We no longer live in a linear world. Simply going from point A to point B is a much more complicated proposition today.
This is truly the case in marketing. Think about the traditional classic marketing funnel, the one with a large opening at one end that funnels down to a small opening or point at the other end. The funnel suggested THAT customers start with awareness, move to research, go to consideration, comparison shop and then buy.
While these actions still take place, it is no longer as simple as logically guiding customers step-by-step in a linear way from point A to point B.
Why? We live in a time-starved, productivity-oriented, multitasking, technology-enabled, information-driven world. We seem to thrive in it — or at least, tolerate it.
Each time we seek information or information is presented to us (with or without our “permission”), we are engaged in the world around us. We are actively participating in ways that marketers want to use to their advantage.
The marketing funnel of old is now an explosion of information and potential for engagement at each and every point in a relationship with customers. Perhaps most important: The relationship does not stop at the cash register. It takes place during the entire customer experience — from post-purchase, to product use to sharing the experience with others.
Engagement: The basics
For marketers, engagement is simply the “voice” of the customer. Specifically, engagement is what those customers effectively say, think, feel and do with your brand or product. How do you engage your customers? Are you listening to what they’re saying and, more important, delivering it to them?
Measuring engagement is, in essence, listening to the voice of the customer. They’ve responded to an advertising or marketing message. They have voiced their opinion. They went to your website.
You can listen to what they are saying and thinking by what they do during the visit. If customers respond to a survey, you’ve not only heard what they’ve said, you can also measure the level of engagement by the number of people that chose to respond.
Monetizing engagement is the direct business value you gain from what you hear customers say. Direct business value is simply the relationship between the types of engagement being measured (e.g., number of phone calls to a call center), and the impact it has on your business.
Case in point: Say your company advertises a special limited-time offer. The offer has created a number of different engagements. Specifically, 100 people respond to your message by calling your toll-free number. What’s more, 200 people visit your website. And 10 people post your offer on an online bulletin board. The “voice” of the customer has spoken. Your company has been “listening” by tracking and measuring the impact of the advertising.
Further, you registered purchases from 10 people who called and 20 web visitors. The bulletin board postings resulted in measurable traffic to your website, which in turn resulted in one more purchase.
In this example, the monetary impact (people who purchased as well as those who did not) of engagement is easy to calculate. It is tangible and real.
Measuring engagement and using it in productive ways poses several challenges. Understanding each challenge and mapping an approach that mitigates or minimizes them can help create a framework for successful engagement measurement.
Challenge #1: What to measure.
Most companies understand key drivers to success. The task, then, is to identify which customer engagements impact those key drivers.
If a pricing premium is important to your business, you have to give customers an avenue for voicing their perception of price/value, and then listen and act on their opinion. Prioritize what to measure by the value or insight it brings in relation to the cost or complexity it takes to provide it.
Challenge #2: Don’t look at engagement as a series of independent actions.
View it as a set of engagements that add up to a relationship with a single customer. By doing this, you are viewing the relationship from the customers’ point of view and are more apt to make decisions or take actions that meet their needs.
Further, make sure you fully understand the root origin of data you are using to measure a particular engagement. There’s nothing worse than looking at bad, incomplete or misinterpreted information.
Challenge #3: Measure engagement within the entire lifecycle of the customer.
As mentioned earlier, relationships with customers do not start or stop at the cash register. It’s critical that you understand the customer lifecycle for your particular product or brand, and create engagements at each phase.
Challenge #4: Understand the differences between customer groups or segments.
Not all customers are created equal. Segmenting and understanding the particular needs and behaviors for each segment is important. Having the correct engagement opportunities and then knowing how to interpret what customers are saying within each segment creates more customized and effective marketing efforts.
Challenge #5: Use engagement to get the entire organization on board.
Listen to customers across multiple engagement points. Using the information to guide an organization’s actions is an opportunity to get each and every person within the company on the same page and focused on the same points of information. A simple discover, define, analyze and optimize system will help you get started and maintain the internal discipline to make the most of the your efforts.
Engagement is here to stay. It is transforming the world of marketing. It will continue to impact, change, challenge and enable marketers for the foreseeable future. So focus on getting your organization to understand this, plan for it and embrace the opportunities it provides.
Chad Giddings (firstname.lastname@example.org) is executive vice president, marketing and planning, for J. Schmid & Associates, a catalog consultancy based in Mission, KS.
WHY IS ENGAGEMENT IMPORTANT?
Research has shown that companies that understand and leverage engagement across multiple channels (web, retail, catalog) enjoy larger revenue growth and profit margins.
Think about it: What marketer wouldn’t want to engage customers and get them to act in some way, shape or form? What merchant wouldn’t be interested in learning what its customers are saying? Who wouldn’t want to use this knowledge to make decisions and support the needs of the company or brand?
A McKinsey & Co. report recently discussed the relationship between the number of customer touchpoints or engagements and the number of opportunities or chances the customer had to either further a product relationship or substitute it for something else.
The report suggests both good news and bad news. Simply put, the more engagements, the more opportunities for continuing the relationship and making it stronger.
At the same time, each customer engagement creates a pass or fail situation. “Pass,” and the relationship is alive and well — for now. “Fail,” and the relationship may flounder. Each engagement earns you the opportunity to further the product/customer relationship.
There are tactical advantages and purposes for measuring customer engagement. They include providing measurement benchmarks, getting quick and easy customer intelligence, and an ability to make better and faster marketing related decisions.
On a broad, more strategic level, engagement measurement is challenging how marketing organizations are structured and staffed. It is affecting the processes and systems that support entire companies, as well as what types of external partners companies seek to support their needs.