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MAKING THE CONNECTION BETWEEN SUCCESS AND CUSTOMER ENGAGEMENT
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Brand Republic Insight introduction In a world where people and their tech are closer than ever and social is ‘always on’, understanding how to engage customers is central to marketing mastery. Brand conversations are always happening, so it’s never been more important for successful marketing strategies to recognise this – and play an increasingly active role in what customers are experiencing, feeling, sharing and talking about with the brand. Markets are flooded by choice, time is a precious commodity and customers expect more and more in exchange for their loyalty. To avoid getting lost in the crowd and capitalise on the wealth of opportunities, exceptional customer engagement needs to be right at the top of the marketing and communication agenda.
Indicia introduction As a leading customer engagement agency thirsty for future insight, we have teamed up with Brand Republic and together, we’ve been working hard to help demystify this particular route to marketing success. One size certainly doesn’t fit all; we know that each brand is unique. We’ve identified key steps to developing tailored strategies that can create productive customer interactions, helping to keep your brand in customers’ minds for all the right reasons. Based on exclusive industry-wide surveys and illuminating statistics, we’re pleased to present this report that summarises how brands are currently defining their customer engagement strategies – and offer suggestions for how you can improve your own.
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EXECUTIVE SUMMARY
73%
2%
73% of marketers view customer centricity as critical to the success of their business and role at the company1.
A 2% increase in customer retention has the same effect as decreasing costs by 10%2 .
23%
Customers who are fully engaged represent 23% premium in terms of share of wallet, profitability, revenue, and relationship growth3.
Customers that are highly engaged spend more and share their positive experiences. Some will become
[GRAPHIC – Q14 [GRAPHIC / Q15 /– jobQ14 titles / Q15 (as word / job titles cloud)] (as word cloud)] advocates, promoting a brand to their peers.
But, today’s tech savvy customers are increasingly distracted and have growing expectations. They follow different and diverse models of authority, such as millennials engaging with brands on YouTube via their favourite content makers. To reveal how brands were approaching customer engagement, Brand Republic Insight and Indicia surveyed over 225 decision-making marketers. Respondents were from a range of backgrounds.
Decision making marketers company size
Decision making marketers B2B or B2C?
Both
251-1000+ 251-1000+ 32.74%
32.74%
1-250 67.26%
1-250 67.26%
B2C B2C
21.68% Both
21.68%
38.05% 38.05%
B2B B2B
40.27%
40.27%
The report will look at where brands currently are, where they want to be and the obstacles to making this transition. Plus, to help fine tune your strategy, actionable solutions and case studies that demonstrate customer engagement excellence.
1 http://returnonbehavior.com/2010/10/50-facts-about-customer-experience-for-2011/ 2 http://businessjournal.gallup.com/content/172637/why-customer-engagement-matters.aspx 3 Forrester Wave Customer Service Solutions 2014
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PUTTING CUSTOMER ENGAGEMENT AT THE HEART OF IT ALL 77% of respondents acknowledged customer engagement is important to their organisation. Brands or their products and services do not alone engage customers. It is no longer sufficient to just market passively or respond to queries reactively, the customer engagement model has evolved. It is now complex, requiring timeliness and relevance. It is about building genuine relationships. Moving beyond bottom-line KPIs or vanity metrics, customer engagement can be measured on diverse areas of influence. The survey respondents indicated how they felt their organisation was performing at a number of these touchpoints. [GRAPHIC: Q1]
How important does your organisation consider customer engagement, in terms of the interaction of consumers with each other, your company or brand?
