Note: Customer engagement is one of those words bandied about, often mentioned, but seldom analysed in terms of achieving business goals. In this new series we’ll look at customer engagement as something that “CAN” improve business results, but also can have exactly the opposite effect – in effect costing far more than it adds.
These days, the term engagement is so common, you can hardly read anything without coming across at least one mention of it. Of course, there’s “employee engagement” as a term, but there’s also customer engagement. In all cases both are considered to be good things to invest in. Often that’s not the case. In this multi-part article we look at why customer engagement is neither the “holy grail”, and where companies are going wrong
In this first part, we’ll look at the problem of definition, and the questions business must ask if they are to transform engagement into a better bottom line.
Definitional Problem With Customer Engagement
First, as is also the case with employee engagement, the term customer engagement can mean almost anything. For example, it can refer to how long a person stays on a website. Or how long a customer spends in a store. The problem is that without answering the following questions, we aren’t thinking about engagement in enough detail so we can make business decisions based on it.
The Key Questions
With what (or with whom), are customers “engaging”?
Engagement, in a general sense, has nothing to do with profitability or other business goals. It’s an assumption that, for example, the longer a customer spends on a website, the more likely it is they will make a purchase, or click on an ad. That’s just an assumption, and is often NOT true. In later installments of this series, we’ll give you some clear examples where engagement does not only NOT have a return on investment, but can actually COST business owners — a negative return on investment. So you have to define and think about what customers are actually doing as part of the engagement process you are trying to create.
How Is Increased Customer Engagement Going To Cause Better Business Results?
As above, the assumption is that more customer engagement is better, and that’s simply not the case. Some kinds of “engagement” (interacting with employees or products) can help sell. Some kinds are completely neutral, and have no effect, and some interactions and types of engagement will actually result in worse performance for the company.
In addition, the kinds of engagement that work differ from business type to business type. As you’ll see in some of our later examples, a theme park (think Disneyworld) that has customers standing around, relatively “disengaged”, is going to have serious problems. That’s because a theme park is ALL about engagement, and it’s a reasonable conclusion that if people are not engaging in activities, they are not having a good time, and won’t be back. For theme parks, engagement with the staff, rides, and other features is ESSENTIAL
On the other hand, a retail store that manages to keep customers in store, via access to, let’s say, games, or test driving something, whether it be a car or a television, may or ma not benefit. Some people are tire-kickers, and come in for entertainment only, and aren’t buying, regardless.
At the other end of the scale are situations where increased customer engagement can cost business money. Again, you’ll see examples later in this series, but consider, for now, a fine dining restaurant. Restaurants operate on low profit margins, and many will not make a profit unless they can have serval services per night, and turn over the tables relatively quickly. For many restaurants, if customer engagement means LONGER stays at the table, and less table turnover, the net result is negative.
In short, if you have invested in increased customer engagement, or plan to, you MUST answer at least these two questions. If you don’t, you may discover that your profits drop. Just because customers are “doing something” that’s keeping them in contact with your business, doesn’t mean they are doing the RIGHT THINGS that will increase profit.
Robert, I have always maintained less is more (see my article, Why Less is More for Customers: https://www.linkedin.com/pulse/why-less-more-customers-gautam-mahajan?trk=mp-reader-card )
People believe they must contact customers, engage customers. I am not against staying in touch but to take away time from the customer just to chit chat is a no no. In fact, I advocate the shortest, smallest customer journey, and the minimal customer experience (I do not mean poor customer experience, I mean unnecessary customer experience (read engagement))
Keep hitting your points so people will see reason
There is an old story of a chicken and a pig standing out in a large field watching a billboard being erected that proclaimed the upcoming week as “Ham and Eggs Week.”
“Isn’t it exciting,” said the chicken to the pig, “to be engaged in this exciting week.”
“You may be engaged,” replied the pig, “but I’ve been committed!”
Words are crafted or chosen to convey meaning in a fashion that fosters understanding, even insight. So, let’s consider the word, “engaged” and its noun cousin, “engagement.” Engaged means occupied. Look it up in the dictionary or Wikipedia! For employees (or customers), that literal definition would mean “present or busy.” Stated differently, the opposite of “engaged” is either absent or dead!!
