Customer engagement seen as key to survival

Only half of companies agree that the global economic crisis has caused them to place greater focus on customer engagement, according to the third annual 'Online Customer Engagement Report' from cScape and E-Consultancy.

The report examines the likely impact of a worsening economic environment on customer behaviour and psychology. Apart from preparing for greater price sensitivity, the report notes that many companies are also expecting a focus on quality, a desire for simplicity, and an intolerance of poor customer service to be among the most prominent types of customer behaviour during 2009.

According to Richard Sedley, customer engagement director for cScape, "Those organisations that are able to grasp the coming changes in customer behaviour and psychology, while also placing an emphasis on value, will be able to reap the rewards of customer engagement and will be best placed to emerge as winners from the current economic crisis. However, those that can't do so have a lot to lose."

The research also examined initiatives which have helped companies deepen their relationships with customers, and the areas in which companies say they will be increasing investment during 2009.

Interestingly, e-mail newsletters were found to be the marketing tactic most likely to have driven a tangible improvement in customer engagement, with 59% of respondents saying that their organisations expect to increase spending in this area during 2009.

Areas associated with Web 2.0 and social media (such as user ratings and feedback at 41%, user-generated content at 37%, blogging at 36%, and brand presence on social networks at 36%) are also expected to attract significant investment.

Despite the relative novelty of micro-blogging utilities (such as Twitter), 7% of companies say they have improved their customer engagement through this channel.

Linus Gregoriadis, head of research for E-Consultancy, noted: "Organisations are now setting aside budget for Web 2.0-type activities because they have garnered tangible benefits rather than because they simply want to be on the cutting edge for the sake of it. More companies are viewing tactics such as blogging, user reviews, and on-site video in the context of a broader customer engagement strategy, and are pulling only those levers which are most appropriate for their business model and customers."

But while the importance of customer engagement is widely acknowledged, the research found that fewer than half of the companies surveyed (45%) have a defined customer engagement strategy in place.

The survey also asked respondents to choose up to five behaviours or attributes which they thought their organisations would need to address in the next year, and the most significant behaviours were ranked as follows:

1. Sensitivity to price (48%);
    
2. Focus on quality (45%);
    
3. Desire for simplicity (36%);
    
4. Intolerance of poor customer service (32%);
    
5. Prolonged decision-making (31%);
    
6. Lack of supplier or brand loyalty (30%);
    
7. Focus on short-term needs (27%);
    
8. Purchase of luxury and indulgent items (9%);
    
9. Sacrifice (family comes first, etc.) (7%);
    
10. Buying own-brand products (7%);
     
11. Buying and selling second-hand (5%).

The full report has been made available for download from E-Consultancy's web site - click here (free registration required).