Power of customer engagement
How can you stay connected with your customers? How can you respond to their queries while retaining a consistent message across all channels? Customer engagement is perhaps the only answer.
In present times companies have only one option - 'customer engagement' to remain competitive and profitable! The term 'engagement' has been around for a while now with various meanings.
Customer engagement is the process of being involved with customers by interacting with them through relevant dialogues and experiences in order to support them and their networks in buying decisions.
Engagement is a process and a process usually includes various steps that are carried out in a co-ordinated fashion and can be repeated. It is not a one-off activity and aims to build a long-term profitable relationship for both the parties.
Engagement is all about being involved with customers. Involvement goes beyond a handshake it's about genuine interest in what your customers feel, say and think about your company, products and market. It is about having mutual understanding between a customer and a vendor.
Engagement includes interaction through relevant dialogues and experiences. It's not enough to just listen to your customers' needs, store them for subsequent analysis purposes and then forget about them. It's about being able to get customers feedback, showing them that you care. Entering into a meaningful dialogue by adopting a two-way communication is important to understand the needs of customers.
Engagement is about supporting customers in their buying decisions. In the end, the relationship between your company and customers makes up for a business relationship. As in any good relationship, both the parties will be benefitted from a healthy relationship. Besides, customers have demands and seek solutions by using your products or services and as a company you want to sell solutions to generate additional revenue. The better you manage this engagement process and stay involved with your customers by responding to their needs on time, the better you will be able to help your customer make the best buying decision.
Engagement is about looking after a network of people. In today's world of social media, people seek help and support to get information about new products and services. Engagement takes into account that each individual customer has not only a whole network of family, friends and colleagues, but also Twitter followers, blog readers and visitors, who are influenced by what customers have to say about your company.
From a historical perspective, it makes sense to define target markets that can be reached with a specific marketing campaign. In fact, it's the only logical way to do so, as there is no other cost-effective way to differentiate within target groups. Get an advertisement printed in a magazine and then this magazine is mainly read by a certain audience. As a marketer, you want the audience to learn more about your products, so you use this magazine to reach an individual by means of reaching to an entire group of people. Of course there would be a group of non-interested readers as well, but it is the best you can do. The larger the magazine's readership, the more returns on your marketing investment. How much exactly is unknown, as sales attribution is an offline marketing model and even harder to accomplish as compared to online marketing model, as rightly said by Lever Brothers founder Lord Leverhulme, “I know that half of my advertising budget is wasted; but I'm not sure which half.”
From market-driven to customer-driven
Customer engagement transforms companies from being market-driven to being customer-driven and changes the way they communicate. Market-driven companies, as the word implies, see the market as leading all activities. Such a company does not look at a single customer, but rather divides the market into homogeneous target groups. A target group represents a market segment with similar demographic characteristics, which respond in the same manner to a specific market stimulus. It disregards the needs and uniqueness of a customer, simply because the word 'market' means trade and revenue. It primarily tends to look at people as a source of revenue ('what can I get from you?' instead of 'what can we mutually offer each other?). It is perhaps subtle, but striking nonetheless!
Being customer-driven, however, requires an entirely different attitude. It demands that organisations make a customer the starting point of all their processes instead of results. Customer-driven companies seek long-term customer relationships. From company's viewpoint, a customer relationship is regarded as the most important asset. Customer lifetime value, calculated as the net present value of all cash flows attributed to a relationship with a customer, emphasise on customer service and long-term customer satisfaction, rather than on maximising short-term sales. Occasionally, being customer driven may even mean the desired result will be to not to close a deal if it was not in the best interest of a customer. Eventually, this type of customer-centric behaviour will pay itself back, as it will be rewarded by a customer. A short-term investment may have a long-term payback.
Real-time dynamic segmentation
This transition from being market-driven to customer-driven requires a much more fine-grained marketing approach. Instead of looking at large group of similar customers, a marketer looks at an individual customer's needs and wants and tries to fulfill them. It will no longer suffice to segment customers prior to a marketing campaign. Rather, as a marketer you let customers dynamically segment themselves in real time, as they express their needs to you. This segmentation is based not only on demographics, but also on individual characteristics like interests, needs and online behaviour. This way segments become areas of interest rather than a collection of people with a similar demographic profile.
Being customer-driven also depends on anticipating customer needs and fulfilling them. This needs listening to and properly understanding a customer at one hand and quickly responding to customer's needs on the other hand. This is different from traditional push marketing, where pushing the right content on a website was the king. A marketer decided on what message would fit best for his target audience and published this on his channel(s). In today's world, it's about pull marketing, where a marketer tries to 'pull' the needs, wants and desires of a customer, in order to know better what to offer him at the right time and at the right place.
Benefits of customer engagement
Being customer-driven automatically increases the engagement level a customer experiences with a company. This customer-driven engagement may require initial investment. However, research shows that engaged customers on an average offer 23 per cent premium in terms of wallet share, profitability, revenues and relationship growth.
Besides extra money, an engaged customer is willing to spend and engagement helps in improving customer loyalty. Loyalty leads to a more reliable, constant revenue stream at a low cost. As loyal customers require less marketing, promotion and sales efforts, the total cost-of-sales will be significantly less for a new customer.
The new game rules require organisations to become more engaged with their clients. Engagement strengthens a customer relationship, which benefits both the customer and the organisation. Also, engagement will have its repercussions on internal processes. Internal collaboration between colleagues, teams, departments and even divisions need to be enhanced. Information on various channels needs to be synchronised and customers must be heard for better understanding.
This needs co-operation and smooth flow of information, especially when dealing with multi-step purchase processes. Any one interacting with customers must be involved.