Across market spaces, organizations feel the pressure to remain relevant. As a result, many have developed a strong sense of urgency to craft more meaningful customer experiences and shift to more customer-centric ways of working.
The imperative is simple: to provide excellent customer service is to create a loyal following.
The essence of customer engagement
Organizations struggle to acquire and retain customers. Several factors are at play, including the proliferation of 24/7 connectedness and media adoption trends, hyperdynamic markets, the decline of traditional advertising effectiveness and consumer willingness to pay, and the amalgam of technologies that impact consumer reality to name a few.
As a result, consumers have raised and diversified expectations regarding customer service. In response, organizations seek to improve their customer-centricity. This is also known as seeking “customer engagement”. Anticipating and acting on individual needs related to products and services tends to create a strong impression with consumers.
This spells the difference between organizations remaining competitive or falling behind the rest of the market. This insight drove Amazon to create personalized stores for its customers, Netflix to build its media recommendation services, Google to serve contextual ads, and Coca-Cola to launch named bottles to grab the attention of their respective markets.
So what is customer engagement? The term was coined back in 2011 when consumer behaviour scholars conceptualized it as a psychological state of commitment and involvement . This involvement can be with an organization, brand, user community, or product. Importantly, this process occurs before or as a result of consumption behaviour. In doing so, it explains how consumer’s motivations can be leveraged to generate revenue and indirect value, such as data.
In our views, customer engagement bridges customer service-dominant logic to behavioural theories and relational marketing. Its virtue is that it offers a frame to capture, interpret and act on customer behaviour. It promises success to organizations that are responsive to customers’ needs and provide engaging experiences in a memorable, personalized and bilateral way. At the same time, it is a particularly dense and transversal topic. Its implementation has intricate implications, as being customer-centric touches on organizations’ processes, people, technology and information flows.
Why successful organizations care
According to Gartner, Inc., investments in customer engagement drive increased customer satisfaction loyalty and advocacy . Such outcomes lead to superior revenues and customer lifetime value, retention and profitability. In other words, engaging customers improves the bottom line.
The need for customer engagement
Organizations who are successful in engaging their customers know them very well, they know their communication preferences and they gather various insights that allow for a personal engagement. They know customers expect to be able to interact in the same way across all channels – and sometimes even ecosystems – at any place and time.
Going full circle with data
The highest goal for these organizations is to let customers enjoy personalized customer journeys across channels (omnichannel) and even connected platforms. These journeys can help shape how a consumer relates to the brand, to its products and services and to the user community at large.
The customer engagement value chain
How to come full circle? Executing customer engagement strategies requires a transformational change to happen. Digital business transformation initiatives can be guided to maximizing customer-centricity in the organization. This allows organizations to build the most relevant customer experiences and impress clients with excellent and differentiating customer service skills.
Executing a customer engagement strategy
Putting engagement strategies to work involves the creation of electronic service interactions and coordinating conversations with consumers across physical and digital channels. This includes, for instance, performing commercial transactions, offering personalized communication, recommending the next best action or product, making any product or service-related request, and so forth.
To realize personalized and coordinated experiences organizations need to leverage a circular information model that captures, stores, analyzes and makes the best use of data linked to customers. Introducing this implies organization-wide changes, as technology changes are just one aspect of the transformation. To run the model, organizations need to be connected, agile, innovative and able to make real-time decisions.
Personalization requires knowing your customer
Customers are inserted into the heart of the business and IT operations. A logical implication of this is to structure the organization around customer information. This is because putting the customer first and offering personalization depends on a data-driven organization that treats customer information as a high-value asset. This means capturing all possible relevant data having the fullest confidence in its quality. Then, on-the-fly analysis techniques are used to establish a continuous understanding of the customer. This understanding is used for personalization, which can be offered in varying degrees.
Handle with care
Companies need to be careful when dealing with customer information. It takes a continuous effort to build good relationships, but they can be easily destroyed. In order to avoid painful situations, it is imperative to set up a proper data/information management and governance, together with a solid risk/privacy management and ethical framework.
Where will your journey take you?
Mapping the desired degrees of personalization to a value stream offers a clear way forward. Each level corresponds with a transformation growth path for the organization and creates clear goals and ambitions. One path needs to be sufficiently mature before moving on to the next. This helps you to structure execution while building the right capabilities within the organization.
The customer engagement value chain
Find out how INNOCOM can help execute your customer engagement strategy today.
: Brodie, R. J., Hollebeek, L. D., Juric, B., & Ilic, A. (2011). Customer engagement: Conceptual domain, fundamental propositions, and implications for research. Journal of Service
Research, 14(3), 252-271. doi: 10.1177/1094670511411703
: Thompson E. (2018). Realizing the Benefits of Superior Customer Experience: A Gartner Trend Insight Report (ID: G00348272). Retrieved from Gartner database.