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Customer engagement (CE) is an effect, a reaction, a connection, a response and/or an experience of customers with one another, with a company or a brand. The initiative for engagement can be either consumer- or company-led and the medium of engagement can be on or offline.
Customer engagement begins with a connection between a business communication and an external stakeholder (Sashi, 2012). The connection can be a reaction, an interaction, an effect, or an experience that may or may not be sensorial. The term can also be used to define customer to customer correspondence regarding a communication, product, service, or brand. However generally the latter dissemination is provoked by an initial business to consumer interaction initially resonated at a subconscious level (Ryan & Jones, 2011).
In the past customer engagement has been generated irresolutely through television, radio, media, outdoor advertising, and various other touchpoints ideally during peak and/or high trafficked allocations. However, the results of pure customer engagement were hardly measurable. The only conclusive results of campaigns were sales and/or return on investment figures. In more recent times the internet has significantly enhanced the processes of customer engagement, in particular, the way in which it can now be measured in different ways on different levels of engagement.
Since the world has reached a population of over 3 billion internet users (Internet World Stats, 2016), it is conclusive that society's interactive culture is significantly influenced by technology (Sashi, 2012). Hence, "being connected has become fundamental to our existence", as author of Build For Change (2014), Alan Trefler has succinctly put it. Therefore, connectivity is bringing consumers and organisations together and so it is critical for companies to take advantage and focus on capturing the attention of and interacting with well informed, business savvy consumers in order to serve and satisfy (Dholakia & Firat, 2006; Sashi, 2012). Connecting with customers establishes exclusivity in their experience, which potentially will increase brand loyalty, word of mouth, and provides businesses with valuable consumer analytics, insight, and retention (eMarketer, 2013; 2016). Customer engagement can come in the form of a view, an impression, reach, a click, a comment, or a share, among many others. These are ways in which analytics and insights into customer engagement can now be measured on different levels. All of which are information that allows businesses to record and process results of customer engagement.
Taking into consideration the widespread information and connections bombarding consumers, the way to develop penetrable customer engagement is to proactively connect with customers by listening (Trefler, 2014). Listening will empower the consumer, give them control, and endorse a customer centric two-way dialogue (Dholakia & Firat, 2006; eMarketer, June 2015). This dialogue will redefine the role of the consumer as they no longer assume the end user role in the process (Dholakia & Firat, 2006). Instead of the traditional transaction and/or exchange, the concept becomes a process of partnership between organisations and consumers (Dholakia & Firat, 2006). Particularly since the internet has provided consumers with the accumulation of much diverse knowledge and understanding, consumers now have increasingly high expectations, developed stronger sensory perceptions, and hence have become more attracted to experiential values (Trefler, 2014; Dholakia & Firat, 2006). Therefore, it would only be profitable for businesses to submit to the new criteria, to provide the opportunity for consumers to further immerse in the consumption experience (Sashi, 2012). This experience will involve organisations and consumers sharing and exchanging information, which will generate increased awareness, interest, desire to purchase, retention, and loyalty amongst consumers, evolving an intimate relationship (Sashi, 2012). Significantly, total openness and strengthening customer service is the selling point here for customers, to make them feel more involved rather than just a number (Trefler, 2014). This will earn trust, engagement, and ultimately word of mouth through endless social circles (Trefler, 2014). Essentially, it is a more dynamic and transparent concept of customer relationship management (CRM) (Trefler, 2014).
Furthermore, the business savvy consumer will already have a fair idea of what they want and how they want it; hence it is up to businesses to fulfil high expectations and facilitate flawless experiences on mutual terms (Ryan & Jones, 2011). In particular, today's consumers thrive on the ability to purchase from anywhere at any time in a seamless manner (Trefler, 2014). Therefore, the more successful the customer engagement, the more sustainable the relationship will be, thus evolving heightened brand loyalty (Sashi, 2012). That is not to say that these expectant consumers are easily engaged; with everything being at their fingertips perceptions become desensitised. Touchpoints must be coherent, uninterrupted, and evoke rich, sensorial experiences to capture consumers.
