The Gap in Customer Engagement

Late post from the Forrester Marketing Forum Conference I attended a couple weeks ago. The topic was “Customer Engagement”, which is heralded by many publications as the new marketing buzzword. I love buzzwords…they get buzz! Which gets people talking, which gets people trying things, which causes failures, which creates learning, which (hopefully) creates better companies. I digress.

The primary research and paper behind customer engagement was conducted by Brian Haven, who’s a great Forrester Analyst. I’ve known him for years and spoken in his workshops on Social networking and UGC. I’m a big believer in the idea of customer engagement. But I have 2 cents to add on where customer engagement comes from and where the gap is in achieving this goal in organizations.

The conference was a balance of ideas to measure customer engagement, with tools, principles and experiences that result in more engaged customers.  During the show I posted to Facebook “Customer Engagement is a more measured way of defining Customer Experience”. Said another way, Customer Engagement is an outcome…and outcomes (as well as inputs) are measurable. There are a lot of metrics that can point to engaged customers. I don’t think the absolute figures of these measures matter as much as trending to understand if you’re winning or losing customer engagement.

But what is a point of customer engagement worth in revenue, margin or saved costs?

Some of the metrics for customer engagement – such as time on site, Net Promoter, or Brand awareness -- could track to the P&L. But customer engagement (as an outcome) doesn’t directly map. And each of these measures that could lead you to your engagement performance are messily managed across multiple company functions (silos).

The  language of a company – especially executives -- is the P&L (revenue, margin, costs). I’m not saying that should be the only language – I think great companies are “multi-lingual” – but most companies are run by finances because their outcome is shareholder value. The closest measures to shareholder value is the P&L, and the measures closest to the P&L are what gets attention. Unfortunately, these aren’t typically aren’t customer engagement metrics. (Sales, by the way, is a lagging indicator and can be masked by promotions).

Most decisions in companies are largely influenced from the CFO office, from the forecast to the budget, which drives investments and actions. Right now the argument to invest in accretive engagement programs are not as crystallized enough to overcome corporate mono-lingualism. Let’s make up an example, take your web site. You could re-design your site could cost as little as $100,000, or you could create a compelling, memorable, word-of-mouth-worthy experience for $500,000. The CFO will ask you to take the revenue plan up to cover those costs…by next quarter!  That’s not a comfortable bet for you to make. However, Steve Jobs spent a billion to create the iPod.

Strategy is reflected in the allocation of resources. Is the foundation of your investment strategy based on customer engagement? And how much is enough? Typically, it’s the design-oriented CEO that steps in and drives the organization to pay attention to customer experience and develop process and metrics to keep it on track. Did Steve spend too much on designing the iPod?

Customer engagement, which can be indicated by a series of existing metrics, starts as a cultural value and principles. The ultimate unmeasurable measure is the the level of appreciation and action your organization will take to create a superior customer experiences in everything you do. That is determined by culture. And culture by the CEO and senior executives.

Then, it needs to be holistically managed across the functions. There need to be ‘beacons’ throughout the organization to identify gaps in customer experience, and drops in metrics that are tied to customer engagement. As Four Seasons does, the corporate culture needs to appreciate the ‘glitches’ in the experience and give the power and investment to rectify them.

Succeeding today does require customer engagement. Therefore the responsibility is actually on the board of directors to appreciate new things out of tomorrow’s CEOs. CEO should mean “Customer Executive Officer” because tomorrow’s CEOs will need to be masters of customer experience, customer management, customer service, and a customer-centric culture are required to attract their future customers (i.e. shareholder value!).

Therefore I couldn’t help but walk away from the conference thinking the companies that create great experiences -- and therefore great customer engagement -- are driven by their core.  Apple, Dyson, Harley Davidson, USAA, Ritz, Four Seasons, Costco, Disney…they all have (and had) intrinsic appreciation (and therefore execution) towards experience and design. And many of the above examples are multi-lingual, balancing operational and financial rigor with an appreciation (i.e. investment) in customer engagement strategies.

I write this as I sit on an American Airlines flight from London, looking at my poor neighbor’s arm rest that just fell off. We may have got off the gate in time, but my guess is the flight attendants didn’t track this glitch. Tsssk, Tsssk.

Comments

[EH]

You can engage your customers even with your emails or other online marketing tactics by using things such as surveys, polls, contests, etc.