Customer engagement can yield short-term or long-term rewards or penalties. Are you tracking all of these?
- Short-term rewards: uptick once or for one period — engagement value exceeded underlying value
- Long-term rewards: uptick that sticks or increases organically — engagement fit the customer’s expectations and circumstances
- Short-term penalties: negative word-of-mouth — engagement was ill-timed or a hassle
- Long-term penalties: decreased spending or churn — engagement didn’t live up to customer’s expectations
How can you maximize long-term rewards and minimize penalties? Make sure your marketing is centered on customers‘ well-being from their perspective.
“An unprecedented 100% of executives believe their customer engagement process is set up to successfully deliver. However, not all are doing what is necessary to be truly customer-centric. This rosy self-assessment may be due to a misunderstanding of the role that customer engagement should play — many of these companies could simply be viewing engagement through the wrong lens… Customer engagement is not a one-off endeavor, nor is there a single button to push or a box to check to ensure success. Meaningful customer engagement requires that companies remain diligent, predictive and proactive”, reports a Forbes Insights and Pegasystems 2017 survey.1
What is customer engagement? While customer experience is defined as customers’ realities in selecting, getting, and using a solution that enables a capability they want2, customer engagement is an interaction that strengthens the emotional, psychological or physical investment a customer has in a brand.3
Customer engagement has many forms as one-to-one marketing (popularized by the 1994 book by Don Peppers & Martha Rogers by this name), customer relationship management, experiential marketing, customer touchpoint management, engagement marketing, customer lifecycle management, social media marketing, contextual marketing, real-time predictive analytics, micro-moment digital marketing, or customer-centric marketing.
What’s wrong with customer engagement today? In mainstream practice, customer engagement is often financially-centered rather than customer-centered: upselling, cross-selling, bundling, co-creating, remedying, enrolling as evangelists/promoters, PR-creating, wowing and dealing.
“Only 13% of marketers feel they are fully implementing customer revenue-producing strategies and engaging differently, including driving deeper relationships, collaborating across stakeholders and leveraging data to uncover new opportunities and options for engagement”, according to a 2018 CMO Council study.4
In best practice, customer engagement is all about strengthening the relationship between a brand and customers through mutual value, with the goal of maximizing customer lifetime value (cumulative profitability of a customer).
Why is customer-centric engagement so important? Customers have already paid fair market value for their transaction. They don’t owe you anything. They buy from numerous organizations in their combined business and personal dealings and there’s only so much mindshare to go around.
Delivering on a data-driven, customer-led, individualized, real-time experience is no longer a point of differentiation — it is the baseline of engagement that customers expect. And it is clear that many marketers believe that their organizations are struggling to meet this new foundational need. — CMO Council & RedPoint Global5
What does customer-centric mean?
- Customers are at the center of your thinking and doing.
- Customers’ well-being comes first in your decision-making criteria.
- You have confidence that your objectives and needs will be met primarily by serving customers’ well-being.
- You’re interested in nurturing a lasting relationship with each customer, over and above your other interests.
- Customer-centric means you understand your customers’ world well enough that you can stand in their shoes to see the end-to-end customer experience from their viewpoint.
- You minimize hassles and mismatches and constantly improve relevance and mutual value.
As discovered in the first article of this 6-part series, Customer-Centric Marketing: Step-Up Performance, less mature marketing and customer experience management “aims at the customer” to sell to them better, whereas more mature customer engagement “elevates the customer” by using their goals to serve them better. The latter emphasizes long-term interests of the customer and long-term relationship for sustained competitive advantage.
Instead of the traditional “push” model of marketing campaigns, engagement marketing pulls people in by telling stories, driving conversations, and addressing customer needs and interests. The goal is to involve customers in a deeper, more sustained relationship with a given product or brand. “The motto for engagement marketing is, ‘Ask not how you can sell, but how you can help.'” — Mohan Sawhney, Kellogg School6
What are customer engagement best practices? Leaders are differentiated more by their attitudes, motives, and connectivity internally and externally. Their tactics are deployed within this framework, elevating the impressions conveyed to customers, deepening the relationship, and yielding higher growth. Customer engagement leaders focus on helping customers meet their goals, and customers feel that their interests genuinely come first. Leaders listen intently to customers, trying to understand them in new ways, more holistically. Leaders manage customer engagement cross-functionally — they’re “silo-bridgers”, connecting channels, systems, data, metrics and interactions.
