Benefits of a customer engagement strategy

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By: Wise Marketer Staff |

Posted on December 7, 2009

While customer engagement is not a 'cure-all' for a troubled economy, or even for today's rapid changes in the business environment, what it does offer is an opportunity to reap the benefits of greater predictability in customer relationships, according to a study by E-Consultancy and cScape.

The research, detailed in the '2010 Online Customer Engagement Survey Report', was conducted to provide a benchmark for marketers who want to assess their customer engagement strategy, and found that the number of marketers who consider customer engagement to be essential to their organisation has continued to grow slightly.

"What I feel this year's survey most reveals is the extent to which the past 12 months have changed how we will do business in the future," said Richard Sedley, customer engagement director for cScape. "In many ways this was to be expected. The world has just experienced the toughest economic environment since the 1930s and any company not trying to change the way it operates is likely to be suffering the consequences already."

But how to change - and into what - have been the hardest questions for many organisations. Predictably, social media (such as Facebook) and micro-blogging tools (such as Twitter) are the main technologies that marketers currently see as being worthy of increased attention and financial investment.

This trend is likely to manifest itself not only in terms of greater marketing investment, but also in the way it impacts the internal structure and culture of organisations of all sizes.

Key findings regarding customer engagement strategy included:

  • The proportion of company respondents who regard customer engagement as "essential" for their organisations has increased to 55%, up from 52% last year and 50% two years ago. The number of agency respondents who regard this as essential for their clients has jumped significantly from 43% to 55%.
  • 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".
  • 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 area of increased interest since last year is for 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 the previous year, respondents reported 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.

Findings regarding consumer engagement tactics, behaviour and attitudes included:

  • As in the previous 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.
  • More than half of companies (58%) are still planning to increase their investment in email newsletters over the course of the next year.
  • 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 the previous year's study.

Findings regarding Enterprise 2.0 developments (including product development and innovation, customer service enhancements, and employee engagement) included:

  • Just over one-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 companies 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 (both 32%) for internal communications.
  • 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.
  • 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.
  • Organisations 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.
  • Lack of resources (i.e. 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.
  • The second biggest problem 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.

Findings regarding the mobile channel included:

  • 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.
  • Only a small number of organisations (6%) say they have a customer engagement strategy which seamlessly embraces mobile marketing. 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%).
  • 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.
  • One-third (34%) of companies are planning to create applications for mobile phones, in addition to the 16% who say they are already doing 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 user-generated content or location-based marketing are also in the minority.
  • Companies generally attribute their lack of inertia when it comes to integrating the mobile channel to a lack of resources (51%), although there are other widely cited reasons including lack of skills / experience / understanding, and lack of a sound business case.

Findings regarding metrics, mapping and measurement included:

  • Web analytics play a pivotal role in gathering intelligence, and over half of companies surveyed (51%) say this is useful for engaging customers online.
  • Online customer surveys are thought to be useful by just over a third of companies surveyed (34%). Customer journey analysis is said to be useful by 30% of companies.
  • 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.
  • Fewer companies say that they are "very advanced" at mapping their customer touch points than in previous years. Only 3% say that they are very advanced at mapping their customer touch-points, compared to 6% two years ago. More companies say they are "not very advanced"; 40% compared to 36% last year and 35% two years ago.
  • Mapping the customer experience across all touch points has a tangible impact on the ability to engage with customers. Of the companies who said their customer engagement strategy has been successful, 46% say they are "very advanced" or "quite advanced" at mapping their customer touch-points. For the companies who have not been successful, only 14% are quite advanced and none are very advanced at this kind of mapping.

"If I were to make any recommendation based on these results, it would be that organisations need to focus on quality, simplicity and customer service in the near term," concluded Sedley. "These are three key areas that can foster the customer's understanding of value, as well as an emotional connection with the brand."

The full 56-page report containing detailed findings, expert analysis, and recommendations can be purchased directly from e-Consultancy - click here.

For additional information:
·  Visit cScape at
·  Visit e-Consultancy at