4th Annual Online Customer Engagement Report 2010 by Richard Sedley

4th Annual Online Customer Engagement Survey

Report 2010

4th Annual Online Customer Engagement Survey

Report 2010

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010

Econsultancy’s reports, events, online resources and training help an international community of more than 80,000 digital marketers make better decisions, build business cases, find the best suppliers, look smart in meetings and accelerate their careers. Econsultancy, which has offices in London and New York, is an award-winning online publisher of reports covering best practice, user experience benchmarking, market data, trends and innovation, and supplier selection. Econsultancy is an invaluable resource for internet professionals who want practical advice on all aspects of e-business. Econsultancy also operates a highly popular training division, used by some of the world’s most prominent brands for staff education, both in-house and via public courses. Econsultancy provides training across all areas of digital marketing and at all levels from one-day courses to an MSc in Digital Marketing. In addition, Econsultancy hosts more than 100 conferences and events a year, including the Online Marketing Masterclasses, the annual Future of Digital Marketing Conference,

the Peer Summit, roundtables, briefings and a range of social events. Econsultancy also runs the prestigious Innovation Awards where pioneering work carried out in the world of digital marketing and e-commerce is judged by an international panel of experts from companies themselves known for innovation. The Econsultancy site now attracts 175,000 unique users per month where they access research, read the blog and take part in discussions in the forums. And as a portal to the digital marketing community, Econsultancy members can also link up with other members and digital suppliers through the directories, as well as find a new job or new digital talent using the job listings. Some of Econsultancy’s members include: Google, Yahoo, Dell, BBC, BT, Shell, Vodafone, Yell.com, Oxfam, Virgin Atlantic, Barclays, Carphone Warehouse, IPC Media, Deloitte, T-Mobile and Estée Lauder. Join Econsultancy today to learn what’s happening in digital marketing – and what works. Call us to find out more on +44 (0)20 7269 1450 (London) or +1 212 699 3626 (New York). You can also contact us online. www.econsultancy.com

cScape is an award-winning, full service digital agency that ranked number 14 in NMA’s design and build 2009 top 100 poll. Based in the UK but operating internationally, cScape is part of the AIM-listed cScape Group Limited which has over 110 staff. We offer digital marketing/ customer engagement campaign strategy, planning, management and training (including social media governance); graphic design and rich media services including app development and video, and technical health checks/build (intranet, extranet, website and mobile) for customers such as Aviva, Sony, Barclays, the British Council, ExxonMobil, Tesco, Carbon Trust and the Chartered Institute of Personnel and Development. We practice what we preach in terms of engaging our own clients, many of whom have retained cScape to help them with their digital marketing for many years. So what made these customers choose us? The main reason cited is our unique blend of strategic, technical and creative services, combined with our ability to draw on multi-disciplined engagement experts from around the globe. Our Customer Engagement Unit (CEU) counts Dr Dave Chaffey, recognised by the Chartered Institute of Marketing (CIM) as one of the 50 marketing ‘gurus’ worldwide that have shaped digital marketing, and Richard Sedley, the

CIM’s Course Director for Social Media, as part of its exceptionally qualified team. We’ve won multiple awards for our information architecture, user experience and creative work. In addition, cScape is technically strong across the board, with particular expertise in Microsoft SharePoint technologies, holding Gold Partner status with a Microsoft Most Valuable Professional as our Chief Technical Officer. We’ve an exciting programme of events planned for 2010 and hope you will be able to join us. For more information about these events, cScape’s CEU and other services contact Theresa Clifford: t.clifford@cscape. com. Find out more about cScape: www.cscape.com www.customer-engagement.net Follow us on Twitter: @cscape @cscapeCEU Join the debate: www.customer-engagement-network.com

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010

4 3th Annual Online Customer Engagement Report 2010 Introduction

Comments on the findings

Executive summary and highlights

Andy Beal

Methodology and sample

Ron Shevlin, Monica Hart

Findings

Dr Dave Chaffey

Rob Killick, BJ Cook, Guy Stephens

Customer engagement strategy

Linus Gregoriadis

BJ Fogg

Adam Hibbert, Amanda Davie

Theresa Clifford, Paul Blunden

Jay Cooper

Jim Sterne, Pete Mortensen

Rich Wand, Bruno Ancona Lopes

Eric T. Peterson

Hugh Gage, Janet Grimes

Martha Russell, Ian Jindal

Clare O’Brien, David Dodd

Marc Sibley, Aurélie Pols

Zia Zareem-Slade, Steven Woods

Stéphane Hamel, Lucy Conlan

Becky Caroll, Richard Sedley

Survey partners

Importance of customer engagement to the organisation

Interest in online customer engagement

Attributes of an engaged customer

Success of customer engagement strategy

Tactics, behaviours and attitudes

Improving customer engagement

Investment to drive increased customer engagement

Changing behaviour and attitudes

Enterprise 2.0

Adoption of technology for product development and innovation

Adoption of technology for internal (employee) communications

Adoption of technology for customer service improvement

Resourcing social media and customer engagement

Barriers to cultivating customer engagement

Mobile

Investing in the mobile channel

Mobile and customer engagement strategy

Using mobile marketing to build engagement

Barriers to a more focused approach to mobile

Mapping and measurement

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010

The definition of customer engagement:

Repeated interactions that strengthen the emotional, psychological or physical investment a customer has in a brand (product or company).

Introduction Welcome to the 2010 Online Customer Engagement Survey Report. Now in its fourth year, this annual report has become a regular benchmark for organisations wanting to assess their customer engagement strategies. With over 1,000 participants the survey continues to be the largest of its type anywhere in the world. Indeed this year the survey gained the largest number of non-UK participants in its history. The number of you who consider customer engagement ‘essential’ to your organisation continues to grow slightly, but what I feel this year’s survey reveals best is the extent to which the last 12 months have changed how we will do business in the future. In many ways this was to be expected. The world has just experienced the toughest economic environment since the 1930s and any company not looking to change the way they operate is likely to be suffering the consequences already. But how to change and into what, have been the hardest questions for most organisations.

Predictably the big ‘winners’ in this report are social media and micro-blogging tools like Twitter. These are the technologies that companies see as worthy of increased attention and financial investment. If 2009 was the year that saw the main-streaming of many of these social technologies, then 2010 will be the year that social technologies get serious. This will manifest itself not only in terms of marketing investment, but also in the way they begin to impact the internal structure and culture of organisations both large and small. The reorganisation required to take advantage of these social technologies should not be underestimated. It is worth recognising that the introduction of these tools is unprecedented. Technologies like fax, email and the telephone had all first established themselves (and their associated behaviours) within business before making their way into society as a whole. Today we are seeing the reverse as enterprises struggle to adjust and embrace the pre-established attitudes and behaviours of customers and employees while trying to bring these social tools ‘in-house’. This year we’ve added a new section to the report entitled Enterprise 2.0. This touches on issues of product development and innovation,

Organisations to need focus on quality, simplicity and customer service in the next 12 months.

customer service and employee engagement, all areas of increasing importance to customer engagement.

So it is slightly surprising that the number of companies planning to step into mobile customer engagement is not larger.

If I were to make any recommendations based on the results in this year’s report it would be that organisations need to focus on quality, simplicity and customer service in the next 12 months. These are three key areas that can foster an understanding of value and emotional connection within the customer.

More than any other channel, mobile has the ability to connect emotionally with us. The mobile phone is omnipresent and highly personal – I spend more time with mine than I do my family. This poses both challenges and opportunities in equal measure. While 2010 appears to be the year when many more organisations are preparing to get their toes wet with mobile, it appears most are waiting for someone else to start swimming. If that’s you, you’ll probably have a healthy lead by the time the others dive in.

Since the conception of this survey we have stressed the importance of an emotional connection as part of engagement – our definition has it at it’s heart (see above) – and this has never been more important than today. Indeed ‘strengthening emotional investment in your brand’ showed the biggest year on year increase of all the reasons why organisations are interested in customer engagement. Underlying much of this year’s results is an expressed desire to get closer to our customers, to understand them better and to become a more integral part of their lives.

What the 4th Annual Online Customer Engagement Report reveals to me is that we find ourselves firmly placed in an interregnum – a period between the close of one era of business and the opening of another. This isn’t something created by the current troubled economy but what our economic woes have done is focus our attention on the changes happening. While customer engagement is no panacea for a troubled economy, or changes within the

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010

business environment, what it does offer is grounding – an opportunity to stabilise and reap the benefits of increased predictability in our customer relationships. As I wrote back in 2006 in the introduction to the first of these surveys; ‘customer engagement is the best measure of current and future performance; an engaged relationship is probably the only guarantee for a return on your organisation’s or your clients’ objectives’. There are many interesting observations and insight within this report, probably more than any previous report we have produced. I really do hope you find it useful and stimulating, and look forward to any feedback you care to share.

It just remains for me to thank all those who’ve continued to help make this a successful report. To all those who took the time to complete this, the longest survey to date, we salute you. Thanks to Linus and Aliya at Econsultancy – great job guys. To our partners who promoted the survey around the globe, particularly Bruno. To our report contributors – over 30 experts this year – thanks for sharing your time and intellect. And finally to my colleagues at cScape: Monica, Theresa, Sal, Sarah A and Rob.

Richard Sedley cScape Customer Engagement Director

“With the latest set of results we can see the clear, common benefits that engagement can offer” Dr Dave Chaffey, p17

E: r.sedley@cscape.com T: @richardsedley

Executive summary and highlights

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010

Executive summary and highlights This is our fourth annual Customer Engagement Report. There were more than 1,000 respondents to our research request, which took the form of an online survey sent out in October 2009.

This is a summary of the key findings: Customer engagement strategy • The proportion of company respondents who regard customer engagement as essential for their organisation has increased to 55%, up from 52% in 2008 and 50% in 2007. The number of agency respondents who regard this as essential for their clients has jumped significantly from 43% to 55%. • Customer engagement is seen as being about creating relationships which result in value both for customers and for companies. Company respondents are most likely to indicate that increasing long term customer value (37%) and increasing value delivered to the customer (35%) describe their interest in customer engagement most appropriately. • The biggest area of increased interest since last year is in strengthening emotional investment in your brand. The percentage of respondents saying their interest in customer engagement relates to this has jumped from 25% last year to 31%. • Compared to last year, respondents report increased participation in online communities or support groups (+9%), giving regular feedback (+8%) and participation in innovation and design (+7%). Marketers are benefiting more from the relationship-building aspects of customer engagement rather than being exclusively focused on the more directly financial benefits such as sales. Tactics, behaviour and attitudes • As was the case last year, email newsletters are the tactic most likely to have resulted in a tangible improvement to an organisation’s online customer engagement. Two thirds of respondents (67%) indicate that regular email bulletins have had a positive effect, down very slightly from 69% a year ago.

• The tactics which have come to the forefront for driving customer engagement are social networking and Twitter activity. Presence on social networks has almost doubled from 23% to 44%, while the percentage of respondents saying that micro-blogging (i.e. Twitter) has tangibly improved customer engagement has, remarkably, gone up five-fold (from 7% to 35%). • The majority of companies (61%) say that they will increase investment in their social network presence and 44% will spend more on micro-blogging. • Intolerance of poor customer service is the type of behaviour or attitude that company respondents are most likely to expect to increase over the next year. Well over half of respondents (61%) say that they expect people to become less tolerant about poor service, and this percentage has almost doubled since last year. Enterprise 2.0 • Just over a third of organisations (36%) say they are using social networks and email newsletters for product development and innovation but only a quarter (25%) of companies tap into user ratings and feedback. Even fewer (17%) are using discussion forums to feed into development. • Many companies are also neglecting to share information internally. Very small percentages of respondents are using employee blogging (17%), internal social networking tools (13%), intranets (10%) or social knowledge sharing (8%) to help drive development and innovation. • Email newsletters and internal social networking are used by around a third of companies (32%) for internal communications. • The increased profile of social media is also reflected by the fact that a third (34%) of companies have increased their social media budget in the last 12 months. • Companies who urge their staff to engage with social media are still very much in the minority. Some 29% say senior staff members are urged to use social media to build customer dialogue, while a fifth (19%) say this applies to junior staff.

• Only 17% have processes and workflows in place to encourage staff use of social media, and only 13% actually incentivise staff to use social media to engage with customers online. Mobile • A large proportion (41%) of companies are not planning any investment at all in the mobile channel in 2010, and a further 49% are planning only limited investment. Only 11% are planning to invest significantly but this increases significantly for the largest companies. • When it comes to building customer engagement, companies have been quickest to use the mobile channel for increased dialogue with customers. A fifth of company respondents say they are doing this and a further 36% say they plan to do this. • A third (34%) of companies are planning to create applications for mobile phones, in addition to the 16% who say they already do this. • Nearly two thirds of companies (62%) have no plans for mobile commerce. Only 10% of companies are using transactional mobile activity to build customer engagement. A further 28% are planning to do this. • Companies who are either using or planning to use mobile as part of their customer lifecycle marketing, for broader CRM, for usergenerated content or location-based marketing are also in the minority. • Companies generally attribute their inertia when it comes to integrating mobile to a lack of resources (51%), although there are other widely cited reasons including lack of skills/experience/ understanding and lack of business case. Mapping and measurement • Web analytics play a pivotal role in gathering intelligence, with over half of companies surveyed (51%) saying this is useful for online engagement. • Despite the growing awareness around social media metrics and measurement, only a fifth of companies (21%) say buzz monitoring is useful for engaging customers online.

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010

“Mobile is a healthy media, yielding good results for those who know how to use it.” Jay Cooper, p29

Methodology and sample

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010

Methodology and sample Methodology

Figure 1

This is our fourth annual Customer Engagement Report. Over 1,000 respondents took part in an online survey conducted over a five week period from October 2009*.

Base – all respondents (1198)

Econsultancy and cScape promoted the survey via Twitter, Linkedin, Email newsletters and other channels. The incentive for taking part was access to a complimentary copy of the report just before its publication on Econsultancy.

In total, 401 company respondents took part in the survey, compared to 657 agency participants. Company respondents were asked to comment in respect of their own *

Clicktools was used for the survey.

Fina

Part of an in-house team (client-side) 33%

Ret

External agency / supplier / consultant 55%

Pub

Other 12%

Trav

Tele

Cha

10 20

Financial services: 16%

Ent

Retail: 10%

Figure 2

What is your annual company turnover?

Respondent profiles

For the purposes of this report, we have carried out separate analysis for both these groups and the distinction is abbreviated to ‘companies’ (including not-for-profit organisations) and ‘agencies’.

All respondents: In which business sector is your organisation?

33% of respondents are client-side, while 55% are agency-side.

cScape and Econsultancy would like to thank those who took the time to complete the questionnaire. If you have any questions about the research, please email Econsultancy’s Research Director, Linus Gregoriadis (Linus@ econsultancy.com).

The vast majority of survey respondents work either for in-house teams (i.e. client-side organisations), or for external agencies (including consultants and technology suppliers). A third (33%) of respondents work client-side, while just over half (55%) are agency-side.

Figure 3

Which of the following best describes your job role?

42%

Companies

Agencies

27% 18%

14%

28%

18%

18% 9%

< £1m

10%

10%7% 7%

3% £1-10m

< £1m

£10-50m £50-150m 5>150m

£1-10m

£10-50m £50-150m 0

Oth

Entertainment: 4%

10 0

28%

27%

Con

Charity: 6%

Pro

Public Sector: 4%

Travel: 7%

20 30

Telecoms / Mobile phones: 6%

50 42%

Pub

Publishing: 8%

Consultancy / Marketing Services: 4% Financial services: 16%

Other manufacturing: 3%

Retail: 10%

Property: 2%

Publishing: 8%

Healthcare: 2%

Travel: 7%

Automotive: 1%

Telecoms / Mobile phones: 6%

FMCG / CPG: 1%

Charity: 6%

Gaming: 0%

Entertainment: 4%

Pharmaceuticals: 0%

Public Sector: 4%

Utilities / Energy: 0%

Aut

FMC

Gam

Pha

Util

Consultancy / Marketing Services: 4%

>150m

Other manufacturing: 3% Property: 2% Healthcare: 2% Automotive: 1%

Hea

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010

Figure 4

organisations, while agencies were typically asked to comment in terms of a typical client.

