What does Customer Engagement Really Mean?

We’re now firmly in the last quarter of the year and many firms will be busy thinking about strategy and budgets for next year. Amongst all of the planning and strategy making, how to improve customer service, customer engagement and customer experience are likely to be playing a large part in many of the discussions.

Now, customer service and overall customer experience is pretty easy to understand. At least, it’s pretty straight forward to gauge what is good, what is not so good and what needs to be improved.

But, what about customer engagement? What does it mean to improve a company’s level of engagement with its customers?

Well, if you ask a number of different people about what customer engagement means you’re likely to get a number of definitions with most of them centering on developing ongoing and loyal relationships.

That’s great.

But, if you look a little closer at what’s actually being done to achieve this then it gets a little troubling. The reason is that many, if not most, of the customer engagement tactics and strategies that are being employed are directly and only focused on encouraging customers to spend more and spend more frequently.

That’s fair enough, you might say.

But, is that the best way to build ongoing and loyal relationships?

Real, lasting and durable relationships aren’t just transactional but are much more complicated and contextual than that.

As a result, I believe, customer engagement is an area where many companies have an opportunity to differentiate themselves by thinking critically and more creatively about what engagement is and could mean for them and their customers.

Consider what these brands have done and the impact their initiatives have had on their relationships with their customers:

• Ryanair implemented a series of improvements to its customer experience that would, in the words of their CEO, help them stop p***ing off their customers, but wouldn’t threaten their cost leadership position. Doing so has helped them drive record profits and passenger numbers.
• Carhartt has implemented technology that connects customers with their advocates, thus giving them access to ‘trusted advice’ when researching and then making a purchase. Doing so has led to a 6-10 fold increase in their conversion rates over other self-service customers and a 10-25% increase in the average order value.
• Gravity Payments’ CEO Dan Price implemented a new minimum salary of $70,000 for all employees, in large part to promote employee engagement, productivity and emotional well-being. However, six months after the initiative, leads per month had grown from 30 to 2,000 inquiries per month, the firm had received 1,000s of new job applicants, profits have doubled, employee retention has soared and client retention grew from its already high base of 91% to 95% (the industry average client retention rate is 68%).
• Swisscom is combining innovative technology and some of their existing customers to crowdsource their ‘in-field’ customer service. Doing so has helped them deflect calls, reduce the number of support requests in many of their traditional customer service channels, increase their overall customer satisfaction and generate additional sales.

These are just some examples of firms that are thinking differently about how they can improve the relationships they have with their customers. And, they are doing so by focusing on helping and/or doing things that matter to their customers.

When it comes to customer engagement, it’s no longer good enough to just think about the monetary value of the relationships that we have with customers and how we can increase spend and frequency of spend. To stand out, firms need to go deeper, be braver and think differently if they are to develop the sort of relationships with their customers that they want.

For many, that will be a challenge. But, for others, it will be an opportunity.