“ The majority of businesses are unable to support an omni-channel customer journey.� 4
4 Forrester Wave Customer Service Solutions 2014
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Making the connection between success and customer engagement
Not important we do not prioritise or see the benefits
1.33%
Somewhat important delivers useful insights
21.68%
Very important vital to success
76.99%
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How well [GRAPHIC: Q4] do you think your organisation is doing in the following areas
regarding customer engagement? With 1 being poorly and 5 being very well. 9.73%
10.18%
8.41%
6.64%
8.41%
9.73%
15.49%
16.81% 15.04% 32.74%
28.76%
25.22%
28.32%
28.76%
38.50%
31.86% 40.27%
28.32%
37.17%
30.53% 31.86%
35.40%
34.51% 31.86%
27.88%
37.17%
26.11% 22.12%
18.58%
24.34%
22.12% 12.39%
9.73% 7.52%
4.42%
10.18%
9.29%
4.87%
Emotional engagement
Rational engagement
Organic engagement
(i.e. building customer empathy towards your brand)
(i.e. developing sound or logical reasons for customers to engage)
(i.e. customers using your product/service without being prompted)
Creating advocates
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1
6.64%
5.75%
4.42%
Retaining customers
Encouraging impulse purchases
20.35%
15.04%
20.35%
Encouraging long-term brand investment
Maximising volume of engagement
6.19%
Maximising quality of engagement (e.g. bespoke/ tailored)
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4
5
Content, its distribution method and the ‘dialogue’ that it is part of will guide how engagement influences customers. It is offered by brands, and chosen by the consumer. Emotional engagement:
Rational engagement:
build customer empathy towards your brand
Creating advocates:
Retaining customers:
develop powerful earned content through brand super-fans
add value to your current customer base, it costs 5 times more to acquire a new customer than it does to keep an old one 5
Encouraging long term brand investment:
Maximising volume of engagement:
Maximising quality of engagement:
non-impulsive purchases, such as holiday bookings or high-value items can take months or years to cultivate a brand-customer relationship
a strong share of voice is often needed to cut through the social and digital noise; however, brands must avoid becoming a nuisance
consumers increasingly demand tailored content and if useful, will value it over generic marketing messages
5 http://www.destinationcrm.com/Articles/Web-Exclusives/Viewpoints/Listen-to-the-Voice-of-the-Customer-53239.aspx
5
Organic engagement:
develop sound or logical reasons for customers to use your product/service
Making the connection between success and customer engagement
customers using your products/services without a prompt
Encouraging an impulse purchase: a call to action, discount or exclusive offer can motivate snap purchase decisions
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Today’s consumers are more brand agnostic than ever before, necessitating an agile engagement strategy that can adapt to the changing landscape and market needs. This creates an opportunity for brands to attract new customers or those that have moved away. Respondents were asked about their business-goals for pursuing customer engagement. What are your main motivations for pursuing a customer engagement strategy?
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THE IMPORTANCE OF PERSONALISATION – RIGHT TIME, RIGHT PLACE, RIGHT MESSAGE Engagement needs to be ‘always on’; whenever a customer wants to interact with a brand they should be able to. When a brand engages a customer, consider: ■■ Time of day – where will the customer be? ■■ State of mind – what will they likely be doing?
73.45%
60.62%
It is good practice in itself to help and respect customers
Can directly lead to conversions and increased cart size
77.88%
44.69%
Increases the likelihood of repeat business and customer retention
Enables the capture of useful customer data and behaviours
36.28%
25.22%
Reduces complaints
Reduces the strain on help centres by addressing issues early
73.01%
57.96%
Improve brand reputation
Delivers valuable feedback and customer opinions
71.24%
55.31%
Helps develop word of mouth and brand advocates
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It's now necessary - we'd lose out to competitors if we didn't
Making the connection between success and customer engagement
■■ Tailored – make it relevant, whether based
on customer data or other insight (such as geolocation or weather) As Google calls the ‘Zero Moment of Truth’, brands need to be forever nudging people towards conversion and ensuring that a ‘call to action’ is present to make this step.
Price point or quality of product and service are no longer the only arbiters to determine a consumer’s purchase decision. Consumers look to brands that they relate to. Brands can develop loyalty through being useful. This includes being readily available, creating positive userexperiences, such as smooth purchase journeys, and solving a consumer need. This extends to what consumers believe in and want to buy into. This might be the ethical status of a brand or the values that it espouses. Only to ‘market for profit’ or to direct leads and sales is outmoded, as brands are shifting the value that is attached to their promotional messages. Marketing that demonstrates a brand’s integrity, processes, ethos, history or identity is on the up. Whether this type of promotion is a good in and of itself or just another strategy to seek profit is debateable, but in today’s saturated marketplace it is a powerful way to resonate with consumers.