“Always be helping (ABH) is the new always be closing” was coined by Scott Albro, CEO of TOPO. I recommend that you take a look at how he elaborates on each of these 10 principles for applying “always be helping” to customer engagement:
- Understand how you can help your customers
- Deliver what your customers want
- Be authentic in your efforts to help
- Make it part of your sales and marketing culture
- Don’t ask for too much in return
- Focus on delivering information and expertise
- Decouple ABH from what you sell
- Create specific ABH programs and plays
- Provide employees with the training and tools they need to really help
- Tie your ABH efforts to business results
“Customer engagement leaders are 28% more likely to believe that organizational structure and workflows to support customer engagement make a difference, and have reorganized internally to get rid of silos and improve customer engagement” according to the Forbes Insights & Pegasystems study.1
“The majority (63%) of marketers plan to focus attention on applying knowledge about customers to reshape communications and engagements with customers. In addition, marketers plan to improve analytics capabilities in order to gain a more contextual understanding of the customer (55%), connect engagement systems across all touch-points — including those outside of marketing’s ownership (45%) — and will forge improved cross-functional partnerships to better align the strategy across all touch-points (35%). Leaders take a more long-term approach to measuring the business value of customer engagement, focusing more on overall retention or churn versus a one-time purchase.”1
Recommendations: Customers are providing our paychecks, budgets, and dividends. They’re the boss.
- Let’s ensure we’re fully understanding their realities and expectations, and constantly creating value for them in our customer engagement efforts.
- Let’s do it in ways that stick and increase organically.
- Let’s vow to always be helping our customers achieve their goals.
- Let’s empower them to help us meet our goals by being the stand-out company in our industry for ease-of-doing-business and seamless experience that strengthens the relationship.
The best customer engagement strategies build trust and mutual value. Ensure your marketing is centered on customers’ well-being from their perspective to maximize both immediate and long-term rewards.
1The New Rules of Customer Engagement: How Leading Companies are Connecting with Customers to Drive Greater Growth, Forbes Insights and Pegasystems, 2017.
2Customer Experience Definition, ClearAction Continuum.
3Wikipedia: Customer Engagement, quoting Richard Sedley, CEO of EY-Seren.
4Gaining Traction with Every Digital Interaction, CMO Council and SendWithUs, 2018.
5State of Engagement: Bridging the Customer Journey Across Every Last Mile, CMO Council and Redpoint Global, 2018.
65 Ways to Authentically Engage Your Customers, Kellogg Insight, April 4, 2016.
This article is third of a 6-part series as an exclusive CustomerThink Advisors column: How Customer-Centered Marketing Steps Up Your Performance & Influence.
1. Customer-Centric Marketing: Step-Up Performance
2. Customer-Centric Marketing: Align for Growth
Image licensed to ClearAction by Shutterstock.
Excellent article Lynn. While “selling more” is indeed the mantra of many companies, “serving better” can be a much better strategy in terms of boosting satisfaction ratings, engagement, and profits.
Hi Lynn: a couple of thoughts –
1) regarding #7, ‘decouple ABH from what you sell,’ I’m assuming what Albro means is partition the ‘helping’ (aka service or support) from the ‘closing’ (aka “can I have the order? . . . “) Yet, some companies have brilliantly mingled – if not embedded – the two so that selling and helping are both virtually indistinguishable, and mutually-reinforcing. Zappos, for example. I am unclear about the reasons for ‘decoupling.’ Did I make the right interpretation of his comment?
2) I think putting customers ‘at the center of your thinking and doing’ is a well-advised strategy, and long overdue in many companies. But the realist in me stops short of expecting or demanding that their “well-being comes first” in my decision-making criteria. To explain: It’s crucial that customer outcomes are considered in any corporate decision that affects them. But pragmatism and even the survival of the corporation means that customer well-being will not always remain unscathed – and it should never be given unbending priority.
Enacting a price increase is a case in point. Even when my customer is free to change vendors, a price increase often undermines their well being because it takes money from them for the purpose of augmenting my company’s profit, or at the very least, better covering my cost of sales. If I were genuinely driven to preserve my customers’ well being, wouldn’t I leave my prices as they are, or even reduce them, which could make them even better off? If my customer is in financial duress, what about just making my product free in order to help them out? The question is not intended to be facetious.
