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Why measuring and improving Customer Engagement is critical to growth

August 19, 2019

Blog Cover Why measuring and improving Customer Engagement is critical to growth_1 Cover Image

Another meaningless buzzword?

No, not this time. Customer engagement is a serious business – although it can be fun too. OK let’s get the definition out of the way and then we can dive into the problem and what it means for you.

  • J. Brodie references three academic authors on the subject of Customer Engagement (CE) to come up with a powerful proposition, “(CE) represents a strategic imperative for generating enhanced corporate performance, including sales growth (Neff 2007), superior competitive advantage (Sedley 2008), and profitability (Voyles 2007).

  • Wikipedia talks about a connection made between stakeholders of an organisation

  • Hollabeek et al, describe CE as "the level of a customer’s cognitive, emotional and behavioral investment in specific brand interactions,"

(emphasis mine in all quotes)

Look where that leaves us

Putting it together we learn that, if you can tap into a customer’s INVESTMENT in your products and services, creating a strong connection between you and them, you can build growth and profitability and in doing so, leave your competitors in the dust.

No wonder Jack Neff described it as a strategic imperative. But there are many pieces to this puzzle that have to be thought through if you are to build a successful strategy from these insights.

Let’s start with a thought experiment

One good place to start is with you. You are a customer, and you have good and bad experiences to draw on. Here are two questions to get you thinking and one to get you doing. But first, jot down a list of some brands with which you have had a really good experience.

Question 1: What did you like about your experiences with your favourite brands?

Question 2: What could have made those experiences even better?

Now, the application question: How does your company measure up to those favourite brands?

Try this as a warm-up exercise at your next offsite, or founders’ meeting or at your weekly sales or marketing meeting. It doesn’t need to take long, but it will give you areas to think about and build on.

Our own impressions are valid, but…

Although our own impressions give us a good steer and help us to think in the right way, we have better resources to use – real data.

So, what should we measure?

At this point, people often answer a different question – “How should I measure engagement?” and they bang on about social media listening tools, website analytics, client surveys, focus groups, usability tests and the like. All truly very good and all missing the point.

What point? That the how is less important than the what. It’s easy to deflect the question so that we come up with a list of techniques. But what we really need is answers to fundamental questions from our customers:

  • What do they want from us?
  • What do they find useful?
  • What things will continue to be useful over time
  • What keeps them coming back?
  • Why are we different?
  • Where should we focus our efforts?

Behind these fundamental questions are a host of more specific data gathering opportunities – IF we have engagement KPIs in place – and most people don’t.

Co-creating value

The key thing about engagement is that the supplier and the customer co-create value. What does that mean?

  • Well, you as a supplier solve a problem for a client. The client in return pays for it. You then draw the client in deeper with some amazing support, so they feel secure, and trust builds.
  • You then give them access to better tools, loyalty benefits and so on, and they start telling their friends about you.
  • You then provide them with an opportunity to help co-design your next product – what services and features would be most useful?

Over time the relationship has become symbiotic – mutually fruitful. Do you want more leads through referrals – or are you focused on retaining your existing client base and making it more and more loyal?

  • Client service KPIs such as:
  • Client retention rates
  • Client lifetime value
  • Client attrition rates
  • Answering times
  • % problem resolution
  • Client satisfaction
  • Client referrals / reviews / advocacy
  • Collaboration

speak more to loyalty and retention, whereas engagement with lead generating content on social media and ads; clicks, shares, and conversions are the type of engagement metric that drives new business, along with:

  • Client acquisition cost
  • Content engagement: Shares, retweets, click-through rate and conversions

How important is customer experience?

A few years ago a Gartner study claimed 89% of marketing leaders (respondents) believed they would be competing on the basis of customer experience by 2017. The same study revealed that 44% of consumers described their customer experience as bland.

How true is this of your company, and what can you do about it?

  • Don’t sell a product, show your customer you understand them
  • Engage your staff in the delivery of customer experience (a blog in its own right!)
  • Work emotionally as well as rationally with your customers
  • Offer the opportunity for your clients to interact with you
  • Ask for feedback, assess it, rinse and repeat

To bring us right up to date, the latest Serial Switchers’ Survey asked the question, “What difference would it make if you had a good customer experience?” Here’s what they said:

  • 55 percent of respondents indicated they would be more loyal,
  • 47 percent would recommend the company to others,
  • 26 percent would use the company more frequently if they could
  • 26 percent would spend more money.

What would that mean for you and your business?

Ian Dalton

Written by Ian Dalton

Ian is the former group CMO of Euroclear SA/NV, a co-founder of QPQ an Ireland-based FinTech and CEO of Flagship Marketing, a Fintech growth agency. He holds a Law degree from Cambridge University (UK) and postgrad diploma in digital marketing from the Institute of Digital Marketing. He is also a trustee of the Children's Charity, The Giraffe Project