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HOW TO ENGAGE – THE PLATFORMS AND CHANNELS Quality over quantity is the route to engagement, but content needs to be seen. Every marketer knows that they need to be on social, sending email blasts or leveraging data, but the challenge is in how these platforms are exploited. Different demographics engage with platforms in unique ways. The respondents to the survey indicated the platforms that they were currently using to influence across the consumer purchase funnel.
“ Fish where the fishes are”
What channels are you currently using to engage with customers – and what are the main objectives?
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Create awareness
Generate interest
Create an action (sale/enquiry)
Promote advocacy
Not being used
Email newsletters
24.34%
24.78%
31.86%
8.85%
10.18%
Direct mail (offline)
9.73%
14.16%
29.20%
2.65%
44.25%
34.51%
27.88%
6.64%
10.18%
20.80%
35.84%
31.86%
6.64%
9.29%
16.37%
30.97%
21.68%
11.50%
8.41%
27.43%
Telesales
4.87%
4.87%
41.59%
3.10%
45.58%
Community forums
11.50%
14.16%
7.96%
11.06%
55.31%
In-store or sales promotional activity
8.85%
7.52%
23.01%
2.65%
57.96%
Website
24.78%
28.76%
38.50%
4.87%
3.10%
Online live help (e.g. chat box)
5.31%
6.64%
12.83%
2.21%
73.01%
TV adverts
16.37%
2.65%
7.96%
0.44%
72.57%
App(s)
7.52%
11.95%
15.93%
3.98%
60.62%
Face to Face
8.85%
14.16%
47.35%
11.95%
17.70%
Outdoor
18.58%
9.29%
7.08%
0.44%
64.60%
Press
37.61%
22.57%
10.62%
0.88%
28.32%
Inserts
12.39%
13.72%
15.49%
0.88%
57.52%
Events
26.55%
19.03%
24.34%
10.62%
19.47%
Customer Service
8.85%
8.85%
30.53%
30.09%
21.68%
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The survey then looked to how often these platforms were being utilised. How regularly do you engage with customers through the following channels? Constant/ always on
Triggered or automated
Regularly scheduled (weekly, monthly, seasonal, etc)
Depends on other activity or promotions
Reactive - only when customers engage with us
Not being used
Email newsletters
13.72%
7.96%
52.21%
15.93%
2.21%
7.96%
Direct mail (offline)
3.10%
5.31%
15.49%
32.30%
3.10%
40.71%
42.04%
1.33%
22.57%
10.62%
3.54%
19.91%
46.90%
4.87%
18.14%
12.39%
3.10%
14.60%
28.76%
4.42%
18.14%
13.72%
5.31%
29.65%
Telesales
23.01%
3.54%
10.62%
14.60%
3.10%
45.13%
Community forums
11.06%
3.54%
10.62%
17.26%
5.31%
52.21%
In-store or sales promotional activity
13.27%
1.33%
8.85%
18.58%
0.44%
57.52%
Website
66.37%
4.87%
12.39%
5.75%
6.64%
3.98%
Online live help (e.g. chat box)
12.83%
3.54%
3.98%
3.98%
5.75%
69.91%
TV adverts
3.54%
0.44%
13.27%
12.39%
0.88%
69.47%
App(s)
15.04%
5.75%
5.75%
6.64%
3.54%
63.27%
Face to Face
34.07%
3.98%
17.26%
19.47%
4.42%
20.80%
Outdoor
3.10%
3.98%
12.83%
17.26%
1.33%
61.50%
Press
9.29%
3.54%
23.89%
31.86%
2.65%
28.76%
Inserts
2.65%
3.10%
15.04%
20.80%
1.77%
56.64%
Events
5.75%
3.54%
36.28%
35.40%
2.65%
16.37%
Customer Service
53.54%
5.75%
8.41%
5.75%
8.41%
18.14%
It is no secret there are a myriad of options available to engage customers. The onus on brands, however, is to put the customer first. What would improve their experience? If a customer is on Twitter, at 8am, it is likely that they will be on their mobile or tablet during a morning commute. Content therefore should be appropriate, perhaps a short video or article. But, they will not have time or the ability to properly consume dense content or something graphicheavy. Also, if they are on Twitter, it is a great opportunity to make the engagement reciprocal.