Annual company turnover Figure 2 shows the range in the size of participating organisations, as defined by company turnover. Approximately a third of respondents (32%) work for companies with annual revenues of £10 million or less. Over half of companies (56%) taking part have a turnover of more than £10 million, of which more than a quarter of respondents (28%) work for companies with a turnover in excess of £150 million. Agency respondents typically work for smaller organisations. Some 42% of responding agencies have a turnover below £1 million.

Business sector Respondents are spread across numerous business sectors or verticals, reflecting the universal importance of customer engagement. The best represented sectors are financial services (16%), retail (10%), publishing (8%) and travel (7%).

Business focus The majority of companies in this survey (52%) are B2C-focused businesses, whilst 58% of agencies have a B2C focus. Just under a third of companies (31%) and a fifth of agencies (20%) have a B2B focus.

Figure 5

Company: In which country are you (personally) based?

What types of business have you focused on in the last 12 months? 58%

Respondents are spread across numerous business sectors or verticals, reflecting the universal importance of customer engagement.

52% 58%

UK 71%

Companies

Europe (outside UK) 6%

Agencies

North America 9%

Companies

52%

Other 13%

Agencies

40 40

30 30

20 20

31% 31%

22% 18%22%

20% 20%

18%

Figure 6 Mainly MainlyB2B B2B

MainlyB2C B2C Mainly

Both Both B2BB2B and and equally B2CB2C equally

Agency: In which country are you (personally) based? UK 51%

Geography The majority of respondents (71%) in this survey are UK-based, but this is very much a global survey. Some 9% of respondents are located in North America, and 6% are based in mainland Europe. ‘Other’ countries or regions represented include Brazil, India, Australia, and South-East Asia. Half of the agency respondents are based in the UK (51%), with a higher proportion of respondents (29%) coming from the US, Europe and beyond.

Europe (outside UK) 11% North America 10% Other 29%

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010

Findings

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010

Findings Customer engagement strategy

Interest in online customer engagement

Importance of customer engagement The proportion of company respondents who regard customer engagement as essential for their organisations has increased to 55%, up from 52% in 2009 and 50% in 2008. More striking is the significant jump (from 43% to 55%) in the number of agency respondents who regard this as essential for their clients. This jump may be because companies are doing a better job of communicating its importance to their agencies.

The biggest shift since last year is the emphasis placed on strengthening emotional investment in your brand.

Figure 7

Company: How important is customer engagement to your organisation? 100 80 60 40 20 0

2010

2008

Essential 2010 2009 2008

55% 52% 50%

2009

Important 33% 35% 41%

2008

Nice-to-have 11% 11% 8%

As was the case last year, it is clear that customer engagement is seen as being about creating relationships which result in value both for customers and for organisations. Company respondents are most likely to indicate that increasing long-term customer value (37%) and increasing value delivered to the customer (35%) describe their interest in customer engagement most appropriately. The biggest shift since last year is the emphasis placed on strengthening emotional investment in your brand. The percentage of respondents highlighting this factor has jumped from 25% last year to 31%. Fewer respondents (18% compared to 21% last year) see reduced acquisition costs as something which defines their interest in customer engagement. Since the recession took hold, companies have been much more focused on customer retention, rather than on acquisition. According to agencies, the most significant factor driving client interest in customer engagement is gaining customer insight, mentioned by a third (34%) of respondents. Agencies also report an increased focus (+9%) on strengthening emotional investment.

Figure 8

Company: Which of the following best describes your organisation’s interest in online customer engagement? 40

Increasing long-term Increasing long-term customercustomer value: 37% value:

Increasing value delivered to the customer: Increasing value delivered to the35% customer:

30 25

Deepening and enriching your product or service offering: 3

Strengthening emotional investment in your brand: 31%

Gaining customer insight: 29%

Increasing market share: 26% Gaining customer insight:

10 5

10 0

35%

Deepening and enriching your product or service offering: 31%

37%

29%

Enhanced public profile: 22%

Increasing market share: 26%

Reducing acquisition costs: 18%

Enhanced public profile: 22%

Reduced customer service costs: 16%

Reducing acquisition costs: Increasing short-term conversions: 15%18% Adjusting to thecustomer increased importance/power of customer: 9% Reduced service costs: 16% Improving business predictability: 6%

Increasing short-term conversions: 15%

Improving employee satisfaction: 5%

Adjusting to the increased importance/power of customer: 9

Insulating against a troubled economy: 1%

Improving business predictability: 6%

Figure 9

Improving employee satisfaction: 5%

Agency: Which of the following best describes your clients’ interest in online customer Insulating against a troubled economy: 1% engagement? 35 30

Increasing long-term Increasing long-term customercustomer value: 30% value:

Increasing value delivered to the customer: Increasing value delivered to the30% customer:

Supply-side respondents have also seen more interest driven by the increased importance Not Essential Important Nice-to-have important Not 10 important and power The proportion1% of 55% 2010 33%of the customer. 11% 1% agency 35% respondents who11% say this is a primary 2009 52% 1% 5 1% driver of41% interest has increased from 11% last 2008 50% 8% 1% 1% year to 20%. 0

Deepening and enriching your product or service offering: 21

Strengthening emotional investment in your brand: 31%

30%

Deepening and enriching your product or service offering: 21%

25 20

30%

15 10 5 0

Gaining customer insight: 34%

Increasing market share: 24% Gaining customer insight:

34%

Enhanced public profile: 22%

Increasing market share: 24%

Reducing acquisition costs: 18%

Enhanced public profile: 22%

Reduced customer service costs: 16%

Reducing acquisition costs: Increasing short-term conversions: 23%18% Adjusting to thecustomer increased importance/power of customer: 21% Reduced service costs: 16% Improving business predictability: 6%

Increasing short-term conversions: 23%

Improving employee satisfaction: 5%

Adjusting to the increased importance/power of customer: 2

Insulating against a troubled economy: 5%

Improving business predictability: 6% Improving employee satisfaction: 5% Insulating against a troubled economy: 5%

COMMENT

Figure 10

Andy Beal

Company: Interest in online customer engagement – difference between 2010 and 2009 results 6

Increasing long-term Increasing long-term customercustomer value: -1% value:

Increasing value delivered to the customer: Increasing value delivered to the1%customer:

Deepening and enriching your product or service offering: 2%

Deepening and enriching your product or service offering: 2% Strengthening emotional investment in your brand: 6%

Gaining customer insight: 0%

Increasing market share: 1% Gaining customer insight:

Enhanced public profile: 2%

Reducing acquisition costs: -3%

-1

Strengthening emotional investment in your brand: 6%

-1%

-1 -2 -3

Increasing market share: 1% Enhanced public profile: 2%

Reduced customer service costs: -2%

Reducing acquisition costs: Increasing short-term conversions: -1%-3% Adjusting to thecustomer increased importance/power of customer: -1% Reduced service costs: -2% Improving business predictability: 0%

Increasing short-term conversions: -1%

-2

Improving employee satisfaction: -1%

Adjusting to the increased importance/power of customer: -1%

Insulating against a troubled economy: 0%

Since the recession took Figure 11 Improving employee satisfaction: -1% hold, companies Agency: Interest in online customer engagement – difference between 2010 have been much Insulating against a troubled economy: 0% and 2009 results more focused on customer retention, 10 10 Increasing long-term Increasing long-term customercustomer value: -2% value: -2% rather than on Increasing value delivered to the customer: 8 Increasing value delivered to the2%customer: 2% acquisition. 8 -3

6 4

Improving business predictability: 0%

Deepening and enriching your product or service offering: -1%

Strengthening emotional investment in your brand: 9%

Gaining customer insight: 2%

Increasing market share: -5% Gaining customer insight:

Enhanced public profile: -3%

Increasing market share: -5%

-2

Reduced customer service costs: -3%

-4

Reducing acquisition costs: Increasing short-term conversions: -3%-3%

-2 -6

-4 -6

Reducing acquisition costs: -3%

Enhanced public profile: -3%

Adjusting to thecustomer increased importance/power of customer: 9% Reduced service costs: -3% Improving business predictability: -2%

Increasing short-term conversions: -3%

Improving employee satisfaction: 1%

Adjusting to the increased importance/power of customer: 9%

Insulating against a troubled economy: -1%

Twitter and Facebook steal the spotlight from email The 2nd Customer Engagement Survey saw businesses focusing their efforts on using email newsletters to improve customer engagement. An incredible 69% of companies stated that they had measured a tangible improvement through their e-newsletter campaigns so it was not a surprise that 59% planned to invest heavily in email marketing by the time we came to the third survey. By contrast, investment in social networks – such as Facebook – was down on the list of priorities with only 36% of companies planning to increase their investment in that area. So, what happened now we are on survey four and looking at 2010? Those that took a chance and invested in social networks saw a big return on investment. For companies, email newsletters still rated as the tactic offering the highest tangible improvement (67%) but a whopping 44% – almost double the percentage from 2009 – have discovered that social networks helped increase their online customer engagement. That return on investment has clearly caught the attention of both companies and their agencies. In 2010, the survey predicts that 61% of company executives will be

increasing their focus on social networks, while agencies are even more bullish, expecting their clients to spend more on social networking (66%) than even email newsletters (41%). Perhaps the most stunning statistic is the percentage of companies that plan to invest in Twitter as a channel for customer engagement. In last year’s report, Twitter barely registered with survey participants with just 7% of companies realizing improved customer engagement from Twitter, hence only 13% planned to invest in Twitter in 2009. What a difference a year makes! Twitter has seen massive growth and companies are scrambling to make the micro-blogging channel a key part of their customer engagement efforts. In fact, with 35% of companies seeing an improvement in their customer engagement from Twitter in 2009, almost 44% of companies plan to increase their investment in Twitter in 2010. That’s a three-fold improvement over last year! What conclusions can we draw from this? Well, it’s apparent that companies are realising that customers expect engagement to be a two-way dialogue. Email newsletters are a great way to keep customers updated but they don’t really engage them. Instead, companies are seeing measurable benefits of actually having a conversation with their customers be it via Facebook, Twitter or whatever, making them willing to invest more of their marketing/PR budgets to reap the fruits of that engagement. Andy is the CEO of Trackur, a powerful, yet affordable, social media monitoring solution. With over 10 years of internet marketing experience, Andy specialises in online reputation management and is the co-author of Radically Transparent.

Improving business predictability: -2% Improving employee satisfaction: 1% Insulating against a troubled economy: -1%

COMMENT

The message is clear; engaging customers around the world is key and it is not just about translating copy. Ron Shevlin

Words of wisdom from Monty Python

Email’s reign is over? It’s reign over what?

In an article titled ‘Why Email No Longer Rules’, the Wall Street Journal recently opined that “email has had a good run as king of communications. But its reign is over. In its place, a new generation of services is starting to take hold – services like Twitter and Facebook and countless others vying for a piece of the new world.” Email’s reign is over? It’s reign over what? Over inane, mindless, useless, idiotic, timewasting messages like ‘thx’, or ‘k’, and ‘got it’? The results of the 2010 Customer Engagement Survey recall the words of Monty Python from their movie Monty Python and the Holy Grail. In the scene where someone is walking through the town crying “bring out your dead!,” one man resists: “I’m not dead yet.” And neither is email. While growth has been slower this year than last, email newsletters still reign as the most commonly used agencies and client tool for product development/ innovation, employee communications and customer support improvement. What the Wall Street Journal failed to recognise is that the rise of social networks

like Twitter and Facebook strengthens the role of email from a both a personal and business perspective. With alternative means of communicating, email can – and should – be used for the messages that are most appropriate to the channel. The range of tools used for customer and employee engagement prove that the critical task for marketers in the next few years will be one of ‘right channelling’ – determining which are the right messages for each of the many channels (and tools) marketers have to communicate through.

The critical task for marketers in the next few years will be one of ‘right channelling’ In addition, the results of this year’s survey demonstrate that marketers must take a broad, multi-channel view of customer engagement. Simply focusing on time spent viewing ads or web pages will mean that we will miss the other behaviours and dimensions that characterise strong customer relationships. Ron is a senior analyst at Aite Group, LLC. He specialises in retail banking issues including sales and marketing technologies, customer and marketing analytics, loyalty management, P2P lending, personal financial management, social computing, online banking, customer experience and consumer behaviour. Aite Group is a leading independent research and advisory firm focused on business, technology and regulatory issues and their impact on the financial services industry.

Monica Hart

It’s a big virtual world Although this year’s Customer Engagement Survey is internationally focused, it’s interesting to count the number of references to ‘Facebook’ and ‘Twitter’ from contributors. The key to engagement lies in relevance to the consumer. In many places, including geographies with GDPs that are growing as quickly as social network usage such as China, the major US and UK social networks barely capture market share. Believe it or not, Facebook and Twitter do not rule the world. And if you are doing business with an international audience, you won’t either unless you think about cultural and linguistic specifics when planning your engagement campaigns. One size most certainly does not fit all. I cut my marketing teeth arguing with colleagues in North America about the relevance of content to other markets (or lack of it). This lack of awareness still exists in this online age, a fact that is highly ironic given that over one third of the North American audience belongs to an ethnic group. However, while many international marketing gaffs do emanate from the world’s leading economy, some of the most heinous cultural errors slip from countries such as France where marketers can actually be fined for not

behaving like good international citizens. For example, Citroen recently ran an online advert in Spain showing Mao, which was extensively (often negatively) blogged about and was pulled down due to Chinese disapproval (China being a big potential market for Citroen). Japan, a nation where relationships are key to business, has also committed expensive cross-cultural marketing faux pas, ironically in North America. Panasonic’s US “Touch Woody – The Internet Pecker” campaign for a new PC received the wrong kind of publicity and had to be withdrawn when the ‘Touch Woody’s Pecker’ slogan spread virally. The message is clear; engaging customers around the world is key and it is not just about translating copy. Campaigns must embrace the social nuance of separate markets. This means including the use of appropriate channels – for example, vkontakte.ru, smortri.ru, moikrug. ru and liverjournal.ru instead of Facebook in Russia (currently the world’s largest user of social networks) and mobile for geographies like Africa where PC usage is comparatively low. Culturally tailored, sensitive imagery and rich media, appropriate inter-personal communications and the right jargon or slang all help as well. You may argue that it all takes extra resource (something the survey highlights as an issue) but just ask yourself if you can really afford not to engage the tremendous buying power of the non-English speakers who will drive nearly 70% of the world’s economy in 2010? Monica is an Account Director at cScape, She has over 20 years of marketing experience working with companies such as Sony, Aviva, BAA, Adobe, Logica, William Grant & Sons and Getty Images.

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010

Attributes of an engaged customer As with last year’s Customer Engagement Report, we asked which attributes of an engaged customer organsations had benefited from in the past 12 months. The type of behaviour which is most likely to have helped responding organisations is still the recommendation of product, service or brand. However, the proportion of companies who have seen benefits from this has decreased from 58% last year to 42%. There has been an even bigger drop (from 44% to 23%) in the percentage of customers who say that engaged customers convert more readily. Similarly, purchased more readily is down 14% from 36% last year to 22%. The behaviour which has become more prevalent is around participation in online communities or support groups (+9%), giving regular feedback (+8%) and participation in innovation and design (+7%). Recommendation of products, customer conversion and sales remain as important as ever to businesses, but marketers are benefiting more from the relationshipbuilding aspects of customer engagement rather than the more direct, financial benefits. The recession may have had an impact on the number of customers recommending and buying products or services, but this trend also reflects a shift in the perception of what customer engagement is about.