Anytime a business’s resources are finite – which is always – decision makers will face this conundrum. Of course, a counter-argument might be that by zealously protecting my company’s finances, I am being “customer-centric” because I will be in a better spot to help my customers in the future. While I agree with this point of view, it’s easy to see how muddy the always-put-customer-well-being-first waters can get. In practice, I’ve seen this edict – and those that are similar – get shoved aside because they simply aren’t workable in a decision context. Trade-offs always have to be made, and some of them don’t favor better outcomes for specific customers, or an entire population of them.
Regardless, I think your advice to put customer outcomes in the center of the ‘thinking and doing’ that affects them is a choice I’d like to see more companies make.
Thanks for your comments, Chris and Andrew. Here are my thoughts about the two points above. Essentially, it all boils down to your final line: put customer outcomes in the center of the ‘thinking and doing’ is what all types of organizations should be doing.
This is a quote from the article referenced with a 10-point Always Be Helping LIst (http://blog.topohq.com/why-always-be-helping-new-always-be-closing/)
“7. Decouple always be helping from what you sell
ABH isn’t just about helping customers buy your product. It’s actually about helping your customers achieve a certain result or level of satisfaction. As such, it’s important to not tie your ABH efforts too closely to the product or service you sell. Try to couple you’re ABH programs with your buyers’ priorities. For example, a stay at home mom thinking about buying a new car may not really want a car – she may just want a really safe, cost effective way to transport her two kids around all day.”
This quote clarifies both points in your comment, Andrew. Putting customer outcomes in the center of the ‘thinking and doing’ can open creative thinking about over-served, under-served, and other subsegments. Note that this article is aimed at Marketing (not Sales per se), and Marketing has a tremendous array of communication opportunities with pre-sale and post-sale customers. The quality of these communications helps or hinders Sales.
Creative thinking that’s more holistic / we-all-win rather than polar / zero-sum is what’s being advocated.
One of the keys is to identify your primary target market. This group of customers has a vested interest in your company’s ability to serve their needs for the long-term. When choices about customer-centricity get muddy because of the pricing conundrum mentioned in your comment, it seems the offended customer is not actually part of the primary target market. Or most likely there is a lot of mis-alignment between the target market’s priorities and what actually is happening in Operations and other upstream functional areas, causing unnecessary waste and costs that necessitate an ill-advised price increase. This in itself represents an opportunity and responsibility of Marketing to influence the rest of the company in getting in-sync to minimize such conundrums.
These synchronization opportunities of influence by Marketing are discussed in the 2 prior articles of this customer-centric marketing series:
Customer-Centric Marketing: Step-Up Performance
Customer-Centric Marketing: Align for Growth
Contextual thinking is a success factor for “the future of work”. Customer experience excellence is a managerial context similar to budgetary and supervisory stewardship as managerial contexts for all decisions. The more we learn to look for the bigger picture of what every situation is about, the more contextual our thinking becomes, i.e. holistic, systemic, healthy.
The numerous studies quoted in this article underscore the urgency for departing from business-as-usual in putting customer outcomes in the center of the ‘thinking and doing’.
Ahhhh. Herein lies the rub. If ABH is a marketing priority decoupled from the sales culture – and more importantly, the sales pay-incentive system – the sales rep will kick the marketer hard in the shins every time that marketer recommends to the customer anything other than buying from the company. I’ve seen it happen, literally. “By recommending an [alternate solution B] to my customer, you just crushed my sale.” The marketer responds, quite appropriately, “Hey! I’m just doing my job!” Both are right. Under the supposition of “good intent,” senior management put conflicting goals into place.
That problem is painfully common in organizations. Marketing sees their job as helping customers, whereas Sales is rated and compensated on revenue produced. And unlike Marketing, the consequence for salespeople failing to reach revenue objectives is draconian: lose your job. It doesn’t have to work like that, but most sales organizations see themselves as “revenue driven,” and with that come the mechanisms to ensure sales goals are met. Unfortunately, that culture doesn’t readily harmonize with Always Be Helping.
Decoupling the ABH from Sales raises the risk of poor Marketing-Sales alignment.
Great point, Andrew, There must be Radio City Rockettes level alignment between Sales and Marketing. They both should be putting customers at the center of decision-making. My point was that the article itself is part of a Customer-Centric Marketing article series (context), hence aimed primarily at a Marketing audience, not to say that the principles only apply to them. In fact, my company has developed the ClearAction Value Exchange specifically to help Marketing and CX teams sync with internal and external stakeholders and bridge silos of all kinds, including the scenarios you’ve pointed out. Thanks again for bringing these typical stumbling blocks to light in our discussion.