Additionally, organisations should amplify communications consistently across multiple channels to further engage and enhance the service and/or relationship. According to the authors of Best Digital Marketing Campaigns In The World (2011), Ryan and Jones, online consumer to consumer communications discuss and validate information and products in organic conversations and on branded company pages. Hence it would be in the business' best interest to streamline via omnichannel campaigns to extend and further validate the customer engagement and actively orchestrate consumer partnerships through multiple channels (Dholakia & Firat, 2006).
In summary, customer engagement is a connection between consumers and organisations via various communication efforts, established by the organisation. Customer engagement is critical for the survival of firms in today's technologically connected society (Trefler, 2014). To adapt to this progressive customer environment will mean communicating directly with customers so that they are involved in the process, giving them control in exchange for their attention, to increase brand awareness and loyalty, and to earn word of mouth. These exchanges will increase the success of marketing campaigns, add value to the brand, and/or product or service, and enhance customer service.
Customer engagement has been discussed widely, numerous high-profile conferences, seminars and roundtables have either had CE as a primary theme or included papers on the topic.
Customer engagement marketing places conversions into a longer term, more strategic context, and is premised on the understanding that a simple focus on maximising conversions can, in some circumstances, decrease the likelihood of repeat conversions  CE aims at long-term engagement, encouraging customer loyalty and advocacy through word-of-mouth. Thought similar, customer engagement and customer commitment are distinct constructs.
In store, or offline customer engagement is best leveraged by associates’ extensive brand and product knowledge, and the digital access that supports it. Equipped with a tablet that also delivers store and sales training, educated on-floor associates become brand ambassadors who can show consumers high-definition product imagery and video to help cross-sell, up-sell, grow relationships and foster loyalty.
Online customer engagement is qualitatively different from offline engagement as the nature of the customer’s interactions with a brand, company and other customers differ on the internet. Discussion forums or blogs, for example, are spaces where people can communicate and socialise in ways that cannot be replicated by any offline interactive medium. Customer Engagement marketing efforts that aim to create, stimulate or influence customer behaviour differ from the offline, one-way, marketing communications that marketers are familiar with. Although customer advocacy, for example, has always been a goal for marketers, the rise of online user generated content can take advocacy to another level.
The concept and practice of online customer engagement enables organisations to respond to the fundamental changes in customer behaviour that the internet has brought about, as well as to the increasing ineffectiveness of the traditional 'interrupt and repeat', broadcast model of advertising. Due to the fragmentation and specialisation of media and audiences, as well as the proliferation of community- and user generated content, businesses are increasingly losing the power to dictate the communications agenda. Simultaneously, lower switching costs, the geographical widening of the market and the vast choice of content, services and products available online have weakened customer loyalty. Enhancing customers' firm- and market- related expertise has been shown to engage customers, strengthen their loyalty, and emotionally tie them more closely to a firm.
Leveraging customer contributions is an important source of competitive advantage – whether through advertising, user generated product reviews, customer service FAQs, forums where consumers can socialise with one another or contribute to product development.
Amazon re-branded into 'serving the world's largest engaged online community', the World Federation of Advertisers (WFA) has created a 'Blueprint for Consumer-Centric Holistic Measurement' and the Association of National Advertisers (ANA), American Association of Advertising Agencies (AAAA) and the Advertising Research Foundation (ARF), have put together the 'Engagement Steering Committee' to work on the customer engagement metric. Nielsen Media Research, IAG Research and Simmons Research are also all in the process of developing a CE definition and metric.
Online customer engagement refers to:
- A social phenomenon enabled by the wide adoption of the internet in the late 1990s and taking off with the technical developments in connection speed (broadband) in the decade that followed. Online CE is qualitatively different from the engagement of consumers offline.
- The behaviour of customers that engage in online communities revolving, directly or indirectly, around product categories (cycling, sailing) and other consumption topics. It details the process that leads to a customer’s positive engagement with the company or offering, as well as the behaviours associated with different degrees of customer engagement.
- Marketing practices that aim to create, stimulate or influence CE behaviour. Although CE-marketing efforts must be consistent both online and offline, the internet is the basis of CE-marketing.:72,81
- Metrics that measure the effectiveness of the marketing practices which seek to create, stimulate or influence CE behaviour.