Figure 12

Figure 13

Company: Which of the following attributes of an engaged customer has your organisation benefited from most in the past 12 months? 50

Company: Attributes of an engaged customer – difference between 2010 and 2009 results

Recommended or Recommended product,product, service or service brand: 42%

10 brand: 42%

Participated in online or support Participated in communities online communities groups: 34%

or support 5

groups: 34%

Has improved feedback regularly: 30%

30 20

Less likely to switch supplier: 25%

Less likely to switch Converted more readily: 23%supplier: HasConverted purchased regularly: 22% more readily:

25%

-5

23%

-10 Participated in innovation and design: 20% Less reactive to troubled economy: 13% Less focused on price: 16%

More tolerant of mistakes: 9% Less focused on price:

-15

16%

Less reactive to troubled economy: 13%

-15

or support 10

Has improved feedback regularly: 29%

Less likely to switch supplier: 29%

Less likely to switch Converted more readily: 33%supplier: 29%

33%

-10

-10 Participated in innovation and design: 17%

-15

Participated in innovation and design: 17%

Has purchased regularly: 24%

* Respondents could check up to three options

-1%

Recommended service Recommended product,product, service or brand: -1%-1%

or brand:

Participated in online communities or Participated in online communities support groups: 11%

support groups: 11%

Has provided feedback regularly: 8%

feedback LessHas likelyprovided to switch supplier: -8%regularly: Converted more readily: -15%supplier: Less likely to switch

-8%

Has purchased regularly: -23%

Converted more readily: -15%

Participated in innovation and design: 6%

Less reactive to troubled economy: 7%

Has purchased regularly: -23%

Less focused on price: 5%

-20

in innovation and LessParticipated reactive to troubled economy: -1%

-25

More tolerant of mistakes: 7% Less focused on price:

-15

Less reactive to troubled economy: 7% More tolerant of mistakes: 11%

-5

More tolerant of mistakes: 11%23% Less focused on price:

5 0

Less focused on price: 23%

design: 7%

More tolerant of mistakes: 4%

Participated in online or support Participated in communities online communities groups: 32%

Has purchased regularly: -14%

Less reactive to troubled economy: 3%

HasConverted purchased regularly: 24% more readily:

Participated in innovation and design: 7%

Agency: Attributes of an engaged customer – difference between 2010 and 2009 results

Has improved feedback regularly: 29%

-5%

-25

-20

15 brand: 53%

Has purchased regularly: -14%

More tolerant of mistakes: 4% Less focused on price:

Recommended or Recommended product,product, service or service brand: 53%

Converted more readily: -21%supplier: Less likely to switch

in innovation and LessParticipated reactive to troubled economy: 3%

feedback LessHas likelyprovided to switch supplier: -5%regularly:

Figure 15

Agency: Which of the following attributes of an engaged customer do you feel your clients will have benefited from most in the past 12 months?

groups: 32%

support groups: 9%

Has provided feedback regularly: 8%

Less focused on price: -1%

-25

Figure 14

Participated in online communities or Participated in online communities support groups: 9%

-20

More tolerant of mistakes: 9%

or brand:

Converted more readily: -21%

Participated in innovation and design: 20%

Has purchased regularly: 22%

-10

Recommended service Recommended product,product, service or brand: -16% -16%

design: 6%

-20

Less reactive to troubled economy: -1%

-25

More tolerant of mistakes: 7%

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010

Tactics, behaviours and attitudes

Success of customer engagement strategy Encouragingly, almost three-quarters of responding organisations (71%) say that their customer engagement strategy has been either very successful (8%) or quite successful (63%). This compares to 28% of companies who say they have been not very successful or unsuccessful.

Presence on social networks has almost doubled from 23% to 44%

The supply-side results tell a similar story. The majority of respondents (61%) say their clients have been quite successful, which again suggests there is ample room for improvement.

Tactics for improving customer engagement As was the case last year, email newsletters are the tactic most likely to have resulted in a tangible improvement to their organisation’s online customer engagement. Two thirds of respondents (67%) indicate that regular email bulletins have had a positive effect, down very slightly from 69% a year ago. As we noted last year, well-established industry metrics for email marketing (such as open and click-through rates) mean that marketers can quantify and appreciate the impact of their efforts in this area.

Figure 16

Company: How successful has your organisation’s customer engagement strategy (or initiatives) been within the last 12 months? Very successful: 8% Quite successful: 63% Not very successful: 27% Unsuccessful: 1%

In a year when social media sites have rarely been out of the news, it is not surprising that the tactics which have come to the forefront for driving customer engagement are social networking and Twitter activity. After email newsletters, these tactics are now seen as having the biggest impact. Presence on social networks has almost doubled from 23% to 44%, while the percentage of respondents saying that micro-blogging (i.e. Twitter) has tangibly improved customer engagement has, remarkably, gone up five-fold (from 7% to 35%). Social networking sites have not suddenly appeared in the last 12 months but what has changed in that time is the appreciation by many businesses that social media activity represents an excellent opportunity for dialogue with customers and building relationships.

Figure 17

Company: Have any of the following resulted in a tangible improvement in your organisation’s online customer engagement? 80

newsletters: EmailEmail newsletters: 67%

Presence on social Presence onnetworks: social networks: On-site branded communities 44% On-site branded com 44% / forums: 11% Microblogging utilities: 35% / forums: 11% Rich on-page interactive Microblogging utilities: 35% On-site video (brand-created): experiences: 10% Rich on-page intera 33% On-site video (brand-created): On-site videoexperiences: (user-created): 10% Blogging: 32% 33% 10% On-site video (userFocused micro-sites: 27% Rich media advertising: 9% Blogging: 32% 10% User ratings and feedback: Mobile communications: 9% 23%Focused micro-sites: 27% Rich media advertis SMS service alerts: 9% User-generated content: User ratings and feedback: Mobile communica Desktop-based application 17% 23% and widgets: 7% Social knowledge sharing: SMS service alerts: 9 14%User-generated content: On-site audio: 5%

60 50

20 10

20 0

67%

17% widgets and Web-based badges: 11%

Personalised Personalised messaging on messa site: 11% site: 11%

app User on-pageDesktop-based customisation: 3% and widgets: 7%

Social knowledge sharing: 14%

Figure 18

On-site audio: 5%

User on-page custo Web-based widgets and Agency: Have any of the following resulted in a tangible improvement in your clients’ 3% badges: 11% online customer engagement?

60 50

60 50 40

40 30

30 20 10 0

20 10 0

Email newsletters: Email newsletters: 60%

60% Personalised messaging Personalised on messagin site: 19% site: 19% Presence on social Presence on networks: social networks: 51% On-site branded communities 51% On-site branded comm / forums: 17% Microblogging utilities: 39% / forums: 17% Microblogging utilities: 39% Rich on-page interactive On-site video (brand-created): experiences: 24% Rich on-page interactiv 39% On-site video (brand-created): On-site video experiences: (user-created): 24% Blogging: 39% 40% 12% On-site video (user-cre Focused micro-sites: 31% Rich media advertising: 18% Blogging: 40% 12% User ratings and feedback: Mobile communications: 17% Focused micro-sites: 31% 32% Rich media advertising SMS service alerts: 12% User-generated content: User ratings and feedback: 29% Desktop-basedMobile application communication 32% and widgets: 12% Social knowledge sharing: SMS service alerts: 12% 14% User-generated content: On-site audio: 5% 29% widgets and Web-based badges: 16%

Social knowledge sharing: 14% Web-based widgets and badges: 16%

applica User on-page Desktop-based customisation: 7% and widgets: 12% On-site audio: 5%

User on-page customis 7%

COMMENT

Figure 19

Dr Dave Chaffey

Company: Tangible improvements – difference between 2010 and 2009 results Social media activity represents an excellent opportunity for dialogue with customers and building relationships.

30 25 20

Email newsletters: Email newsletters: -2%

Presence Presence on social networks: on social 20%

20 15

5 0

-5

0 -10

-5 -10

Figure 20

-2%Personalised messaging Personalised messaging on on site: 1% site: 1% networks: On-site branded communities 20% On-site branded communities / forums: -4% Microblogging utilities: 29% / forums: -4% Microblogging utilities:Rich 29% on-page interactive On-site video (brand-created): experiences: -6% Rich on-page interactive 3% On-site video (brand-created): experiences: -6% Reviewing opportunities for On-site video (user-created): Blogging:3% 7% 6% On-site video (user-created): Focused micro-sites: -3% audience participation Rich media advertising: N/A Blogging: 7% 6% User ratings and feedback: Mobile communications: -1% In each of the four years of the cScapeFocused micro-sites: -3% -7% Rich media advertising: N/A SMS service alerts: -2% Econsultancy customer engagement surveys, User-generated content: and feedback: User ratings Mobile communications: -4% Desktop-based application I have-1% been struck by the diversity of aims -7% and widgets: 2% Social knowledge sharing: organisations in managing customer SMS service alerts:of -2% 5% On-site audio: -3% User-generated content: engagement. But with the latest set of results -4% Desktop-based application Web-based widgets and User on-page customisation: we can see the clear, common benefits that badges: 2% -4% and widgets: 2% Social knowledge sharing: engagement can offer. The survey also shows 5% On-site audio: -3%that these benefits are greatest where active Web-based widgets and

Agency: Tangible improvements – difference between 2010badges: and 2009 results 2%

audience or customer participation occurs. User on-page customisation: The three main types of participation are: -4% • Recommendations participation.

20 15

15 10 5

10 5 0 -5

0 -10

-5 -10

Email newsletters: Email newsletters: 0%

0%Personalised messaging Personalised messaging on of companies and 53% of agencies on 42% site: 1% site: 1% reported that recommendations of product, Presence Presence on social networks: on social networks: 21% On-site branded communities service or brand had been a benefit of 21% On-site branded communities / forums: 2% Microblogging utilities: 29% / forums: 2% engagement initiatives. It seems that many Microblogging utilities:Rich 29% on-page interactive On-site video (brand-created): customers love to participate! This is shown experiences: -6% Rich on-page interactive 9% On-site video (brand-created): experiences: -6% by the success of UK retailer Argos who On-site video (user-created): Blogging:9% 9% -1% received over two million customer reviews On-site video (user-created): Focused micro-sites: -2% in a post-Christmas email campaign run Rich media advertising: N/A Blogging: 9% -1% User ratings and feedback: earlier this year to prompt participation. Mobile communications: 1% Focused micro-sites: -2% -6% Rich media advertising: N/A SMS service alerts: -3% User-generated content: and feedback: • Community participation. User ratings Mobile communications: 1% -4% Desktop-based application 34% of companies and 32% of agencies -6% and widgets: 2% Social knowledge sharing: reported benefits from audience SMS service alerts: -3% 2% On-site audio: -2% User-generated content: participation in online communities or -4% Desktop-based application Web-based widgets and User on-page customisation: support. Only certain types of brand lend badges: -2% -4% and widgets: 2% Social knowledge sharing: 2% On-site audio: -2% Web-based widgets and badges: -2%

User on-page customisation: -4%

themselves well to communities on their own sites, but participation beyond your own site, for example through self-help support services like www.getsatisfaction.com should also be reviewed. • Feedback participation. 30% of companies and 29% of agencies said they received benefits from regular customer feedback, for example through satisfaction surveys, Net Promoter Score or product feedback (there is some overlap with the first category). More intriguingly, 20% of companies had seen benefits from customer participation in innovation and design. For me, this is one of the most exciting forms of online engagement – gaining direct feedback in a structured way through customer panels is tremendously powerful. I have compiled a list of some of the free and paid services that can be used for gaining direct feedback on website experiences at http://bit.ly/feedback-tools Benchmarking methods of achieving active participation within and beyond your sector can help you develop a participation strategy. Another aspect of participation strategy is to put in place measures which show the degree of participation. Dave is a member of the cScape Customer Engagement Unit specialising in digital channel strategy and analytics. For his work as an author and commentator, Dave has been recognised by the Chartered Institute of Marketing as one of 50 marketing ‘gurus’ worldwide who have shaped the future of marketing.

COMMENT

Communication comes in many forms, but the key thing to bear in mind moving forward is that planning and persistence are invaluable. COMMENT

Fortunately in the end most of us can only be manipulated up to a point. Experience tells us when something is not right. Good customer engagement has to go beyond trickery. It should encourage people to connect with and fully appreciate the product, but no amount of behavioural manipulation will make up for the weaknesses of something which is sub standard.

Rob Killick

Nudging – no substitute for quality Behavioural economics is the next big thing. The idea that we can be manipulated into spending and/or saving through the human equivalent of what Barbara Woodhouse used to do to dogs is now very much in fashion. Books like Nudge by Richard Thaler encourage the view that we are there to be manipulated into doing things rather than making our own rational decisions. What does this mean and why is it important for the way we think about engagement? Advertising has long worked on the principle that there are ways of appealing to an audience which hit our psychological sweet spots. Ever since Vance Packard’s Hidden Persuaders in the 1950s, debate has raged about how ethical such manipulation is. Businesses looking for competitive advantage will always try to present their products in the best light and make them as appealing as possible. There is no doubt that many of us can be flattered into thinking that we can look like the supermodel if we wear the same clothes as her, or be a babe magnet if we drive a fast car.

Rob is CEO of cScape. He is author of the blog UK After The Recession which deals with how the UK can develop a dynamic economy once again. http://postrecession.wordpress.com

BJ Cook

Experience tells us when something is not right. Good customer engagement has to go beyond trickery.

The four Cs of customer engagement The latest Annual Customer Engagement Study showed that only 17% of organisations have processes and workflow to encourage staff to use social media. For the 83% of organisations that do not have these processes and workflows in place, here is a solid foundation for you to build from. I call it the four Cs of Customer Engagement – culture, community, communication and co-development. Let’s start with culture. Any senior manager knows that internal customers, e.g. your staff

are the nervous system of your organisation. In an economy where people are more cost‑conscious, focused on quality products and the security of their jobs, organisations cannot afford to play Big Brother with their employees. If you can tap the inner customer within your organisation, empower employees to be brand advocates and arm them with appropriate tools, you are destined for success. The happiness of your employees has a direct effect on your external customer community. In the latest survey 61% of companies and 57% of their agencies stated that intolerance of poor customer service was expected to climb in 2010. Whether they set up customer communities based around forums, chat groups or customer feedback solutions, organisations that embrace engagement for customer service can ensure that their customers have the level of information and interaction they expect to continue to be loyal. Communication comes in many forms, but the key thing to bear in mind moving forward is that planning and persistence are invaluable. When implementing new marketing tools, feedback solutions, mobile applications or Intranets, engaging customers in true (e.g. two-way) conversation should be the approach. Customers are inundated at so many touch points, that targeted, authentic engagements will provide more long-term value. Listen. Ask questions. Respond. Let them know when they have a good idea. Staying competitive and increasing customer lifetime value should be goals of any organisation worth its salt. One of the best

ways to address these issues is through co-development. Whether that is co-creation, co-product development, co-working; making customers part of your organisation brings the brand closer to their heart. Who wouldn’t want to have some small part in how one of their favourite brands is designing, developing or positioning a new product? Put the ‘co’ back into company and make customers part of yours. For the 28% of the companies that stated organisational incoherence, culture or (lack of) will as the biggest barrier for cultivating better customer engagement, I hope this helps. BJ is the CEO and co-founder of Digital Operative Inc., a digital marketing agency passionate about helping brands create new products, services and tools to enrich the lives of their customers.

Guy Stephens

Customer [service] is king 2009 saw the emergence of a new type of customer service spearheaded by the use of Twitter – ‘social media customer service’. The first ‘poster child’ of social media-led customer service was Frank Eliason of Comcast. Then came Tony Hsieh’s slogan informing us that

COMMENT

Zappos is a service company that happens to sell shoes, BestBuy’s (r)evolutionary experiment,Twelpforce and the rise of third-party complaint/aggregator sites such as Complaint Community, Plebble and Amplicate. All of these confirmed that this new type of customer service was redefining the ways in which companies engaged with not just their customers, but people in general.

The proliferation of this multi-platform approach is reflected in the fact that 30% of companies are looking to deepen and enrich their product or service offering through the use of social networking, videos, email newsletters, discussion forums, blogging, micro-blogging, on-site branded communities/ forums, content tagging, SMS service alerts and social knowledge sharing.

At the same time, there were signs of a more open, honest and at times even empathetic conversation taking place between companies and their ‘follower-friends’. On the one hand, Twitter provided customers with the ability to vocalise their intent to companies willing to listen; on the other hand, companies found themselves engaged in a ‘real-time feedback loop’ with customers happy to let them know exactly what they thought of their products or service. Never before had 140 characters been so well and, at times, so cleverly used:

The indications are that experimentation will gradually turn into a more confident ‘mainstreaming’ of social media-led customer service.

