The rise of customer engagement
Customer engagement has become a buzzword among marketing professionals. Within only a few years, this term has experienced a meteoric rise, from being virtually non-existent to omnipresent, with Google spitting out more than 10 Millions of search hits by now. Major business consultancies have picked up on this term and a growing number of conferences, webinars, and think tanks are organized around this topic. Nowadays, it is almost a truism that customer engagement is a key to successful business in the digital age.
What is customer engagement and why does it matter?
While definitions abound, the essence of customer engagement boils down to the interactions between a customer and a brand. Put differently, it is the outcome of customers’ psychological involvement with a brand that enhances their voluntary contributions to a company for a mutual benefit. Examples of customer engagement include recommendations and referrals, suggestions for service improvements, posting content on social media, writing reviews, rating dishes, sharing a company’s website, blogging about a product, and many more.
The higher customer engagement, the deeper the bond between a brand and a customer is and the more the customers are willing to contribute to the company’s success. It’s like having a hardcore fan base that not only supports its team during home matches but goes the extra mile to enhance the visibility of team and attract more supporters by developing choreographies, creating fan pages, and attracting new fan club members.
Customer experience & customer engagement in the digital age
Customer engagement is the result of an outstanding customer experience. Simply put, when customers have the feelings that are getting more out of a business, they give more back to it. And today’s savvy consumers want a lot more than just a good product experience. In fact, as Millennial gradually replace the Baby Boomers as the largest consumer segment, customer expectations change dramatically. Millennial form the first true generation of digital natives and digital technology is part of their identity. They demand a digital experience from a brand and they look out for validation from their peer group on social networks before purchasing a product – product experience is a social experience for digital natives. Furthermore, savvy consumers want to have a say in the creation of a product, they want to be involved and are enthusiastic to give feedback and share their views with a company. They consider every interaction with a brand, be it face-to-face interactions in a store, online customer service, visiting the brand’s Facebook page, as part of their overall relationship with a company. In the digital age, customers first and foremost want to be engaged and this expectation extends beyond pure transactions.
Experience rewards & customer engagement
This new form of customer expectations disrupts the traditional way of customer relationship management. Because savvy consumers want to interact with a company beyond just pulling out the wallet, non-transactional rewards become essential for promoting customer engagement in the digital age. Long gone are the days when consumers were happy to carry a punch card around and whip it every time they buy a coffee. Indeed, according to a recent study in the US, 83% of surveyed consumers stated they are motivated by cash incentives other than product purchases, such as talking about a brand on social media or subscribing to a newsletter and 84% said they would spend more with retailers that offer points for activities other than spending.[1]
Because shopping is a journey to savvy consumers, rewards should not only tackle the actual transaction but also incentivize them in the pre-transaction and post-transaction phase in order to create an overall shopping experience. By rewarding non-transactional activities, such as liking a brand or sharing a link, companies have the great chance to create an intimate customer relationship, learn about customer preferences that otherwise remain hidden, and deliver messages that hit the audience’s nerves. Non-transactional rewards thus not only keep the customers engaged but also open up access to valuable customer data.
To sum up: as customer expectations have undergone dramatic changes in the course of digitization, businesses need to reach out to customers beyond pure monetary transactions. They need to create an overall customers experience that gets customers excited in order to be successful in the long run.
You are not yet convinced? On the next blog, we will cover the benefits of customer engagement in detail.
Source: [1] COLLOQUY Loyalty Talks 2014. Https://www.colloquy.com/resources/pdf/magazines/20140527-mag.pdf.