Through evidence of research, various definitions have translated different aspects of customer engagement. According to Forrester Consulting's research in 2008, it has defined customer engagement as "creating deep connections with customers that drive purchase decisions, interaction, and participation, over time" (Sashi, 2012). Meanwhile, studies by the Economist Intelligence Unit result in defining customer engagement as, "an intimate long-term relationship with the customer" (Sashi, 2012). Both of these concepts prescribe that customer engagement is attributed by a rich association formed with customers. Additionally, Hollebeek (2011) derives aspects of relationship marketing and service-dominant perspectives to loosely define customer engagement as "consumers' proactive contributions in co-creating their personalized experiences and perceived value with organizations through active, explicit, and ongoing dialogue and interactions". Hollebeek's definition tends to highlight the physical activities expected of consumers involved in the customer engagement process. In the book, Best Digital Marketing Campaigns In The World (2011), authors Ryan and Jones define customer engagement as, "mutually beneficial relationships with a constantly growing community of online consumers". Evidently Ryan and Jones advocates progressive connections as more consumers transact online. Furthermore, an empirical study on customer brand engagement interprets a succinct definition that can be adjusted to loosely encompass customer engagement as a whole. This study by Chan et al. stipulates, "the level of a customer's cognitive, emotional, and behavioural investment in interactions with communications" is a more appropriate definition of customer engagement cited within Hollebeek's (2011) research. Chan et al. provides a broader perspective of customer engagement that suggests there are a range of forms of engagement in response to communications of an organisation. In addition, a collection of customer engagement definitions reveals, "the consumer's intrinsic motivation to interact and cooperate with community members" from Algesheimer et al. cited by Cheung, Shen, Lee, and Chan (2015). This definition describes a consumer's reaction upon engagement, which is an instinctive impulsion to reciprocate. In a study by Bowden in 2009, Cheung et al. cites, "a psychological process that leads to consumer loyalty to the service brand" (2015). Bowden's research describes a consumer's pre-purchase mechanisms that will connect with a brand. Lastly, one of many other definitions of customer engagement as defined by Cheung et al., "the level of a customer's physical, cognitive, and emotional presence in connections with a particular online social platform", also cited by Cheung et al. (2015). A concept that encompasses a consumer's reaction categorically in terms of engagement, however only with regard to an online community. The various definitions of customer engagement are diversified by different perspectives and contexts of the engagement process. These are determined by the brand, product, or service, the audience profile, attitudes and behaviours, and messages and channels of communication that are used to interact with the customer.
In March 2006, the Advertising Research Foundation announced the first definition of customer engagement the first definition of CE at the re:think! 52nd Annual ARF Convention and Expo: "Engagement is turning on a prospect to a brand idea enhanced by the surrounding context." However, the ARF definition was criticized by some for being too broad.
Since 2009, a number of new definitions have emerged in the literature. In 2011, Hollebeek defined a customer's engagement (CE) with a specific brand as "the level of a customer’s cognitive, emotional and behavioral investment in specific brand interactions," and identifies the three CE dimensions of immersion (cognitive), passion (emotional) and activation (behavioral).:555–573 Also in 2011, Brodie et al. defined CE as "a psychological state that occurs by virtue of interactive, co-creative customer experiences with a particular agent/object (e.g. a brand)". The authors posited CE occurs under a specific set of context-dependent conditions generating differing CE levels. They also stated CE exists as a dynamic, iterative process that co-creates value, and that CE is a multi-dimensional concept subject to a context- and/or stakeholder-specific expression of relevant cognitive, emotional and/or behavioral dimensions.:252–271
CE-marketing is necessitated by a combination of social, technological and market developments:
1. Businesses are losing the power to dictate the communications agenda:,:98–99 Locke et al. 2001 The effectiveness of the traditional 'interrupt and repeat' model of advertising is decreasing. In August 2006, McKinsey & Co published a report which said that by 2010 traditional TV advertising will only be one-third as effective as it was in 1990.:1–13 This is due to:
• Customer audiences are smaller and specialist: The fragmentation of media and audiences and the accompanying reduction of audience size:1–13 have reduced the effectiveness of the traditional top-down, mass, 'interrupt and repeat' advertising model. The adoption of new media. Forrester Research's North American Consumer Technology Adoption Study shows people in the 18-26 age group spending more time online than watching TV.:73:166 In response to the fragmentation and increased amount of time spent online, marketers have also increased spending in online communication. ContextWeb analysts found marketers who promote on sites like Facebook and New York Times are not as successful at reaching consumers while marketers who promote more on niche websites have a better chance of reaching their audiences.