Customer: “what the ****, [insert company name] you lied to me!” Company: “Hi I work for [insert company name]; sounds like we got it wrong – sorry. How can I help?” UK companies such as ASOS, BT, Virgin Trains and EasyJet recognised that customer service was beginning to move towards a more de-centralised ‘micro-interaction’ (in the words of David Armano) paradigm. Taking the lead from their customers, they explored, appropriated and experimented with how customer service was delivered. They not only did this in ‘real-time’, but also ‘on the go’ via the increasingly ubiquitous smart phone.

Although only 9% of the companies surveyed and a fifth of agencies have seen more interest in customer engagement driven by increased importance and power of the customer, 61% of companies and 57% of agencies believe that intolerance of poor customer service will increase in the next 12 months. Almost half of respondents also realise there is more desire for real-time interaction. In short, whether you believe that social media has changed the rules of engagement and customer service, or think instead that nothing has changed, everything is still to play for. The main difference is that companies are increasingly more willing to listen. Guy is the founder of the LinkedIn Group ‘Where social media meets customer service’. He is a passionate advocate of social media, particularly Twitter (@guy1067), and how it can be used to enhance the customer service experience.

Linus Gregoriadis More enlightened business leaders are promoting processes and employee behaviour which reward attempts to engage customers, while also minimizing the risk of social media ‘fails’.

Be like Zappos not American Airlines The importance of customer engagement is becoming increasingly well understood. This was well illustrated recently by the uproar which followed the decision by American Airlines to fire a web designer who sympathised politely with a disgruntled customer who made some criticisms about the airline’s website. It’s good to see customer engagement in the mainstream news, even if it wasn’t quite for the right reasons. The employee had broken a non-disclosure agreement around the airline’s internal workings but his employers should have handled the matter a little less clumsily. After all, the designer was driven by a desire to engage with the customer and improve his company’s website by offering constructive criticism. Thankfully, many companies are now seeing the bigger picture and are trying to bring about a cultural shift. More enlightened business leaders are promoting processes and employee behaviour which reward attempts to engage customers, while also minimising the risk of social media ‘fails’.

In this latest survey, we have tried to understand the extent to which companies are moving towards an Enterprise 2.0 environment and focusing on what we describe as their ‘social business design’. A great example of a company reaping the rewards of customer engagement is the online retailer Zappos, which has 380 people in its customer loyalty department and now gets 75% of its business from repeat customers. Its employees routinely send hand-written thank you cards and flowers to customers by way of thanks. Zappos’ management team encourages employees to make decisions and, in stark contrast to a company like American Airlines, doesn’t punish them when they show initiative in the use of new communication techniques. Our research shows that companies who have processes and workflows to use social media to build customer dialogue, or who urge staff to use sites such as Twitter and Facebook to build customer dialogue, are still very much in the minority. However, we predict that in a year’s time significantly more companies will be embracing social media activity, whether for customer service, internal communications or for product development and innovation. While everyone is talking about social media, we shouldn’t lose site of the fact that customer engagement is about much more than an employee with a Twitter account or an executive with a blog. Customer engagement needs to be effective and consistent across offline and digital channels. There are also tremendous opportunities created by mobile

COMMENT

and this is reflected by a dedicated section on this topic in this year’s report. As we’ve been saying since the first Customer Engagement Report three years ago, it is important to map customer experiences across different touch points. The research shows that organisations that are doing this are significantly more likely to have successful customer engagement strategies. Linus is Research Director at Econsultancy where he oversees much of its award-winning content.

BJ Fogg

Your customers are waiting Here’s a bet I would make; the bigger your brand, the more likely you have felt frustrated in 2009. This is not just because the economy tanked; the frustration came from seeing new ways to engage customers but being unable to take action. 2009 was the year that Facebook and Twitter clearly emerged as channels for brands to engage their customers. And some brands dazzled, with millions of followers and fans. But by and large, most brands sat on the sidelines. Over half of the companies surveyed last year did nothing to engage customers on Facebook or Twitter in 2009, even

though more than 500,000 people each day joined Facebook, and Twitter really took off. Furthermore, although online video is nearly ‘a universal’ for consumers, most companies did nothing with this dynamic channel. The reason, I would say, was fear. They worry that rich media may be too much for their customers and that using Facebook or Twitter or the like would lead to brand-damaging mistakes. I would suggest that their biggest mistake was failing to explore these new avenues for customer engagement. The flip side of brand risk is brand value. A few individuals at every major brand understand this. In 2009, these individuals learned to navigate the new worlds of Facebook, Twitter, and online video. They championed these channels internally hoping to increase brand value. But the path forward has often been blocked by organisational fear. That’s why I wager that 2009 has been a year of frustration. There’s certainly a growing gap between what ordinary people do and what established brands dare to do. There’s a huge party going on in social media and everyone seems to be there – everyone, that is, except brands sitting at home and mere ly watching the party on TV. How long will customers wait for those brands to catch up? BJ is a social scientist and innovator described by Fortune Magazine as one one the ‘10 New Gurus You Should Know’. He’s also the author of book Persuasive Technology: Using Computers to Change What We Think and Do.

Investment to drive increased customer engagement

There’s a huge party going on in social media and everyone seems to be there – everyone, that is, except brands sitting at home and merely watching the party on TV.

Figure 21 shows that the emphasis on social media in the context of customer engagement is set to continue. The majority of companies say that they will increase investment in their social network presence (61%) and 44% will spend more on micro-blogging. Figure 23 provides evidence that many more companies than a year ago are gearing up for investment in social networking and Twitter. This also shows that there will be less emphasis on micro-sites as we move into 2010. This may be due to a reduced focus on customer acquisition which often involves campaign micro-sites. Companies are thinking more strategically about how they can build engagement on their principal web properties rather than tactical landing pages. It should be noted that the increased focus on social media is not coming at the expense of email investment. More than half of companies (58%) are still planning to increase their investment in email newsletters over the course of the next year. Many companies are now tying up email activity with social media. Increased use of behaviourally targeted email does not seem to be coming at the expense of email newsletters, even though it is becoming harder for companies to get the attention of customers through generic newsletters. Marketers are having to make their e-newsletters relevant by personalising content and, in some cases, by inserting event‑triggered dynamic content.

Changing behaviour and attitudes Intolerance of poor customer service is the type of behaviour or attitude that company respondents are most likely to expect to increase over the next year. Although the equivalent question was phrased slightly differently last year, it is clear that this has become much more of an issue. Over half of respondents (61%) say that they expect people to become less tolerant about poor service; and this percentage has almost doubled since last year. We attribute this to two main factors. Firstly, the recession has led to even more competition between businesses and this means that the desire to retain customers is even stronger. The second factor is the rise of social media which means that companies are more aware when there is dissatisfaction about products or services. Disaffected consumers can now name and shame instantly in full view of dozens or even thousands of people. Consequently, many companies have raised their game, recognising that provision of an excellent customer experience has never been a better way of marketing a business. Almost half of respondents (48%) say there is more desire for real-time interaction. Sensitivity to price is still prominent for companies and agencies but it can be noted that it is no longer most likely to be front of mind. Compared to a year ago, companies now have a better understanding of how elastic their pricing is.

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010

The recession has led to even more competition between businesses and this means that the desire to retain customers is even stronger. Figure 21

Company: In which areas will you increase investment to drive online customer engagement over the next 12 months?

Many companies have raised their game, recognising that provision of an excellent customer experience has never been a better way of marketing aÂ business.

60 50

20 10

20 0

10 0

Presence onnetworks: social networks: branded Presence on social On-site brandedOn-site communities 61%61% / forums: 27% / forums: 27% Email newsletters: 58%

Email newsletters: 58%

Figure 23

Company: Which of the following behaviours and attitudes do you expect your organisation will need to address in the next 12 months? 80 communities 70

Mobile communications: Mobile communications: 25%

On-site video (brand-created): 25% 60 49%On-site video (brand-created): Social knowledge sharing: 25% 49% utilities: 44% Social knowledge sharing: Microblogging 50 25%and Web-based widgets UserMicroblogging ratings and feedback: utilities: 44%badges: 25% 44% Web-based widgets 40and User ratings and feedback: Rich media advertising: 21% Blogging: 43% badges: 25% 44% SMS service alerts: 17% User-generated content: 35% 30 21% Rich media advertising: On-site video (user-created): 43% Rich Blogging: on-page interactive 13% experiences: 31% SMS service alerts: 17% 20 User-generated content: 35% Desktop-based applications Focused micro-sites: 29% On-site video (user-created): and widgets: 13% Rich on-page interactive Personalised messaging 10 13% On-site audio: 12% experiences: 31% throughout the site: 29% User on-page customisation: Desktop-based applications 0 Focused micro-sites: 29% 11%

Intolerance of poor service: customer Intolerance of poor customer 61%service:

FocusFocus on quality: 53% on quality:

53%

Desire for simplicity: 53%

Desire for more real-time interaction: 48%

Sensitivity to price: 47%

Prolonged decision-making: Sensitivity to price:23% 47%

Lack of supplier / brand loyalty: 22%

Prolonged decision-making: 23%

Focus on short-term needs: 17%

Lack of supplier / brand loyalty: 22%

Buying and selling second-hand: 13%

Focus on short-term needs: Buying own-brand products: 12%

61%

17%

Sacrifice (familyand firstselling etc.): 9%second-hand: Buying

13%

Purchase of luxury and indulgent items: 6%

Buying own-brand products: 12% Sacrifice (family first etc.): 9%

and widgets: 13% Purchase of luxury and indulgent items: 6% Personalised messaging Figure 24 On-site audio: 12% throughout the site:and 29%2009 results Company: Areas for increased investment â&#x20AC;&#x201C; difference between 2010 Company: Behaviours and attitudes â&#x20AC;&#x201C; difference between 2010 and 2009 results User on-page customisation: 11% 30 communities Presence on social networks: On-site branded 35 35 Presence on social networks: On-site branded communities 30 Intolerance of poorservice: customer Intolerance of poor customer 29% service: 29% 25% / forums: 3% 25% / forums: 3% 25 Focus on quality: 9% 30 25 Focus on quality: 9% 30 Email newsletters: -1% Mobile communications: Email newsletters: -1% Mobile communications: Desire for simplicity: 17% 7% 20 25 Desire for simplicity: 17% On-site video (brand-created): 7% 20 25 On-site video (brand-created): Desire for more real-time interaction: N/A 7% Social knowledge sharing: 15 20 Desire for more real-time interaction: N/A 9% 7% Social knowledge Sensitivity to price: -1% Microblogging utilities: 31% 15 sharing: 20 10 15 Web-based widgets and9% Sensitivity to price:-12% -1% Prolonged decision-making: User ratings and feedback: Microblogging utilities: 31% badges: -1% 10 3% 15 10 Web-based widgets and 5 Lack of supplier / brand loyalty: -8% Prolonged decision-making: -12% Rich media advertising: N/A User ratings and feedback: Blogging: 7% badges: -1% 0 5 Focus on short-term needs: -10% 5 3% 10 SMS service alerts: 2% Lack of supplier / brand loyalty: -8% User-generated content: -2% Buying and selling second-hand: 7% Rich media advertising: N/A -5 0 On-site video (user-created): Blogging: 7% Rich on-page interactive 0 Focus on short-term 5 -1% Buying own-brand products: 5%needs: -10% SMS service alerts: 2% -10 experiences: -6% -5 User-generated content: -2% Desktop-based applications Sacrifice (familyand first selling etc.): 2%second-hand: 7% Buying -5 Focused micro-sites: -9% 0 -10 -15 On-site video (user-created): and widgets: -2% Purchase of luxury and indulgent items: -3% Rich on-page interactive Buying own-brand products: 5% Personalised messaging -1% -10 experiences: -6% On-site audio: -1% -5 throughout the site: 2% Sacrifice (family first etc.): 2% User on-page customisation: Desktop-based applications Focused micro-sites:-4% -9% -10 and widgets:-15 -2% Purchase of luxury and indulgent items: -3% Personalised messaging On-site audio: -1% throughout the site: 2% 21 User on-page customisation:

Figure 22

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010

Companies increasingly need to think about their “social business design” Enterprise 2.0 This year’s research covers what we describe as ‘Enterprise 2.0’, a phrase we use to refer to how organisations are equipping themselves internally to embrace social media and customer engagement in a world where the traditional business paradigm has been disrupted. Companies increasingly need to think about their ‘social business design’, and how they organise themselves to take advantage of unprecedented opportunities for facilitating communication with, and between, customers and employees. So we asked companies and agencies whether they were using various types of Web 2.0 technology and features to drive the following:

The aim is to understand more about how companies are taking a more holistic approach to customer engagement.

Figure 25 shows the extent to which 10 companies are embracing a range of channels, features and technologies for product 5 development and innovation. 0

5 0

Employee blogging: 17%

30Discussion forums: 17% Social networks: 36%

Email newsletters: 36% User ratings and feedback: 25%

Employee blogging: 17%

25 20

40User ratings and feedback: 25%

40 35

Email newsletters: 36%

• Internal communication

20 Adoption of technology for product development and innovation 15

50 Social networks: 36%

Company: Has your organisation adopted any of the following for internal communications?

• Production development and innovation

40 The aim is to understand more about how companies are taking a more holistic 35 approach to customer engagement, beyond the use of technology and social media simply 30 for marketing.

Figure 26

Company: Has your organisation adopted any of the following for product development and innovation?

• Customer service improvement

Figure 25

Discussion forums: 17%

Video sharing: 16%

Internal or in-company social networking: 13%

On-site branded communities / forums: 13% 10 Podcasts: 12%

Mobile communications: 11% Social networks: 36%

Social knowledge sharing: 8%

Email newsletters: 36% User ratings and feedback: 25%

Internal microblogging utilities: 5%

Mobile communications: 11% 0 Intranet: 10% Social networks: 12%

Email newsletters: 32% sharing: 8% Social knowledge User ratings and feedback: 9%

SMS service alerts: Employee blogging: 16% 7% Discussion forums: 15%

Instant messaging: 6% Video sharing: 9% Internal microblogging utilities: 5% Internal or in-company social networking: 32%

On-site branded communities / forums: 13% 10 Podcasts: 12%

On-site branded communities / forums: 7%

Mobile communications: 11%

Mobile communications: 6%

Intranet: 10%

Podcasts: 6%

Intranet: 43%

Social knowledge sharing: 8%

Social knowledge sharing: 17%

SMS service alerts: 7%

SMS service alerts: 4%

Instant messaging: 6%

Instant messaging: 20%

Employee blogging: 16%

On-site branded communities / forums: 13% Video sharing: 9% 10 Internal or in-company social networking: 32% Podcasts: 12%

Internal or in-company social networking: 13%

User ratings and feedback: 9%

Internal or in-company social networking: Discussion 13% forums: 15%

Content tagging: 10%

Content tagging: 17% Video sharing: 16%

SMS service alerts: 7% Instant messaging: 6%

Employee blogging: 17% Discussion forums: 17%

Intranet: 10%

20Video sharing: 16%

Email newsletters: 32%

Content tagging: 10%

Content tagging: 17%

Social networks: 12%

On-site branded communities / forums: 7% Podcasts: 6% Mobile communications: 6% Intranet: 43% Social knowledge sharing: 17% SMS service alerts: 4% Instant messaging: 20% Internal microblogging utilities: 9%

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010

“

“We will be starting regular staff social media boot camps for key/enthusiastic staff.” “We are using YouTube heavily to show our customers different applications of our product line.” “We show Twitter feedback and mentions of our brand and content, on our own site to be transparent about what others are saying about us.” “We are reviewing our social media policy. Currently we have limited presence but plan to increase that this year.” “We send more personal messages via Twitter. e.g. we engage on a one-to-one basis with people that catch our eye who are mentioning the brand in some way and we do this publicly. e.g. we might wish someone good luck if they say they are starting one of our courses or ‘hope it goes well’ if they mention they’re speaking at one of our events. This goes down very well and feels natural. Over time it might become resource-intensive.” “We enable customers to share information with the company and their friends on Facebook and Twitter.” What company respondents said when asked how their organisations were innovating in the way they engage with their customers online.

