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Home » Customer, Featured

The two drivers of customer engagement

Submitted by on Thursday, 14 October 2010No Comment

High levels of customer engagement is something every company wants – who wouldn’t? – yet how to achieve it remains a mystery to many.

Talent Technologies has simplified customer engagement into three measurable behaviours. Customer Say – or advocacy; Customer Stay – or loyalty; and Customer Spend.

Few companies target the behaviour they would like their customers to have, thinking that Customer Spend somehow magically also achieves Customer Stay and Customer Say.

In this article we look at the importance of customer behaviours and why companies cannot afford to ignore Customer Engagement when building their brand.

Customers are tuning out

Peter Drucker wrote that the objective of a business is ‘to make and keep a customer’. Yet, in spite of the most advanced techniques being used by companies ever to achieve these goals, customers are becoming increasingly jaded and left disenchanted by their so-called brand experiences. Why?

The answer can be found in the second part of Drucker’s statement. Companies may be throwing more money than ever before at customers in an effort to make them, yet when it comes to keeping them, in most cases they fail abysmally.

Customer Experience Training Thailand

Time and time again, customers are only too ready to defect when faced with a better price, promotion or product feature from a competitor. They are, in other words, disengaged.

Making a customer is often down to what we call in marketing the ‘Customer Value Proposition’, while keeping a customer is down to the ‘Customer Experience’.

We look at the impact of both of these drivers on customer engagement:

Driver #1: The Customer Value Proposition

Most companies see this happening and respond to the ‘fickle’ nature of consumers by scrambling to ‘offer a better deal’ in order to win them over from competitors, or to keep them loyal.

So supermarkets offer so-called ‘loyalty cards’, banks give points for credit card use, and hotels offer special deals on room rates.

Yet with many of these businesses, a large number of consumers are bored and even disillusioned with the need to switch providers constantly. It’s not the deal that entices them, but the poor level of service, experience or relationship that drives them away.

The tactics companies use ironically make customers more disloyal. Companies are unwittingly evoking the very behaviours they are trying to avoid – yet they blithely continue to do so, at huge cost not only to their customer engagement levels, but also their bottom lines!

Driver # 2: The Customer Experience

Thankfully, research that makes the case for building an outstanding customer experience a business priority is in. This research tells us that Customer Experience is more highly rated by almost all consumers than the Customer Value Proposition.

We pick up on just two studies in this growing body of evidence that companies avoid at their own peril:

The Marketing Forum in the UK conducted a landmark study into the brand-person relationship, and in almost every category (categories including industries such as financial, automative, media and retail), emotional factors trumped rational ones.

In another huge multi-year study conducted by Tuck Business School  in America, of eateries in metropolitan New York, the old adage that success was down to the three factors of ‘location, location, location’, was well and truly torpedoed. Location was only a small factor in price differential between the different establishments. The price variance between each eatery was accounted for as follows:

  • Location                                        2.5%
  • Quality of food                          3.5%
  • Customer Experience            73%

(n=1,700 restaurants)

In other words, establishments that evoked high levels of Customer Stay and Say through their customer experience were the ones that were most profitable!

What you can do now

If you would like to gain this kind of pricing power through your company’s customer engagement levels, then you may be interested in our Customer Engagement and Customer Experience solutions, or contact us for more details  following the link below.

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