• Customer audiences are also broadcasters: A company's position is no longer just inside consumers' minds. As they increasingly speak their minds with the power for circulation and permanence of CGM, businesses lose the power of shouting over everyone else. Instead of trying to position a product using a couple of static messages that will themselves become the subject of conversation amongst a target market that has already discussed, positioned and rated the product, companies must join in. This also means that consumers can now choose not only when and how but, also, if they will engage with marketing communications per Huffman.:39 they can rely on CGM. In addition new media themselves provide consumers with more control over their advertising consumption.
2. Decreasing brand loyalty: The lowering of entry barriers, such as the need for a sales force, access to channels and physical assets, and the geographical widening of the market due to the internet have brought about increasing competition. In combination with lower switching costs, easier access to information about products and suppliers and increased choice, brand loyalty is hard to achieve.
The increasing ineffectiveness of TV advertising due to the shift of consumer attention to the internet, the ability, within new media, to control advertising consumption and the decrease in audience size is bringing about a progressive shift of advertising spending online.
The proliferation of media that provide consumers with more control over their advertising consumption (subscription-based digital radio and TV for example) and the simultaneous decrease of trust in advertising and increase of trust in peers:98–99 Levine et al. 2001:xxiii point to the need for communications that the customer will desire to engage with. Stimulating a consumer’s engagement with a brand is the only way to increase brand loyalty and, therefore, "the best measure of current and future performance".
CE is the solution that marketers have devised in order to come to terms with the social, technological and market developments outlined above. In a nutshell, it is the attempt to create an engaging dialogue with target consumers and stimulate their engagement with the brand. Although this must take place consistently both on and off-line, the internet is the primary vehicle for doing so.
CE marketing begins with understanding the internal dynamics of these developments and, especially, the behaviour and engagement of consumers online. That way, business opportunities can be identified. Rob Passikoff suggested in 2006 that consumer-generated media should play a massive role in our understanding and modelling of engagement. The control Web 2.0 consumers have gained must, and will be, quantified through 'old school' marketing performance metrics.
Business to business context
Customer Engagement in a B2B (business to business) marketing context would typically include a collection of the following marketing programs:
- Customer Advisory Board or Council
- Customer Reference Program
- Executive Sponsor Program
- Customer Loyalty Program
- Customer Community or Forum
Online inter-customer engagement is a recent social phenomenon that came about through the wide diffusion and adoption of the internet in western societies during the late 1990s. Although offline CE predates online CE, the latter is a qualitatively different social phenomenon unlike any offline CE that social theorists or marketers are familiar with.
People engage online in communities that do not necessarily revolve around a particular product, but serve as meeting or networking places, for instance on MySpace. The people in one's MySpace friend's list do not necessarily all share a single consumption habit, although they often do.
People's online engagement with one another has brought about both the empowerment of consumers and the opportunity for businesses to engage with their target customers online. A 2011 market analysis revealed that 80% of online customers, after reading negative online reviews, report making alternate purchasing decisions, while 87% of consumers said a favorable review has confirmed their decision to go through with a purchase.
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CE behaviour became prominent with the advent of the social phenomenon of online CE. Creating and stimulating customer engagement behaviour has recently become an explicit aim of both profit and non-profit organisations in the belief that engaging target customers to a high degree is conducive to furthering business objectives.
Shevlin's definition of CE is well suited to understanding the process that leads to an engaged customer. In its adaptation by Richard Sedley the key word is 'investment'."Repeated interactions that strengthen the emotional, psychological or physical investment a customer has in a brand."