”

It can be seen that many organisations are missing an opportunity. Just over a third of organisations (36%) say they are using social networks and email newsletters for this purpose but only a quarter (25%) of companies tap into user ratings and feedback. Even fewer (17%) are using discussion forums to feed into development. Just as they are failing to tap into customer feedback, many companies are also neglecting to share information internally. Very small percentages of respondents are using employee blogging (17%), internal social networking tools (13%), intranets (10%) or social knowledge sharing (8%) to help drive development and innovation.

Adoption of technology for internal (employee) communications Although only 10% of companies are using an intranet for product development and innovation, 43% are using this tool for internal communications. (Figure 26) Email newsletters and internal social networking are used by around a third of companies (32%). These tools can be particularly helpful for larger organisations which are divided up into numerous departments and physical locations.

Adoption of technology for customer service improvement As was the case with product development and internal communications – apart from using email newsletters (55%) and social networks (36%), most companies are fairly

limited in how they are approaching customer service improvement beyond the traditional routes which companies have always adopted. (Figure 27) Some organisations are now using Twitter and Facebook for customer service because these are excellent vehicles for customers who want to engage in real-time. The use of social networks for customer service is something that companies have to consider carefully before adopting because such an approach can backfire unless an organisation is properly geared up to deliver against expectations. But where a company does this well, it can spread goodwill and improve brand sentiment.

Resourcing social media and customer engagement In order to understand how companies are resourcing social media and customer engagement activity, we asked our company respondents whether a number of statements were true. More than half (55%) of responding companies say there is a specific team or individual internally to manage social media. Exactly a quarter of companies have commissioned an agency to use social media for customer engagement. (Figure 28) The increased profile of social media is also reflected by the fact that a third (34%) of companies have increased their social media budget in the last 12 months.

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010

Figure 27

Organisations who urge their staff to engage with social media are still very much in the minority. Some 29% say senior staff are urged to use social media to build customer 36% dialogue, while a fifth (19%) say this applies to junior staff.

Company: Has your organisation adopted any of the following for customer service improvements?

Many businesses Social networks: only see social media in terms of Email newsletters: 55% These low percentages reflect the the cost to their trepidation which companies feel about business because User ratings and feedback: 26% of time spent allowing staff to engage directly with by employees online. There has been plenty of Employee blogging: customers 17% socialising online. negative publicity about brand representatives

50 40

Figure 28

Company: Which of the following statements are true for your organisation?

Discussion forums: 20% using social media inappropriately; for

Social networks: 36%

Email newsletters: 55%

50 40

User ratings and feedback: 26% Employee blogging: 17%

Discussion forums: 20% Content tagging: 15%

30 20

Video sharing: 17%

Internal or in-company social networking: 5% On-site branded communities / forums: 14%

Podcasts: 11%

0 0

Mobile communications: 10% Social networks: 36%

Intranet: 4%

Email newsletters: 55%

Social knowledge sharing: 9%

User ratings and feedback: 26%

SMS service alerts: 12%

Employee blogging: 17%

Instant messaging: 6%

Discussion forums: 20%

Internal microblogging utilities: 5%

Content tagging: 15% Video sharing: 17% Internal or in-company social networking: 5% On-site branded communities / forums: 14% Podcasts: 11% Mobile communications: 10% Intranet: 4% Social knowledge sharing: 9%

SMS service alerts: 12% Instant messaging: 6%

Content tagging:

example Habitat’s inappropriate use of ‘hash 15% tags’ on Twitter and the Ryanair employee who called a blogger a liar and an idiot.

Video sharing: 17%

Many businesses only see social media Internal or in-company socialofnetworking: 5%business in terms the cost to their because of time spent by employees On-site branded communities forums: 14% socialising /online. The other side of the story (unreported in newspapers) is that Podcasts: 11% many companies could be missing out on an opportunity to improve customer Mobile communications: 10% engagement and enhance their brand, by empowering employees while giving the right Intranet: 4% guidance.60However, only 17% have processes and workflows Social knowledge sharing: 9% in place to encourage staff 50 media, and only 13% actually use of social incentivise staff to use social media to engage SMS service alerts: 12% 40 with customers online.

10 0 There is a specific team or individual internally to manage social media: 55% We have increased out social media budget in the last 12 months: 34% Senior staff are urged to use social media to build customer dialogue: 29% We have commissioned an agency to use social media for customer engagement: 25%

Instant messaging: 6%

Junior staff are urged to use social media to build customer dialogue: 19%

Internal

We have dedicated social media budget: 17%

The agency data suggests even more 30 investment social media, with 44% of microblogging utilities:in5% agency respondents saying that clients have 20 increased their budget for this type of activity. 10 0

We have processes and workflow to encourage staff use of social media: 17%

We have hired extra staff to help with out social media efforts: 14% We incentivise staff to use social media to engage with customers online: 13%

COMMENT

As we approach 2010, we are now firmly entrenched in Search 2.0 Adam Hibbert The feeling of ‘stuckness’ is changing. Social media seems to be acting like a social solvent; freeing value from places we hardly knew we had places.

Employee engagement – sine qua non for customer engagement At Aviva, we’re transforming from dozens of ancestor businesses and propositions to ‘One Aviva’. The proposition we’re cohering around is all about attention to individual customers. We’re applying Net Promoter Score measures globally to get our KPIs straight – customer engagement is our Holy Grail. That demands effective feedback and process improvement, internally. All our colleagues need to see and understand our brand promise, agree that it’s important, believe that it’s possible and take responsibility for getting us there. We need every single employee to be alive to our brand promise. It’s an uphill battle in a complex multi-national, stretched by relentless change in the last decade. Survivors have seen it all, taking ‘tell and sell’ campaigns with a fistful of salt. Junior ‘just passing through’ employees grow jaundiced when the legacy proves harder to budge than we’d wish for. That’s corrosive for engagement, resulting in the ‘learned helplessness’ of a Dilbert strip.

Our new global intranet let us cut through that by demonstrating that the company can respond to employee needs – and so we might really do the same for our customers. Crucially, it’s allowed us to enlist everyone’s feedback. An all-staff forum on our homepage is slashing the social distance between frontline and C-Suite, hiking up the transparency and accelerating feedback; cross-border, crossfunctional teams are springing up and solving problems faster. Employees see executives up close and personal in the forums; executives are beginning to see the benefits of dialogue with employees; the sincerity and determination behind the new brand are steadily gaining credibility. The feeling of ‘stuckness’ is changing. Social media seems to be acting like a social solvent; freeing value from places we hardly knew we had places.

Our biggest internal challenge for 2010 will be to keep proving our promise to employees, giving them ever more power to deliver for our customers. Online, our biggest internal challenge for 2010 will be to keep proving our promise to employees, despite the maelstrom – giving them ever more power to deliver for our customers. More powerful search and semantic analysis solutions would round off the peer-driven intranet we’ve unleashed.

Engaged employees need the ability to connect freely and to structure the information they see around their own, specific queries. Adam is Group Communications Manager for Aviva plc. His background is in UK-based print & online media, from radiotimes.com to The Sun.

Amanda Davie

Is search ready for Web 3.0 … or is it just semantics? This year’s survey confirms an even more dramatic uptake in Web 2.0 strategies among brands than last year’s version and forecasts more of the same to come. Social media – specifically social media optimisation - is an important technique of search marketing; genuine (and non-commercial) conversations and links created between real people and brands are the only real way search engines can establish that a website is popular. As we approach 2010, we are now firmly entrenched in Search 2.0. I would define this as a richer and more relevant search experience combining video, audio, imagery and map results. It includes the ever-increasingly important index of user-generated content, served up in as timely a fashion as is technologically possible. The war to dominate the real-time search market is already

underway with Twitter signing deals to put messages sent via its micro-blogging service into the Microsoft and Google search indexes (at the time of writing, it’s currently Microsoft one, Google zero). And of course, there is Twitter’s own search tool (http://search. twitter.com), as well as some new entrants to the real-time search market e.g. Scoopler (http://www.scoopler.com). So what will Search 3.0 look like? Well, if Web 3.0 is the Semantic Web, then Search 3.0 will be all about, well, the semantics! As a linguist, I can’t tell you how excited I am about Search 3.0. There will be a shift away from building keyword lists and a focus towards understanding search psychology. Understanding search linguistics and semantic behaviour is a good start; brands will need to get to grips with how searchers translate their complex hopes, dreams and information needs into sophisticated natural language search queries. They’ll have to learn how to respond in terms of the digital assets they provide against searches and also look even more closely at how branded content is worded. Search is about to get really, really interesting, changing from being the marketing channel for geeks to the marketing channel for geniuses. Or is the plural of genius genii? Find the answer in true Search 2.0 style by crowd sourcing: http://bit.ly/35NZYD Amanda is a member of the cScape CEU and the founder of Reform, an independent search business consultancy that builds practical solutions for clients and agencies – from SEO & PPC through to business planning, strategy, training and analysis.

COMMENT

Developing an effective online engagement strategy is not a short term, tactical exercise. Theresa Clifford

When to engage and why Back in November 2006, when cScape first launched the Online Customer Engagement Survey, not many people had heard of ‘customer engagement’ as a concept. Over the last three years, as this year’s survey results show, there has been a huge rise in the number of companies who feel that the engagement of customers is a key part of their digital strategy. But how do you work out if an engagement strategy is right for your organisation? And if it is right, when should you implement it and what should you engage your customers around? Our experience of working with a range of clients on their digital strategies, from large corporations like Sony, Barclays and Aviva to professional bodies like the Chartered Institute of Personnel and Development (CIPD), leads us to believe that you really need to ask three key questions before launching into an engagement strategy: • Do you really want to engage with your customers? Is an engagement strategy the right approach for your target audience? We have worked with some clients who just needed to impart certain facts to their

stakeholders and leave it at that. For these organisations, customer engagement was neither appropriate nor relevant. • Are your customers actually suitable for engagement? You may find that, while your customers are very eager to be engaged with, this will not create much increased value for your business. Customer engagement should ultimately be about helping you to achieve a return on your objectives. If there are no long term benefits, do not adopt an engagement strategy. • Does your product or service lend itself to an engagement strategy? If a purchase is a one off, it might not lend itself to further dialogue. Similarly, if the optimum timing for a client conversation is once every 10 years, striking up a conversations on a weekly or monthly basis won’t have the desired effect. Developing an effective online engagement strategy is not a short-term, tactical exercise. Nor is it easy. You need to commit to it long term to gain real business value and you must really put the effort in to planning, executing and measuring if you want it to pay real dividends. Taking time to question the relevance of your customer engagement approach before you commit to it will hopefully save you a lot of time, effort and money in the long run! Theresa is Sales and Marketing Director at awardwinning digital agency, cScape. She has worked in the digital industry since 1997 and has written for a variety of publications and presented at many events around the globe.

Paul Blunden As customer behaviour continues to evolve in as yet unknown ways, the opportunities to engage will also grow and develop.

Multi-channel customer engagement – the customer owns it not you “Suicide, not competitors, drives companies out of business” according to management consultant Tom Peters, and I think he makes a valid point. This year’s survey suggests companies have gone backwards in their understanding of customer touch points compared to last year. 36% of companies have their multi-channel touch points mapped to gain a single view of the customer at either an advanced or quite advanced level. The rating is consistent between agency and client and also correlates with the percentage who report having carried out user journey mapping. Last year the figure was 45% and yet multi-channel as a topic has gained significant traction. The economic uncertainty is a ready excuse for inertia in business but customer behaviour is changing, fuelled by continuing technological advances. Part of the reason for this anomaly lies in the way we think about customer interactions. While customers have been using multiple channels for years, we tend to think of them as using one channel at a time or two channels designed specifically for a purpose.

For example, catalogue shopping is often used in conjunction with another channel – the ‘phone or a physical agent and increasingly the web. We think vertically but customers behave horizontally. With only 11% of companies and 10% of their agencies reporting this year that they intend to invest significantly in mobile it seems that businesses still believe they have a choice; to deal with this channel either later, or not at all. The challenge is that their customers are not waiting. Recent research showed customers using camera enabled mobile phones to take photos of a product they were considering in order to share it with their friends on Facebook. The retailer may not have a mobile strategy but the customer does and so the engagement opportunity is being missed. Why didn’t they provide downloadable, high resolution photos in store via Bluetooth? What about using bar-code scanning data to encourage return visits? These are not transactional strategies – they are engagement strategies. As customer behaviour continues to evolve in as yet unknown ways the opportunities to engage will also grow and develop. Businesses that decide not to understand key aspects of their customers will miss these opportunities and leave them available to competitors. Over 75% of the organisations surveyed this year are contemplating suicide, whether they recognise it or not. Paul is the CEO of Foviance a London based consultancy that works with global organisation to help them improve their customer touch points across all channels.

4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010

Figure 29

Barriers to cultivating customer engagement Lack of resources (budget and time) is still perceived to be the biggest barrier to cultivating better customer engagement, with 52% saying that this has been an obstacle in the last 12 months. This is exactly the same proportion as last year. Lack of skills, experience or understanding has become a more significant issue than last year and is now the second biggest problem. The percentage of respondents saying this is a significant barrier has increased by 9% to 33%. The second biggest challenge last year was problems with technology but that is now much less of an issue, almost halving from 30% last year to 17% now saying this is an issue. Social media has impacted how companies go about improving customer engagement and has often changed the focus from technology owned or licensed by companies themselves 60 to third-party websites. 50

Agencies highlight the fact that their clients are finding it difficult to show a return on 40 investment from use of social media or to build a business case for it. 30

Many companies are wrestling with how to get investment for social media and 20 customer engagement activity. 10 0

Company: Which of the following have been the most significant barriers to cultivating customer engagement in the last 12 months? Many companies are wrestling with how to get investment for social media and customer engagement activity.

60 50 40

Figure 30

Company: Barriers – difference between 2010 and 2009 results

9Lack of resources (budget and time): 52%

Lack

6Lack of skills / experience / understanding: 33%

Lack

Lack of, or difficulty proving, ROI / business case: 28% 3 Organisational incoherence, culture or (lack of) will: 28%

Lack

0Lack of senior management buy-in: 27%

Lack

Orga

-3Complexity of organisation: 25%

Com

Lack

Lack of methodology of framework: 20% -6 Problems with technology: 17%

-9Focus on short-term benefits: 16%

Focu

10 0 Lack of resources (budget and time): 52%

-12Customers or products unsuitable: 10%

Cus

Difficulty in finding supporting agencies: 3% -15

Diffi

Lack of resources (budget and time): 0%

Lack of skills / experience / understanding: 33% 6

Lack of skills / experience / understanding: 9%

Lack of, or difficulty proving, ROI / business case: 28% 3 Organisational incoherence, culture or (lack of) will: 28%

Lack of, or difficulty proving, ROI / business case: 0%

Lack of senior management buy-in: 27% Complexity of organisation: 25% Lack of methodology of framework: 20% Problems with technology: 17% Focus on short-term benefits: 16% Customers or products unsuitable: 10%

0 -3 -6 -9 -12

Difficulty in finding supporting agencies: 3% -15

* Respondents could check up to three barriers

Prob

Organisational incoherence, culture or (lack of) will: 7% Lack of senior management buy-in: 9% Complexity of organisation: -1% Lack of methodology of framework: -5% Problems with technology: -13% Focus on short-term benefits: -10% Customers or products unsuitable: 4% Difficulty in finding supporting agencies: -1%

We d 4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010

We d

Mobile is at a very embryonic stage. Mobile Investing in the mobile channel

Our c

Figure 31

Figure 33

Company: Do you plan to invest in the mobile channel in 2010?

The mobile channel has gradually been increasing in importance over the last few years and the rise of smart phones and increased use of the ‘mobile internet’ has accelerated this, but there is still no big step change in terms of investment.

Company: How is your organisation using mobile marketing and services to enhance customer engagement?

No: 41% Yes, but limited investment: 49% Yes, significantly: 11%

A large proportion (41%) of companies are not planning any investment at all in mobile.

A large proportion (41%) of companies are not planning any investment at all in this channel in 2010 and a further 49% are planning only limited investment. Only 11% are planning to invest significantly but this increases significantly for the largest companies. Agency respondents report fewer numbers of companies (16%) planning zero investment.

