party data
Data quality
Building a sustainable data architecture
Understand channel-wise personalization needs
Key elements for building hyper-personalized Customer Engagement programs are:
3) Cross-channel Connectivity
While customer interactions occur at the product- and brand-level, the engagement itself transcends across the entire value chain of the organization. Returns management, creditworthiness, service challenges and customer lifetime value are just some of the concepts which require a connected organization. Omnichannel engagement leverages a multi-channel sales approach to provide customers with an integrated shopping experience. The customer could be shopping online from a mobile app, a web storefront, or even offline in a brick-and-mortar store and yet the experience must be consistent. This means ensuring that customers receive the same engagement experience and message across all channels and touch-points
Key elements for facilitating Cross-channel Engagement are:
Gather (continuous) customer insights
Serve customers where they are
Enhance the shopping experience (Use next-gen technologies for customer interaction & engagement use cases)
Engage with customers in real-time
Improve customer experience
The modern customer wants total control over their buying and servicing decisions. They want to purchase products and services on terms where value delivery is critical. At the heart of this is how well the organization tracks and uses information from customer journeys across sales, fulfillment, and delivery cycles
Illustration: Starbucks Rewards App
4) Customer’s Time of Choice
Time is one of the most crucial factors impacting the success of customer engagement. Knowing when customers are ready and willing to pay attention increases the chance of captivating them, guiding them through the customer journey and motivating them to choose the brand when the right moment arrives
Illustration: Amazon’s Choice Campaign
One of the biggest factors that determine the success of marketing campaigns is the time of day when the messages are sent. Product managers could be sending out an amazing discount or the wittiest text ever created. However, if the campaign is sent at the wrong time, then all the efforts get wasted. In contrast, a less attractive discount that is sent out at the optimal time of the day performs significantly better and generates higher engagement. Peak times vary based on industry as well as the content of the marketing campaign. Therefore, organizations should try to time their campaigns based on the time of the day, day of the week, weekday or weekend, time of the month by making an educated guess on when the customers are more likely to receive notifications
5) Secure & Robust Connectivity
The importance of a secure customer journey has grown manifold along with a rise in investments in digital business and online customer engagement. This has led to the proliferation of customer accounts and associated data sets across industries. Customers expect an easier digital experience including fast authentication and login, as well as seamless web and mobile interactivity. With the advent of omnichannel customer engagement platforms, delivering an experience-driven, secure journey has become the competitive imperative
Businesses can enhance their customer experience and differentiate themselves from their competitors by incorporating “Digital Trust” into their customer engagement model and platform. It is no secret that acquiring a new customer is more expensive than retaining an existing customer
Some of the key attributes of Digital Trust are:
Reliability
Credibility
Integrity
Transparency
Security
The objective should be to increase digital trust by converting customers and stakeholders to become Digital Advocates. A Digital Advocate is someone who has such a high level of digital trust around a brand that they inspire others and use their networks to spread the word about your products and services. Those companies that demonstrate high levels of digital trust will find it much easier to quickly grow the number of Digital Advocates, leading to increased sales, revenue, and consumer loyalty
In Conclusion
The correlation between customer engagement and customer loyalty is profound. An engaged and loyal customer will show his/her loyalty by repeat-buying from a company, spreading the word about the business through social sharing, and referring other people like friends and family to the business and/or product. A current customer spreading the word to other people is perhaps the most important tool in a company’s arsenal. Organizations must leverage this great power!
References and Sources:
1. Notes from Airtel Business Insights on Customer Engagement