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“A customer is 4 times more likely to buy from a competitor if the problem is service related vs. price or product related .” 6
Gamification and customer engagement Forrester reported that only 14% of US businesses considered their loyalty programmes as having customer experience as an objective .7 Loyalty programmes are a way to gamify the customer engagement mix. A recent report found that gamification can increase customer activity by an average of 68% and social sharing jumps by 22%8. As such, this is an effective way to nurture brand advocates. Gamification is not just about increasing engagement or ‘having fun’. It can also be used to educate customers, for example through virtual tours, quizzes or challenges.
Telefonica’s Social Media Response Team (SMRT)9 Started from a position of thinking about customer needs – both functional and psychology. This meant taking part in content where customers were, not just products but what they really enjoy. For example, gigs, rugby, free coffee, and so on. These were tied into benefits as part of the O2 package, but communicated on social platforms and encouraged customers to share. Content falls into three categories.
Enthuse > Inform > Service All led by social media managers (or SMRT Team), who organically and authentically engage with customer activity. They would send service related enquiries to a technical support team, whilst simultaneously informing customers of new products and enthusing them with offers and ‘banter’. The result was a marketing success, produced brand advocates and reduced call centre loads.
6 http://www.bain.com/publications/business-insights/loyalty.aspx 7 The State of Loyalty Programs 2013, Forrester 8 http://www.gamification.co/2013/03/28/gigya-boosts-content-discovery/ 9 Brand Republic Insight webinar, 3rd July 2014, Paul Fabretti
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The endgame of selecting the right platform and distributing content is to develop excellent customer engagement. The survey respondents indicated how their brands are currently interacting with customers.
What best describes your relationship with your customers at the moment?
Passive
respond and interact only when needed
Intimate
regular 2-way dialogue, engagement and interaction with customers
7.96% Reactive
17.26%
engage with customers to follow up queries and requests
17.70%
25.22% Assertive
positive encouragement of 2-way dialogue with customers
31.86%
Accessible
provide opportunities for engaging with customers
The way in which a brand responds needs to be predicated on what the customer wants. The challenge is in identifying whether the approach chosen is working.
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HOW CAN WE GAUGE SUCCESS? Customer engagement merits detailed KPIs throughout the purchase funnel. The survey revealed how brands were using their engagement strategy to drive both bottom-line and soft KPIs. How important would your organisation consider the following KPIs for judging the success of any strategy that engages with customers?
Q7]
Reduction in complaints
Increased sales/leads
Very important Positive customer feedback
Reduction in call centre enquiries
Important Not very important Not relevant
Constructive customer feedback
Positive brand opinion
Web traffic and engagement
Social sentiment
Social advocacy
Email opens and click-through rate
There is impact throughout an organisation, creating an opportunity for cross-departmental metrics. As the Telefonica example illustrated, their social customer engagement strategy focused on direct service enquiries, promotions, nurturing advocates, reducing call centre load, customer acquisition and retention. Each aspect requires measurement to determine success. The deployment of specific KPIs for given campaigns, in conjunction with a test and test again approach is the starting point for developing a standout customer engagement strategy.