Mobile and customer engagement strategy This research looks at investment in mobile marketing and services in the context of its use for enhancing customer engagement. A small minority of organisations (6%) say they have a customer engagement strategy which embraces mobile marketing seamlessly.

They

We don’t do any mobile marketing, and we don’t have any plans to do any: 41% We don’t do any mobile marketing, but we are planning to: 36%

They

We do the occassional ad hoc piece of marketing via the mobile channel: 18%

Their

Our customer engagement strategy seamlessly embraces mobile marketing: 6%

Figure 32

Figure 34

Agency: Do your clients plan to invest in the mobile channel in 2010?

Agency: How is your organisation using mobile marketing and services to enhance customer engagement?

No: 16% Yes, but limited investment: 52% Yes, significantly:0 10%

The majority of companies who are using the mobile channel at all are using it just for the occasional ad hoc piece of marketing (18%). A mobile strategy needs to embrace many areas touching upon customer engagement, including messaging (MMS and SMS), online content provision and commerce. It is therefore not surprising that many companies are wrestling with their mobile strategy.

They don’t do any mobile marketing, and they don’t have any plans to do any: 24% They don’t do any mobile marketing, but they are planning to: 34% They do the occassional ad hoc piece of marketing via the mobile channel: 36% Their customer engagement strategy seamlessly embraces mobile marketing: 6%

They

120

We are doing this 100

A long way off / no plans

100

We are doing this Plan to do this

41%

48%

42%

44%

24%

17%

15%

49%

37%

30%

39%

12%

14%

12%

We are doing this

Plan to do this

54%

19%

26%

12%

17%

73%

66%

19%

26%

marketing

Location-based

broader CRM

user-generated content

Location-based

Creating opportunities for

39%

Integrating mobile marketing into

user-generated content

10%

m-commerce Creating opportunities for

broader CRM

28%

Transactional /

Integrating mobile into

m-commerce

14%

Transactional As integral part /

information of customer

As integral part

14%

31%

lifecycle marketing

39%

Personalised

information

Personalised

Creating

with customers

16%

Creating applications applications

0 20%

34%

of customer lifecycle marketing

56%

Increased dialogue with customers

100

52%

62%

51%

We are doing this 41%

should be taken in 2010.

A long way off / no plans

Plan to do56% this

51%

A long way 54% off / no plans 54%

28%

41%

48%

42%

44%

37%

30%

39%

19%

26%

24%

17%

15%

12%

14%

12%

17%

49%

marketing

Location-based

user-generated content

Creating opportunities for

broader CRM

Integrating mobile into

m-commerce

Transactional /

of customer lifecycle marketing

Ourare latest survey We doing thisshows that there is a dilemma within both agencies and client

Agency: In what ways are your clients using mobile marketing to build customer engagement? 100

Mobile: reframing the thinking Plan to do this organisations about how seriously mobile

Figure 36

As integral part

Companies who are either using or planning to use mobile as part of their customer lifecycle marketing, for broader CRM, for user-generated content or location-based marketing are also in the minority.

41%

36%

56%

47%

50%

28%

information

Surprisingly, nearly two thirds of companies (62%) have no plans for mobile commerce. Only 10% of companies are using transactional mobile activity to build customer engagement. A further 28% are planning to do this.

44%

Personalised

A third (34%) of companies are planning to create applications for mobile phones, in addition to the 16% who say they are already doing this.

100

Creating applications

Companies have been quickest to use this channel for increased dialogue with customers. A fifth of company respondents say they are doing this and a further 36% say they plan to do this soon.

100

Increased dialogue

It is again clear from the small number of companies who are active across this spectrum of activity that mobile is at a very embryonic stage in the adoption curve.

Jay Cooper

60 Company: In what ways are you using mobile marketing to build customer engagement?

with customers

We have broken down mobile marketing into separate areas in order to understand in more detail how companies are using the channel to engage with customers. These areas of mobile are based on a model used by mobile marketing strategist and cScape CEU member Jay Cooper.

A long way off / no plans

Figure 35

Increased dialogue

Using mobile marketing to build engagement

COMMENT

Plan to do this

Mobile is a healthy media, yielding good results for those who know how to use it. But it hasn’t yet become mainstream enough and as the study shows, there isn’t a fundamental grasp of how to make mobile marketing relevant for consumers. If there was, companies and their agencies would show bigger confidence in the media and it would be taking more of a centre stage. As it is, they are taking no more than tentative steps into using this channel. What is key is that consumer use of mobile is increasing and in some geographies, such as Asia, that growth exceeds computer usage. Consumer studies, such as Orange Exposure, show that consumers understand mobile and they will consume mobile media wherever relevant. This isn’t just down to the proliferation of smart phones or iPhones out there; it is because consumers are now more switched on to what they can use their devices for.

COMMENT

Please, please don’t forget about that faithful steed in the stable known as email. So how do we bridge the gap? Which elements of knowledge are missing? Where are the answers? My belief is that it isn’t the questions that are wrong, nor is there a lack of thought leadership around this area. It is simply reframing the thinking behind what we’ve got in front of us. Mobile is not and should not be treated like any other mass media. It is not online’s smaller sibling, nor is it a screen that grabs attention for long periods of time. It is a device that is always with the consumer and is consumed at different times of day and in different ways according to the differing mindsets a consumer can be in. It is a device that is personal to the consumer and if is treated that way, it will get their attention above and beyond other media. It is designed for communication. Communication is not just about connectivity. It is two-way dialogue – including listening not just fighting to be heard. It doesn’t take a leap of technology to make changes. It takes a reframing of the media to think how your consumer wants to be listened to. Jay Cooper is a mobile marketing strategist, specialising in the field of CRM through mobile channels. He is the Strategy Director for ROI Mobile, an agency that specialises in mobile marketing. His experience is drawn from having previously worked as Head of third-party CRM for Blyk, the ad-funded MVNO (mobile network) for 16-24 year olds. Previous to this, Jay was Head of Sales at AMV Group (Redwood) for Boots CRM,

Jim Sterne Consumer use of mobile is increasing and in some geographies, such as Asia, that growth exceeds computer usage.

Friendly: Nice layout. Pretty graphics. Humorous. Personal(ized). It’s just nice.

The trusty steed of online marketing Twitter! Video! Online Gaming! So many great new ways to reach out to customers and really engage them! But what’s the winner? Which communication method “resulted in a tangible improvement in your organisation’s online customer engagement?” Email. Lowly email. It scored 67% vs the next highest which was Brand presence on social networks (44%). “It’s only for old people.” “It’s too slow to be effective.” “I only use it to communicate legal stuff.” Yes, email is still the workhorse of the marketing department. Why? It works. Why? It’s a real Boy Scout. By that, I mean it’s trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, brave, clean, and reverent. No, really. Trustworthy: If you have a clean address and are careful about avoiding spam triggers, email gets delivered. Loyal: As long as you deliver value, customers and prospects will continue to subscribe.

Helpful: You can raise awareness, make offers, give advice, send coupons, ask questions. Be forwarded to friends. So versatile! So social!

Courteous: Email doesn’t shout or flash or blink. It just waits patiently for the recipient to open it. If you don’t want it anymore, just unsubscribe and it’ll go away. Kind: A good email program personalizes each message so the recipient isn’t subjected to non-relevant dross.

Next? Go map your customer experiences to obtain a single view of the customer. Why? Because only 35% of respondents claimed to be doing it with any success and that spells opportunity! Jim has written eight books on using the Internet for marketing, produces the eMetrics Marketing Optimization Summit and is Chairman of the Web Analytics Association.

Pete Mortensen

Obedient: It goes when it should and where it should. Cheerful: Hi! Nice to see you! We thought you’d like to know about this great new offer! Thrifty: If you can think of a less expensive way to communicate with customers please let me know. Brave: Neither rain nor hail nor sleet nor snow nor heat of day nor dark of night shall keep this carrier from the swift completion of his appointed rounds. Clean: It doesn’t end up cluttering up the street or defacing walls. Reverent: Double opt-in? Unsubscribe? Yes, Madam. But of course. So yes, dive into mobile. Yes, invest in Twitter tracking. Yes, increase your budget for social networking presence (and advertising). But please, please don’t forget about that faithful steed in the stable known as email. She’s a real workhorse.

The only way to succeed is to walk the talk Brace yourself, I have some bad news: online customer engagement is not a panacea for all that ails business. It’s also nowhere near as easy as it initially looks on paper. To hear the press talk about it, you would think that all that you need do to transform a company is register a Twitter account and upload your company logo to Facebook. We know better. Successful customer engagement isn’t about purchasing a set of tools or visiting a bunch of websites with strange names. It’s about transforming the way your organisation – or the sales and marketing department, at the very least – approaches its work.

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Look at this year’s survey results: across agencies and client organisations, the approach has been to form a social media team and then underfund them. Why isn’t customer engagement great? Not enough time or resources. What’s stopping it from getting better? Not enough time or resources. It is remarkable how many forward-looking companies are willing to adopt the hottest new trend, so long as it doesn’t cost anything or take time away from more important business. Is it any wonder such flirtations with new technologies fall short of expectations? People perform to the metrics upon which they will be evaluated. If your organisation claims an interest in deep customer engagement but only judges staff based on other activity, few to none will make the extra effort to achieve best-in-class engagement. Organisations that approach online engagement as a distracting hobby won’t get any return from it. Adding the latest buzzword to an organisation practicing business as usual will give you business as usual and a lot of unloved PowerPoint decks. The only way to succeed in online engagement is to genuinely walk the talk. If you actually want to benefit from the social media revolution happening right now, you must effect significant cultural change to support new employee behaviours around engagement. Otherwise, you might as well stick to making cold calls. Pete is a strategist for Jump Associates and is the co-author of Wired to Care: How Companies Prosper When They Create Widespread Empathy.

Rich Wand

Building a deeper emotional connection This new interaction paradigm is based on interfaces that are inclusive, natural, intuitive, responsive and memorable. These are the perfect ingredients for brand to build deeper bonds with larger numbers of customers:

Successful customer engagement isn’t about purchasing a set of tools or visiting a bunch of websites with strange names.

The natural way to engage your customers It’s going to be emotional Over the last few years, many brands have recognised that in order to encourage loyalty and increase customer interactions, they need to build deeper emotional bonds with their audience.

One of the most exciting advances in recent years has been the successful development of gestural interfaces. Until recently, technology often struggled to support this goal, with artificial interfaces often placing barriers between brands and customers. However, things are now changing. One of the most exciting advances in recent years has been the successful development of gestural interfaces. Devices such as the iPhone and Microsoft Surface have been leading the charge in facilitating natural interaction. The arrival of Windows 7 means we now have an operating system with native support for multi-touch interactions.

• Natural user interfaces offer new ways for people to interact with digital content in a way that feels effortless and familiar, just like in the real world. A click is fast being replaced by intuitive gestures such as tap, flick and pinch. They are intuitive and customers can understand how to interact with them without training or previous knowledge. • By freeing users from keyboard and mouse based interactions (peripherals that are not natural or intuitive devices), we can engage customers through more natural experiences. • By allowing designers to break away from the paradigms of a metaphorical (desktop) interface, options for both delightful and deep interactions are opened up. • This new freedom also increases the opportunities for brands to build deeper connections by enabling new experiences and interactions to occur spontaneously and in new locations. The development of these new interfaces offers a sense of liberation not just to customers but to user experience professionals too. By removing artificial interactions, we are free to use our design and interaction skills to focus on enthralling users, not

just enabling their goals. This results in memorable experiences that increase customer participation and deepen engagement. New engagement opportunities Natural user interfaces offer exciting opportunities for companies to engage with their customers on a deeper level. While certain key technologies and devices are still emerging, the next generation of engaging experiences is already well out of the starting blocks. It’s too early to say exactly what shape these solutions will take but what is certain is that touch, vision and speech interfaces will become increasingly important in helping brands deepen bonds with their customers. Rich is a senior user experience consultant at EMC Consulting. He’s at his happiest working when there is no mouse in sight.

Bruno Ancona Lopes

Achieving engagement Clients and agencies concur; customer engagement is essential. But what the practical folks really want to know is how exactly is it achieved? Firstly, you need to equip yourself. It’s great that 55% of companies surveyed have appointed a specific team or individual to

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handle social media and 47% of agencies think their clients are using specialist third parties to help. However, it is not so positive that only 14% of companies have hired extra social media focused staff, given that they are forecasting big increases in social media activity or that 27% believe lack of senior management buy in is a barrier to social media success (up 9% from last year). Companies need to adapt their structure and count on experts that know the tools and frameworks, but also take into account the real needs of the business across multiple departments. With defined goals, they should work on focused efforts with agencies that also get it, aiming for measurable performance improvement.

Deliver product enhancement based on real needs and be sure that useful, caring brands create deeper emotional links with their consumers. Secondly, accept that engagement is not achieved overnight. It’s more like a process; you need to actively monitor and converse with your audience. The insights you get from it lead to a better notion of what should be done to increase the value of your offering. Deliver product enhancement based on real needs and be sure that useful, caring brands create deeper emotional links with their consumers. This leads to long term customer value. As a bonus, when you engage with the cool people that are in the know, your message hits the home run – thanks to the status-phere.

So hop in and play the game! But always remember, games have rules: maintain a crystal clear reputation, adopt radical transparency, provide brand utility and engaging content. The ‘bad’ news? Engagement is not a game you can turn on and off. Either commit or leave the turf. The advantage? When the connection is always on, earned and owned media become abundant and paid media less necessary.

Barriers to a more focused approach to mobile Companies generally attribute their inertia when it comes to integrating mobile to a lack of resources (51%), although there are other widely cited reasons including lack of skills/experience/understanding and lack of business case.

By comparing the data from this report with the previous years, it’s possible to notice three paths for success:

Agencies are more likely to point to lack of skills or inexperience. Companies are still feeling their way when it comes to mobile and a significant complication is that there are so many different strands to mobile which require different expertise.

• Be where your customers are (social networks, Facebook, Twitter et al),

Mapping and measurement

• Embrace customers’ content and opinions. It’s not about what you say about yourself. It’s about what they say about you. • Accept that rich-media advertising and micro-sites focused on the bells and whistles will leave the spotlight. Tell a great story and it will be shared! Lastly, don’t adopt technologies and best practices just because it sounds as if it is right. Understand your customers and what social media can do for your business and then work on having killer ideas that lead to real breakthroughs! Bruno is the CEO of Foreplay – a digital engagement agency based in São Paulo, Brazil. He’s also co-founder of the Online Performance Group, a company that creates high performance websites worldwide.

Methods of gathering customer intelligence As in previous years web analytics has proved to be the most useful method of gaining customer intelligence for engagement. There has been a noticable growth in social media / buzz monitoring; while monitoring online search practices is suprisingly undervalued. 60

Mapping customer experience to gain 50 a single view of the customer Fewer companies say that they are very 40 advanced at mapping their customer touch points than in previous years. Only 3% say 30 that they are very advanced at mapping their customer20 touch-points, compared to 6% in 2007. More companies say they are not very advanced; 40% compared to 36% last year and 10 35% in 2007. 0

Figure 37

Company: What is holding you back from a more focused and integrated approach to mobile marketing?

60 50 40 30 20 10 0 Lack of resources (budget and time): 51%

Complexity of organisation: 17%

Lack of skills / experience / understanding: 28%

Lack of methodology or framework: 16%

Lack of, or difficulty proving, ROI / business case: 27%

Problems with technology: 13%

Customers or products unsuitable: 22%

Lack of compatibility and industry standards: 8%

Lack of senior management buy-in: 21%

Focus on short-term benefits: 6%

Organisational incoherence, culture or (lack of) will: 18%

Difficulty in finding supporting agencies: 2%

50 40

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30 20 10

Figure 37

Eric T. Peterson

Company: In the last 12 months which of the following methods of gathering customer intelligence have you found most useful for engaging your customers online?