Look around your organization. Would employees who were present and busy get your heart racing? While Woody Allen may have said, “Eighty present of success in life is just showing up,” that might not be the mantra of a high performance organization. Are we sure we want to promote employee engagement as a lofty organizational goal?
So, let’s look at the pig side of the story. While the thought of the pig’s outcome is not exactly a pleasant one, the point of the story was the pig’s inevitable skin in the game. And, while the pig had no choice, the objective of employee commitment is to foster and nurture an intrinsic zeal to perform at a high level. Employees with commitment, devotion, and love of their work demonstrate passion, initiative and achievement. Their mission goes beyond simply clocking in and occupying space in a work setting. Employees deeply committed to the mission of their organization, act like owners, eager to pursue excellence. They spend their energy winning, not whining. They set the tone and lead the way towards being their very best and helping those around them do likewise.
“But, commitment and devotion and passion is what we mean by ‘employee engagement,’” you may chide. If you have to explain what a word means, perhaps the wrong word has been chosen. Somewhere along the way, some group of professionals or academics, tired of the all too-familiar labels like employee motivation, worker satisfaction, employee commitment, employee morale, etc. decided on a new label.
So, now we want to adorn a label with similar vagueness in the phrase “customer engagement.” The ambiguity and “can mean anything” or “let me explain what I mean” again clouds our understanding. Somewhere along the way, realizing customer satisfaction might not be best evaluation of a great customer experience, some group of professionals or academics, decided “customer loyalty,’ “customer devotion” or “customer advocacy” were all just way too soft since “we need to be scientific, logical and rational.” So, they chose “customer engagement” as their new moniker. And, we are back to having “some explaining to do.”
Maybe we should stop focusing on employee and customer engagement and start supporting employees and customers in ways that nurture their passion and devotion–for their work, for a brand, for an organization, or for all of the above. And, for those with deep allegiance to this new vague and popular label, let the games begin!!
A related, and no less important, question is: How much value is the customer receiving from engagement with a vendor, irrespective of type, duration, etc.? Emotional value of the engagement experience, the memory it creates, and resulting downstream behavior lead to some level of monetization. Companies can – and need to – identify the level of perceived value, and resulting financial return, that engagement produces.
Last year, Bob Thompson wrote an excellent piece about customer engagement – http://customerthink.com/customer-experience-vs-customer-engagement-a-distinction-without-a-difference/ – and several of us participated in dialogue about it. In related blogs, I looked at several aspects of engagement – personalization, advertising and gamification:
http://customerthink.com/we-marketers-see-personalization-as-a-customizing-value-building-communication-and-experience-tool-what-do-the-consumers-think/
http://customerthink.com/in-our-super-connected-world-how-should-advertising-really-work/
http://customerthink.com/where-is-gamification-going-some-new-rules-or-stated-another-way/
Your point about engagement being a challenge to define, whether we’re talking about customers or employees, is also extremely powerful. There is certainly a willingness, among both marketing and HR execs, to take for granted that engagement is something that always produces positive results – and, as you point out, there’re really no evidence to support that position.
Hi Robert: I’m glad to see you dissect the term ‘engagement.’ I agree that there’s too much fuzziness around the term, and your explanation helped me recognize that there’s a spectrum involved – negative engagement to positive engagement. At some point, the spectrum crosses zero. By paying attention to exactly what type of engagement is involved, and assessing its value to the customer and to the enterprise, companies can make better decisions about strategies and tactics.
I found your last sentence, “Just because customers are “doing something” that’s keeping them in contact with your business, doesn’t mean they are doing the RIGHT THINGS that will increase profit,” particularly interesting. Very often, business executives are judgmental about customer and prospect actions, terming them ‘right’ or ‘wrong’ within the context of what the company does, or what the company wants customers to do. They go further by considering profitability-over-all, and eschew customers or activities that are deemed ‘unprofitable.’
While it’s vital for every enterprise to take a discriminating view of which outcomes or results can be provided profitably, I’ve seen this right/wrong viewpoint mutate into a sort of corporate hubris or arrogance that prevents change. Customers become under-served and go elsewhere to buy. At some point, someone in the conference room must speak up and say, ‘this is what our customers want when they engage, and here’s why. Maybe, we need to change our approach . . . ‘