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GROWTH AND CHALLENGES As engagement platforms develop, especially with the advent of wearables and geolocation, more brands are prioritising their related strategies. Channels currently being used vs. Plan to increase using in next 12 months
8 with Q2 – “more” vs. “N/A”]
USE MORE NO PLANS TO INCREASE 54.42%
Email newsletters 14.60%
47.35%
10.18% Direct mail (offline)
59.29%
20.80%
Twitter 49.12%
16.37%
LinkedIn 25.22%
In-store or sales promotional activity Website
27.43% 10.62% 27.88% 46.02%
45.58%
Community forums
21.68% 71.68%
27.43% Telesales
26.99%
44.25%
Online live help (e.g. chat box)
73.01%
TV adverts
72.57%
Face to Face
60.62% 17.70%
Outdoor
32.30%
64.60%
Press 11.50%
40.71%
Events
41.59%
Customer Service
57.96%
3.10%
App(s)
17.26%
55.31%
28.32%
Inserts
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57.52% 19.47% 21.68%
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There are nonetheless challenges to growth, as respondents revealed. How much would the following obstacles restrict the development of your customer engagement strategy? With 1 being “little or no issue” and 5 being “a very big issue.” Cost to implement new strategy/technology 9.73%
17.26%
28.32%
25.66%
19.03%
Cost to maintain and run new strategy/technology 5.75%
17.70%
32.74%
27.43%
16.37%
Expertise 11.95%
21.68%
30.97%
22.12%
13.27%
Fear of getting it wrong 19.91%
32.30%
27.43%
11.50%
8.85%
Fear of negative engagement resulting 15.93%
35.84%
24.78%
16.81%
6.64%
Lack of time to implement 7.96%
17.26%
24.78%
30.09%
19.91%
Lack of time to maintain and run 16.37%
7.52%
26.99%
32.74%
16.37%
Not sure what strategy or tools to implement next 15.04%
27.88%
28.76%
19.91%
8.41%
Cannot justify the business case or identify KPIs 19.47%
1
26.11%
24.34%
2
3
13 Making the connection between success and customer engagement
19.91%
4
10.18%
5
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What outcomes does your brand want its customer engagement strategy to deliver?
In particular, cost, lack of expertise, time constraints andQ10] identifying [GRAPHIC: KPIs were identified as obstacles to furthering customer engagement practices. The value of customer engagement excellence moves from cost savings to opening new revenue opportunities. As such, hard-KPIs such as revenue can be deployed.
Create positive sentiment amongst consumers
81.86%
Develop brand loyalty in terms of sales
82.30%
Facilitate customer help or support
34.96%
Discover examples of products/ services being used positively
34.51%
Testimonials for future advertising/promotion
As with specific KPIs, each campaign can be targeted. With a focus on personalisation and quality of engagement, a subset or customer demographic can be selected as a pilot.
57.52%
Statistical information for future advertising/promotion
47.35%
Communicating the purpose or identity of the brand
64.60%
Creating a rich or tailored experience aligned with advertising campaigns
44.25%
Feedback or opinions to further develop product/services
Respondents noted the areas that their strategies are currently hitting their brand’s KPIs.
41.15%
Customer data
54.87%
Research for future products/services
46.02%
Understanding competitor products/services from a consumer perspective Other
40.71% 1.33%
[GRAPHIC: Q11]
NURTURING BRAND ADVOCATES 120
How does your organisation actively encourage people to become advocates and/or reward them for their efforts?
104 100
93
91
80
58
60 40
45
43
52
30 19
20
3
0 Community forums
Incentives, such as giveaways or discounts
Prize draws or competitions
Reciprocal engagement – e.g. retweeting
Leader boards
Premium logins on website or forums
Chart shows number of respondents who are undertaking each activity
14 Making the connection between success and customer engagement
Loyalty programmes
Commission on sales
We do not actively endeavour to create brand advocates
Other
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TAKEAWAYS Customer engagement should never be seen as a bolt-on or a separate entity – are you going to be undertaking holistic activity that informs and enhances all areas of the business? Will you be using your data to unearth deeper insights and encourage customer interaction, helping to add relevancy and building trust? Everything needs to start with the customer’s needs – is there disconnect between your brand’s delivery and its assessment of a good experience? Are you using channels that are already facilitating effective 2-way connections between brands and customers? What content will engage your audience, and how should it be distributed to ensure it resonates with them? Have you set cross-department KPIs that capture specific stages in the consumer purchase funnel? With this in mind, what areas will you prioritise for growth?
WE’D LOVE TO SAY HELLO Indicia are a leading customer engagement agency. Creative, digital, direct and social – we take customer intelligence and transform it through insight. For ideas on how to put your customers and their needs at the forefront of your engagement activity (or simply to discuss any elements of this report), please get in touch. We’d love to say hello. Steve Manser – Head of Marketing and Brand
Email: steve.manser@indicia.com Phone: 0117 934 0722
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