Web analytics: 51% Online customer surveys: 34%

Customer journey analysis: 30% Feedback from customer-facing staff: 28%

40 30

Monitoring online search practices: 14% Offline customer surveys: 9% Third party data providers: 9% Attribution modelling: 5%

Measurement & cultivation

Customer interviews: 27%

Online panels: 5%

Social media / buzz monitoring: 21%

Shadowing customer / ethnography: 0%

Focus groups: 18% Usability testing: 15%

It is discouraging to see both corporate and agencies detailing the same barriers to success we have seen in previous years.

We need to start doing this Not very advanced (we don’t even know how many touch-points we have

Quite advanced (we know most of our customer touch-points)

0 Very advanced (we know all our customer touch-points)

Figure 38

Company: How advanced is your organisation at mapping customer experiences to obtain a single view of the customer? 2008

We need to start doing this

Web analytics: 51% Online customer surveys: 34%

Not very advanced (we don’t even know how many touch-points we have

Customer journey analysis: 30% Feedback from customer-facing staff: 28%

Quite advanced (we know most of our customer touch-points) Very advanced (we know all our customer touch-points) 0

2009

Third party data providers: 9% Attribution modelling: 5%

Social media / buzz monitoring: 21%

Shadowing customer / ethnography: 0%

Focus groups: 18% 10 20 Usability testing: 15%

• 20 Lack of skills up 9% 30 (33% of companies, 40 50 from last year)

• Lack of senior management buy-in (27% of companies, up 9% from last year, 31% of agencies, up 7%).

Offline customer surveys: 9%

Online panels: 5%

• Lack of resources (52% of companies, 41% of agencies)

• Cultural incoherence (28% of companies up from 21% last year; 30% of agencies)

2010

Monitoring online search practices: 14%

Customer interviews: 27%

In 2009-10, web analytics is still the number one strategy for gathering customer intelligence online. While it is encouraging indeed to see companies leveraging proven technology, it is similarly discouraging to see both corporate and agencies detailing the same barriers to success we have seen in previous years when it comes to understanding our customers, namely:

All are cited as barriers to success when working to improve customer engagement. While the situation seems to be improving compared to a year ago, none of the challenges appears to be moving towards conclusion, save one – the application of a strategic framework.

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In the previous survey, 33% of organisations reported that lack of methodology or framework was a barrier to cultivating better customer engagement. In the latest survey, the figure is dropping, which suggests to me that companies are starting to embrace the idea that it is not the tools but how you use them. The three year trend is even more encouraging – in the 2008 survey over 36% of companies reported a lack of process and methodology as a primary barrier to their success.

Until senior management understands the need for a defined strategy towards the measurement and cultivation of customer engagement, companies and their agencies will continue to struggle. The depressing statistic is the growth in the lack senior management buy-in statistic. Until senior management understands the need for a defined strategy towards the measurement and cultivation of customer engagement, companies and their agencies will continue to struggle to effect positive outcomes in the digital channel. The opportunity lies somewhere between the 90% or so companies who believe that online customer engagement is important or essential and the 50% plus of companies reporting a lack of resources to define and execute engagement strategies. It is, and always has been, people, process and technology in equal measures that produce results. Determine your strategic framework

for customer engagement and I’m convinced that success will follow.

Consumer use of mobile is increasing and in some geographies, such as Asia, that growth exceeds computer usage.

Eric is an internationally recognised authority on web analytics and digital measurement and the founder of the global consulting group, Web Analytics Demystified. Author of three books on the subject of measurement, he presents frequently at conferences around the world.

Hugh Gage

The wider responsibility for web analytics As this and previous year’s reports have consistently shown, developing a rounded view of customer and visitor engagement is not about any one discipline or source of insight; it requires a more inclusive and holistic approach. Whilst customer engagement is seen by more than half of all businesses as being essential, among other issues the report this year identifies two interesting points: • That barriers to cultivating better customer engagement are widespread and range from technology to management buy-in. • Businesses are using a very wide variety of methods in gathering customer intelligence of which web analytics is the most popular.

However, web analysts cannot and should not operate in isolation. Quality web analytics data may be available literally for free but that doesn’t mean it should be the only source of insight. Web analytics data provides one of the main platforms from which web analysts play their part in contributing to a bigger picture. but the depth of insight around customer engagement is greater when the considerable gaps are filled out by other areas like customer interviews, focus groups, buzz monitoring, usability, feedback from customer facing staff etc. Additionally, while the leading edge of web analytics is taking on a new profile as it partners up with business intelligence and adopts a greater degree of technical and analytical sophistication, the one very basic area which governs all this is internal buy-in. If senior management can be helped to understand the benefit of web analytics then buy in will follow shortly after. From there the door to a greater understanding of customer engagement and the rewards therein, will be unlocked and left wide open. It is the web analyst’s job to step up to senior management and deliver not just the data and the insight but more importantly to make sure that nobody walks away without having a clear understanding of where to go next. Hugh is a member of the cScape Customer Engagement Unit and works as an independent web analytics and usability consultant. He is also author of the Web Pro Analytics column in the UK’s .NET magazine. His clients include Sky, Virgin, Yahoo!, Eurostar, Renault and Hilton.

Janet Grimes

The simple truth I have been struck by the obsession prevalent in certain parts of our industry with constantly analysing means of communication rather than the content used to communicate. To some extent this report perpetuates this problem, but not wanting to bite the hand that feeds me, I would like to spend this little bit of time that I have with you to bring us back to the what I think is the main issue underlying all ‘customer engagement’. People don’t buy communications, or relationships - they buy goods and services. It doesn’t matter how good your social media campaign is, or how engaging your email newsletter, if the thing people are buying is not well designed and presented, you are on a hiding to nothing.

All a company’s efforts should be put into ensuring that the product or service is as good as it could be What the survey does reveal to me is something that has been talked about for years and is encapsulated in the seminal Harvard Business Review article of December 2003 entitled ‘The one number you need to grow’. People trust other people.

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History gives us important perspectives on the potential disruptions heralded by social media. What does this mean for customer engagement? Simply put, it means that all a company’s efforts should be put into ensuring that the product or service is as good as it could be, that the brand authentically represents this product or service and that all the company’s communications are relevant to this. Then you stand half a chance of them recommending you to their friends, colleagues and loved ones. Does this mean we shouldn’t indulge in conversation with our customers? Of course not. What it does mean though is that the conversations we have should be led by them. The problem with relying so heavily on email newsletters, as we can see is still the case from this year’s survey (although to be fair, growth in this area is much less this year), is that the company is usually still setting the agenda. It’s very easy to bang on about yourself in an email, but don’t expect people to be interested. People tend to be most engaged when you are listening to them and talking about the things they want to talk about. So my advice would be this. Yes, engage with your customers, but don’t talk at them. Ask questions, listen to the answers and respond by improving your service. Above all, tell the truth about yourself. It sounds simple but it’s incredibly hard to do well. Janet is a member of the cScape Customer Engagement Unit and partner in The Joined Up Company, a consultancy that finds branded ideas that help clients solve business problems. Janet also has a long history in training through a number of industry organisations – the IPA, the APG and the MCCA – and has chaired the APG.

Martha Russell

Brand leaders experiment with social media in intentional, accidental and phantom communities

Customer intelligence is still the lifeblood of business.

One of the most important human signals is the indicator that immediately precedes the reorganisation of communities and their networks of relationships. Human scientists try to read these signals to make sense of political change, for disease control and for market trends. In the past year, a number of media signals have gained widespread attention. Several new technologies – especially within the domain of social and participatory media – have promised opportunities to out manoeuvre competitors, take market share and maintain business growth. History gives us important perspectives on the potential disruptions heralded by social media. Over the years, as new technologies have entered the popular use – radio, telephones, television, dial-up internet and broadband – each has provided a disruption in the existing media landscape. Experimental, specialised uses have given way to predictable results in marketing communications and advertising. With each disruption, a new equilibrium has

been established as the new media has found its place, alongside of the old, in the new media ecology. During 2009, ad agencies have trimmed their rosters. Print media has staged a disappearing act and TV production budgets have mirrored the declines in overall ad revenues. Clients and agencies have increased both time and budget spent on interactive, online and experiential marketing as they seek to define channel-specific sources of relevance for their customers and then integrate those across all channels. Customer intelligence is still the lifeblood of business. Market efficiencies exist in finding customers who are like each other and then helping them discover your brand’s desired position. When the herd instinct tips the early and late majorities, market forces can transform a business. So, it’s not surprising that marketers are trying to integrate the concepts of community into the most recent media newcomer – social media. Many are looking for best practices, so they can get up to speed efficiently. The leaders - those willing to take some risks to differentiate themselves - are trying new approaches to managing intentional social media communities, developing quick leverage responses for sudden immersion in accidental communities and inventing renewal tactics for phantom communities whose vitality has faded. Martha is Associate Director of Media X at Stanford University. Her research interests include interdisciplinary research productivity, technology transfer, advertising effectiveness and the development of new metrics for new media.

Ian Jindal

From business model to customer model During the lifetime of this annual survey (which started in 2006), customer engagement has become an orthodoxy rather than the fresh-faced neologism that forced itself into our post-Web2.0 consciousness. This year’s survey shows that digital marketers are embracing a full range of tactics and channels to attract and monetise customers. Two thirds of companies have earmarked social networking for increased investment and virtually every tool and technique at the disposal of marketers is earmarked for some form of extra attention in 2010.

The customer may be at the heart of our thinking, but one must question whether that’s a result of care and attention or because they are the bulls‑eye, our ‘target’ In this frenzy of activity, we now risk drowning out the voice of the customer. The customer may be at the heart of our thinking, but one must question whether that’s a result of

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In this new ‘me-centric’ rather than ‘brand-centric’ world people are bound to be less tolerant of unplanned, under-resourced, badly trained, disconnected, deaf-eared customer service. care and attention or because they are the bulls-eye, our ‘target’. What the customer wants is greater simplicity and they are increasingly becoming more intolerant of poor service. Yet many of the mechanisms we discuss – mail, blogging, creation of Facebook pages, Tweeting – are too often used as things we do ‘at’ a customer, rather than with them. We also need to treat the web as a key part of a customer’s engagement with a brand; it is no longer just a discount-driven order completion channel.

The ‘customer model’ will become the business model. Our new challenge is to reduce the rhetoric of persuasion, promotion and pestering and openly engage in a conversation – not simply appropriate the tools of conversation. Responsiveness, consideration, flexibility, openness and dependability will be some of the hallmarks of this new behaviour, and this will demand a level of self-knowledge as well as a more developed view of the customer. If 2009 represented the maturing of social media tools to further our business goals, 2010 will challenge us to predicate our business on a more rounded view of our customers’ multi-channel commercial behaviour: the ‘customer model’ will become the business model. Ian Jindal is a consultant, leading transformation through eCommerce in Retail and Publishing. He is the founder and Editor in Chief of Internet Retailing, created the MSc in Internet Retailing & co-founded www.europeanecommerceforum.org.

Clare O’Brien We need to treat the web as a key part of a customer’s engagement with a brand; it is no longer just a discount-driven order completion channel.

Creating business-wide content engagement strategies to increase long term customer value So much energy in online marketing and customer engagement is focused on building customer relationships for acquisition that the place where the real relationships are fixed or broken – customer services/customer support/account management/member services – is often sidelined at the planning and resourcing stage. Whatever it’s called, it’s the point at which the often expensively acquired customer is handed over to another part of the organisation. Marketers know that this is a vulnerable situation. So why not – right from the initial concept when in an ideal world a content strategy is created – collaborate to ensure that the engagement established at the beginning of a relationship with a new customer is extended to maintaining and developing that relationship into long-term value? The finding that leapt out at me from this year’s Customer Engagement Survey was the one that shouted: 61% of client and 57% of

agency respondents believe that intolerance for poor customer service would increase over the next 12 months. The company figure has almost doubled since last year while the agency statistic is 15% higher. Combine this with the finding that almost 40% of clients are looking to use customer engagement strategies to achieve long-term customer value and it begins to look obvious that customer engagement is a business-wide concern. In this new ‘me-centric’ rather than ‘brandcentric’ world people are bound to be less tolerant of unplanned, under-resourced, badly trained, disconnected, deaf-eared customer service. It’s even more unforgivable if good customer service isn’t made available right up front, online. Ten years after Godin pointed out that valuable ‘personal permission’ to market to someone could be cancelled as a result of a single incident of bad service or interaction we’re still making people hunt for contact information or returns processes, (tried that with Amazon lately?) Broadly speaking, websites are geared towards selling; they’re not set up to answer questions from existing customers. People are realistic. They don’t expect perfection. It seems that one of the lowest cost and fastest routes to satisfying existing customers is to make it really obvious where to go for help; engaging them by positioning a visible and obvious ‘complaints’ button, for instance. Use customer engagement techniques to turn complaining into a positive experience rather than intensifying their negative feelings towards a brand by hiding it away.

We need to get away from the idea that websites are all about promoting and selling. This means bringing together an organisation’s selling and the servicing objectives, skills and experience into a single web presence that’s meaningful for all visitors. More than ever we need content strategies that meet the needs of all constituents, and the organisation as a whole. Clare is a member of the cScape Customer Engagement Unit and co-founder of CDA, the content strategy and digital communications consultancy. She’s also helped found the UK Content Strategy Group and is developing CUT, a methodology for measuring and evaluating content value.

David Dodd

The era of the caged beast is over. The last 12 months saw the continued rise of a ferocious breed of beasts, unfairly caged by their owners. Or, to put it less sensationally, it’s about time we stopped treating rich content as some sort of rare and rabid animal. Video has the highest potential to engage. The survey results this year bear this out. For example, companies saw a 31% rise from last year in tangible improvements seen where

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in-site video is used. Video captivates and compels the user but it should not be fenced off in a dark corner marked ‘here be dragons’. Of course, this sounds like an amateur mistake. Why would anyone hide their most exciting content? Yet the natural step when adding new types of content is to create new spaces to match. Under this logic, users must first make a commitment to find and watch the video, then try and remember why it is relevant to them. That’s asking too much. Even when rich content is well placed within the architecture of a site, it is often still treated with the same kid gloves. How many times have you seen video which only serves to repeat the message that already appears in text or images on the page? At the other end of the scale, we shouldn’t assume that video content always has to tell an elaborate story with a sweeping narrative arc. The ability of video to explain and illustrate difficult points, whilst still keeping users engaged, is unparalleled. In the coming year, I hope that corporate and agencies act on this year’s survey results and that well-placed video that enriches the user experience and assists the customer journey will be used more frequently online. With this free-range attitude to rich content, the dark era of caged beasts will be over and a brighter, leaner animal will emerge. David develops video, audio and motion solutions across multiple sectors and a vast array of digital platforms. He is a member of the cScape Customer Engagement Unit and Director at Lightweight Media with a varied client base which includes Design Council, Barbican Centre, Carbon Trust, Vodafone and British Library.

Marc Sibley

The dawning of the age of ubiquity This September I listened to Adam Greenfield (Nokia’s Head of Design Direction for user Interface and services) prophesise a future of Ubiquitous Computing. He defined this as a post-desktop world where computers are totally integrated into everyday life and where the physical world is a searchable place like the internet is now - an ‘internet of things’.

Most of the innovative and interesting things that happened in 2009 were an exploration away from the desktop I realised that most of the innovative and interesting things that happened in 2009 in the interactive arena were an exploration away from the desktop – a move toward a more physical type of engagement. In the same way APIs and widgets find inventive ways to use and engage with the data already flowing through the web, a new generation of physical tools and interfaces are bringing the virtual back into the material world. Could this exploration be the first tentative steps towards

Ubiquitous Computing - the dawning of the Age of Ubiquity perhaps?

geographical location, the puzzle of it is to find out where that might be.

The catalyst for this transformation has been the iPhone 3GS and how it has completely altered people’s perception of what a phone can do.

Most of these excursions away from the desktop are largely niche and experimental at present – apart from mobile. Although our survey suggests that corporate brands are still tentative in their use of mobile, the mobile phone now has the combined utility of the fixed telephone, internet, computer, credit card and TV. Brace yourself. It’s going to completely revolutionise the way customers engage with brands over the next few years.

The growing number of augmented reality apps for the iPhone have started to become ubiquitous, utilising the compass, camera and GPS system within the phone to lay virtual data on top of the physical world. Wikitude AR Travel Guide enables you to hold up your phone and see Wikipedia information on the site you’re looking at, similarly ‘Nearest Tube’ from Acrossair allows you to be directed to the nearest tube station. Debenhams’ experiment of giving staff smart phones to answer customer enquiries in stores through Twitter had the ring of something approaching ubiquity. Digital agency Poke went one step further by creating a physical device that Tweets - “Baker Tweet” sits in the baker’s kitchen and informs the bakery’s customers when something is fresh out of the oven. 2009 also saw a movement away from the slickness of the touch screen to a more tactile and crafted place. Inspired by (former Nike Global Consumer Planning Director) Russell Davies’ great call to action “We’ve broken your business, now we want your machines”, The Newspaper Club is using under-utilized printing presses to create bespoke and beautiful newspapers from customers’ digital content. Then there is the GPS puzzle box, a wedding present crafted out of wood by Mikal Hart, which is set to open in one particular

Brace yourself. It’s going to completely revolutionise the way customers engage with brands over the next few years.

Marc is a designer at cScape. He has over 12 years experience working within all aspects of interactive design, including information architecture, usability and accessibility for customers such as Barclays, CIPD, Carbon Trust and CILIP.

Aurélie Pols

Full-service digital agencies, Where Art Thou? Being able to help companies define their customer engagement online requires a good understanding of their underlying financial set up, as well as an holistic view of their inherent digital communication plans. The supply side of web analytics, other than from technology providers/vendors, remains

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very fragmented with over 45% of specialist agencies showing a turnover of less than £1 million per annum and over three quarters less than £10 million. Taking all of this into account, it is not surprising that many agencies don’t know whether the worsening economic situation has put any additional emphasis on customer engagement measurement or that only a few consider their clients to actually have a customer engagement strategy. When agencies say that companies measure customer engagement to increase market share and conversion rates, one has to wonder whether the web analytics service provider/client relationship is an optimal one. Interestingly enough, in the latest survey, agencies and clients don’t seem to care as much as last year about reducing customer service costs which seems to be a missed opportunity. If agencies are just measuring what’s out there and aren’t able to pro-actively suggest new and better ways of using digital communication, the closed loop model of data driven decision making remains isolated and is not closed at all. While proving a return on investment remains one of primary barriers – on top of lack of alignment of technology, resources and processes – for investing in measuring customer engagement, the debate should not solely be limited to measurement. As long as only a small fraction of revenue generated by full service digital agencies is attributed to digital measurement and

As long as only a small fraction of revenue generated by full service digital agencies is attributed to digital measurement and they aren’t held fully accountable for their results, companies will continue to struggle with their digital communication strategy as well as its measurement.

they aren’t held fully accountable for their results, companies will continue to struggle with their digital communication strategy as well as its measurement. Aurélie is one of the most respected voices in the web analytics community worldwide and Europe’s foremost thought-leader on the subject, first as the Head of Analytics for Belgium’s OX2 and then as the Director of Analytics for LBi’s global web analytics efforts before joining Web Analytics Demystified.

Zia Zareeem-Slade

To boldly go As I share my thoughts on customer engagement, I wonder if I should jump on the ‘brandwagon’ and try to express myself via a Tweet or a rant on Facebook. I’ll be in good company; according to this year’s Customer Engagement Survey, 44% of companies will be using social media to gain user ratings and feedback. Although there is clearly the sense that social tools have tremendous potential to engage customers, the survey also shows a hesitation to commit to them across organisations. While over half of the companies surveyed claimed to have specific teams dedicated to social media, their agencies were slightly less sure

of this resource. Organisational incoherence, culture or lack of will is still a major barrier. The overall impression is that companies are experimenting with social media rather than embracing it wholeheartedly. Because of this, better understood media tactics like email newsletters are still top of the pile although the percentage growth this year has of this category is far less than last year. That’s a huge step back. Equally, the comparatively smaller adoption of social networking techniques and technologies in internal environments is interesting given that two-way communication with one’s staff during recessionary times is particularly important to keep them motivated. Hopefully, we will see an improvement next year. From the ivory towers downwards, there has to be a corporate mind shift and a relinquishing of control to engage both staff and customers. If you want people to truly engage, you have to let them talk and you’ve got to actively listen. Digital democracy will allow brands to reap benefits; just look how it’s paid off for Dell. If all of the companies on the social media fence move from experimentation to a full-blown push in the coming months, next year’s survey results could be even more interesting than this year’s. Zia has over 10 years of experience in creating digital experiences. She worked at MFI UK as the Head of eCommerce. Zia is now Head of Experience Planning at EMC Consulting (formerly Conchango), working with clients such as Virgin Media, John Lewis, Virgin Atlantic, Tesco, T-Mobile and B&Q.

Steven Woods

Experiments with the wisdom of crowds Customer engagement is at an interesting transition point. This year’s survey results indicate that there is acknowledgement that the crowds have wisdom as evidenced by the strong adoption of social networks and user ratings, we well as mechanisms for feedback on product development, innovation and customer support. The comparatively smaller adoption of these techniques and technologies in internal environments shows that the sense of their value is truly around broader engagement, not just communication. However, although there is clearly the sense that social tools have tremendous potential, the survey also shows a hesitation to truly engage with them across the organisation. When pushed for tangible benefits, better-understood media types like email newsletters score more highly. There is also a sense that social media is being experimented with and as such very few organisations have either hired extra staff or dedicated a social media budget. There is a clear sense though, from the dominance in web analytics as a method of gathering customer intelligence and that the

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Digital behaviour patterns of online buyers are seen as the best source of marketing insights. digital behavior patterns of online buyers are seen as the best source of marketing insights. As our ability to interpret the behaviour we see in social media into similar insights increases, we will almost certainly see organisations investing more time and resource into it as an activity. 2010 will certainly be an interesting year for marketers and their customers alike.

important changes. While attributes of an engaged customer were largely based on their readiness to convert, participation in online communities or support groups is gaining in importance. Email largely remains the method of choice to keep customers engaged while investments in social networks, videos and micro-blogging activities are likely to increase.

Steve is the CTO of Eloqua and author of the new book Digital Body Language – Deciphering Customer Intentions in an Online World.

As predicted, resources (budgets, staffing and time) remain an issue for agencies and their clients. But when compared to the 2009 results, the perceived increase in organisational incoherence and lack of a business case as well as the growing lack of skills, experience and understanding is interesting. At the same time, technology is less of an issue and focus is shifting from short term to longer term objectives. Those results correlate with the ‘Web Analytics Maturity Model’ assessment that management, governance and adoption are the most important success factors, while the tools are one of the least important. That is, which tools you use has less to do with your success than change management toward a customer engagement culture, the objectives you set and how you execute toward them.

Stéphane Hamel

Tip: engage management into customer engagement In last year’s survey, we saw that customer engagement was perceived as important, yet few companies had defined a strategy. I opined then that organisations with a strong and genuine customer focus might be able to face the economic troubles more easily and get out of it with a stronger position than their competitors. The economy remains harsh, but perceived importance of customer engagement is even stronger than last year. Year-on-year comparisons, show that strengthening the emotional investment adapting to the increased importance and power of customers and gaining more customer insight are among the most

Over 60% of surveyed agencies and organisations say their customer engagement strategies have been successful. This reinforces the fact that a longer term, a more strategic approach towards buyer/seller relationships might be more profitable than solely focusing on short term conversions. Stéphane is a leading voice for online analytics, helping businesses understand the value of performance measurement and process optimisation.

Lucy Conlan

• ‘An exclusive invitation’ (the Roundhouse) • ‘Enjoy a £9 adventure’ (National Express) • ‘Cracking discount on nut trees’ (Dobies of Devon) • ‘Get them while they’re still hot’ (First Direct)

Planning surprises Although this may sound like an oxymoron, you can plan to surprise and delight your customers. People’s memories can be fickle and we tend to polarize what we remember of the past – the best of times and the worst. I would recommend increasing the number of positive memories to your customers through email.

The thing about surprise is to keep the suspense as long as possible.

As this year’s survey results continue to show, email newsletters can be the most powerful tool in driving qualified traffic to your website. With the rise in the volume of email traffic, standing out can be difficult. However, if you have a dedicated newsletter with the same subject line each month, gaining stand out may be easier than you think. A surprise may take the form of wishing someone happy birthday, prompting for their opinion, reminding them that Valentine’s day is around the corner or a teasing line such as ‘We never thought it would happen...’. Subject lines that have stopped me in my tracks before have been: • ‘Feed the Birds Day is here’ (RSPB) • ‘Why.....................’ (my cousin Marie Markey) • ‘What is your song of the decade?’ (Absolute Radio)

The thing about surprise is to keep the suspense as long as possible. I recently received an email from Dell with the subject line ‘Win VIP tickets for the 2009 MTV European Music Awards!’ I was intrigued enough to open the email which was clear and punchy, but the real surprise came when I clicked through on the link ‘Join the World’s Largest Online Choir’. To enter the competition, you had to record your own version of ‘Lollipop’ and your rendition would be entered into a video wall. The sound was synchronised so that you were singing along at the same time as everyone else the combined impact of the individual and the group was immediately apparent (http://ema.mtv.co.uk/ amplichoir). The competition is now closed but you can still enter your recording – Dell are really capitalising on their surprising content. In essence, shake things up a bit; permeate your standard email/online output in a way that makes your customer stop and think about you in a positive way and enjoy the ‘feel good’ factor. Lucy is a digital marketing consultant and member of cScape’s Customer Engagement Unit. Lucy’s direct marketing background was gained in the charity and cultural sector, having worked at the Barbican, English Heritage, British Red Cross and the Natural History Museum.

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The new forms of online social connectedness that we can see facilitated through tools like Twitter have spilled out into the ‘real world’. Becky Caroll

Customer engagement key ingredient: the human factor What a difference a year makes! In last year’s Annual Customer Engagement Survey, companies were just starting to embrace new ways to create engagement with their customers. Each new foray into the ‘social media space’ was hailed as ground-breaking and innovative. Fast forward to this year’s fourth Annual Customer Engagement Survey. Companies and their agencies have been busily putting up Facebook fan pages and starting Twitter accounts so they can be found ‘in social media’. There has been some impact of this communication with customers online. Companies state in the survey that their engaged customers are most likely to be recommenders to others (online influence is high), they are participating in more online communities and forums, and they are regularly giving feedback to the company on its products and services. All of this is good news as the momentum shifts even further towards prioritising the customer and the value they bring to the company. However, it is now time to take

this approach to the next level and create a cohesive strategy across the organisation. Social media has brought many new customer touch-points and with those come opportunities for customer satisfaction – or failure. Perhaps now we have too many choices for customers as companies have created these touch-points often just to be ‘available’ in social media. These critical interactions must be co-ordinated with the company’s other areas, including customer service. In fact, intolerance of poor customer service and a desire for simplicity may be driving customers to seek fast relief by complaining in social media channels. This may provide fast relief for customers but headaches for an uncoordinated company experience. Now more than ever, the process of engaging companies will move beyond organisational silos. Companies will use their understanding of customer needs to find ways to meet them in a relevant way - through whichever touch point the customer chooses to use. They will move from ‘influencing customers’ to ‘customer collaboration’ through ongoing and meaningful discussions. These activities, when coupled with proactive customer listening, will deepen customer relationships over time and hence customer loyalty and value. Becky is the founder of Customers Rock!, a strategic consultancy focused on engaging customers. Clients have included EA, HP, Fujitsu, Verizon, and Ford. Previously, Becky served as Director of Social Media for Brickfish and as a Senior Consultant with industry-leading Peppers and Rogers Group. She also worked at HP for 14 years as Director of Marketing, UK.

Richard Sedley

The death of digital Back in January 2006 when we setting up the Customer Engagement Unit I wrote a discussion paper called ‘The death of digital’. It was based on the recognition that digital was becoming increasingly central to effective business activity, so much so in fact that pretty soon all business would become digital thus rendering the distinction between digital and non-digital irrelevant. So no need to even mention digital – hence its death.

Intolerance of poor customer service and a desire for simplicity may be driving customers to seek fast relief by complaining in social media channels.

I was both so right and so wrong in equal measure. What I had failed to grasp was the extent to which the social tools being developed would expedite the desire for face-to-face interaction. The new forms of online social connectedness that we can see facilitated through tools like Twitter have spilled out into the ‘real world’ in the form of conferences, Tweetups and other networking soirées. As the old forms of community in western societies were fragmenting and becoming redundant, there were new social networks connecting individuals in physical ways not just virtual. Not surprisingly businesses want, and indeed need, a piece of this action.

A key part of the digital business strategies we develop for our clients, now rests on the integration of face-to-face networking, whether internal (employees/suppliers) or external (brand/customers). The 61% of companies surveyed in this report who intend to increase investment in social networks and 27% & 44% who intend to increase investment in on-site branded communities and micro-blogging respectively, would do well to consider integrating activities beyond online if these investments are to reap maximum reward. What I had grasped more successfully four years ago was a shift from digital being a desktop PC paradigm. In just the next couple of years we’ll be seeing the proliferation of many different types of digital screen. We already have digital readers making an impact into the book market. Touch-screen phones are proliferating and before long digital screens will be large enough, flat enough and flexible enough to transform any surface into a read/ write interface. Framed in this context the fact that only 6% of companies say that they have integrated mobile seamlessly into their customer engagement strategies seems pitiful. With potentially every surface an opportunity to connect, interact and engage, ‘the death of digital’ poses some incredible business opportunities for next decade. Richard is Director of the cScape Customer Engagement Unit. He is the author of Winners and Losers in a Troubled Economy: How to Engage Customers Online to Gain Competitive Advantage. Richard is also Course Director for Social Media at the Chartered Institute of Marketing.

Survey promotion partners

Making the most of your potential connections, Avantless enables business development strategies in the service industry through innovation. Changes in business development and customer environments are root causes for companies to accept customers as deeper influencers at the heart of new value creation processes. New paths emerge driven by open networks and transparent connectivity where users, service/product providers and social agents create new models of collaboration. Avantless aims for leveraging authenticity into service innovation as new growth strategies for differentiation and success in the network economy. www.avantless.com

Foreplay is a digital engagement agency located in SĂŁo Paulo, Brazil, the financial heart of Latin America. Foreplay believes in the power of providing unforgettable experiences to consumers, instead of interruptive messages that add to the cluttered environment we all live in. We adopt an holistic approach, centered on leveraging customer intelligence and identifying their real needs to provide perceived value across digital channels. This is achieved by understanding the content, entertainment, media and purchasing habits of key audiences and by crafting shareable messages and experiences that are meaningfulÂ and productive to companies and consumers alike. Foreplay believes in the power of big dreams supported by passionate execution. www.foreplay.com.br

The value of the report This is the fourth year of the Annual Customer Engagement Report and, as usual, it provides some very useful insights into what to expect in terms of future engagement trends. For example, the fact that sensitivity to price is less of an issue for both companies and agencies in 2010 than in 2009 when we are still in recession is just one of the many interesting nuggets that will help you plan for 2010 and beyond. That 2010 will see the continued rise and rise of social media confirms predictions but what is surprising is a number of major brands have still to realise its full potential. If you have

a brand that is in the public eye it’s almost certain that your customers will be discussing it online anyway, regardless of whether you have decided to join the engagement party. According to Technorati, there are already almost 60 million blogs and about 100,000 new ones are being created every day, not to mention comparison sites, video logs, podcasts and photo distribution outlets like Flickr. If you get involved, you can help shape the debate, benefit from involving your customers in discussions on future products and services, demonstrate Corporate Social Responsibility and show the ‘human face’ of your company.

Using specialist companies to help you with engagement can not only help you shape your brand online and increase loyalty, but can also calm any corporate fears that may accompany forays into unknown digital territory. cScape have always led the way not only as thought leaders in online customer engagement but in combining this with creative and technical engagement campaigns that deliver proven and measurable results. So if, as the survey suggest, your company lacks the internal resources, skills and understanding to effectively engage your customers through social media and other means, it’s time to call in the experts! Michael McClary Web Agency Platform Strategy Advisor Microsoft www.microsoft.com

Repeated interactions that strengthen the emotional, psychological and physical investment a customer has in a brand (product or company). Definition of customer engagement