A customer's degree of engagement with a company lies in a continuum that represents the strength of his investment in that company. Positive experiences with the company strengthen that investment and move the customer down the line of engagement.
What is important in measuring degrees of involvement is the ability of defining and quantifying the stages on the continuum. One popular suggestion is a four-level model adapted from Kirkpatrick's Levels:
- Click - A reader arrived (current metric)
- Consume - A reader read the content
- Understood - A reader understood the content and remembers it
- Applied - A reader applies the content in another venue
|Degrees of Engagement||Low||Medium||High||Highest|
|Adoption||Collaborative Filtering||Content Creation||Social|
|Bookmarking, Tagging, Adding to group||Rating, Voting, Commenting, Endorsing, Favouritising||Upload (User Generated Content), Blogging, Fan community participation, Create mash-ups, Podcasting, Vlogging||Adding Friends, Networking, Create Fan Community|
The following consumer typology according to degree of engagement fits also into Ghuneim's continuum: Creators (smallest group), Critics, Collectors, Couch Potatoes (largest group).
Engagement is a holistic characterisation of a consumer's behaviour, encompassing a host of sub-aspects of behaviour such as loyalty, satisfaction, involvement, Word of Mouth advertising, complaining and more.
- Satisfaction: Satisfaction is simply the foundation, and the minimum requirement, for a continuing relationship with customers. Engagement extends beyond mere satisfaction.
- Loyalty - Retention: Highly engaged consumers are more loyal. Increasing the engagement of target customers increases the rate of customer retention.
- Word of Mouth advertising - advocacy: Highly engaged customers are more likely to engage in free (for the company), credible (for their audience) Word of Mouth advertising. This can drive new customer acquisition and can have viral effects.
- Awareness - Effectiveness of communications: When customers are exposed to communication from a company that they are highly engaged with, they tend to actively elaborate on its central idea. This brings about high degrees of central processing and recall.
- Filtering: Consumers filter, categorise and rate the market from head to tail, creating multiple, overlapping folksonomies through tagging, reviewing, rating and recommending.
- Complaint-behaviour: Highly engaged customers are less likely to complain to other current or potential customers, but will address the company directly instead.
- Marketing intelligence: Highly engaged customers can give valuable recommendations for improving quality of offering.
The behavioural outcomes of an engaged consumer is what links CE to profits. From this point of view,
"CE 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." Simply attaining a high level of customer satisfaction does not seem to guarantee the customer's business. 60% to 80% of customers who defect to a competitor said they were satisfied or very satisfied on the survey just prior to their defection.:32
The main difference between traditional and customer engagement marketing is marked by these shifts:
- From 'reach or awareness focused' marketing communications and their metrics (GRP or pageview) towards more targeted and customised interactions that prompt the consumer to engage with and act on the content from the outset.
- From absolute distinctions and barriers between an organisation and its target customers towards the participation of consumers in product development, customer service and other aspects of the brand experience.
- From one-way, top-down, formal B2C and B2E interaction to continuing, dialogic, decentralised and personalised communications initiated by either party.
Specific marketing practices involve:
- Encouraging collaborative filtering: Google, Amazon, iTunes, Yahoo LAUNCHcast, Netflix, and Rhapsody encourage their consumers to filter, categorise and rate; that is, to market their products. They realise consumers are not only much more adept at creating highly targeted taxonomies (folksonomies) given that they are more adept at delineating the segment they themselves constitute, but, also, that they are willing to do so for free. And to the extent they cannot, they do it for them. If enough people like the band Groove Armada as well as the band The Crystal Method, there may well be a stylistic connection between them, despite the fact that one’s categorised as 'downtempo' and the other 'beats and breaks'. Such strong associations tell Yahoo! to put the two on the same playlist more often, and if the positive ratings continue to come in, that connection is reinforced.:101 Amazon does the same with their ‘customers who bought this item also bought…’ recommendations.
- Community development: Helping target customers develop their own communities or create new ones.
- Community participation: (See Communal marketing) Consumers do not filter and rate companies and their offerings within company websites only. Being able, with little effort, cost or technical skills, to create their own online localities, a large percentage of the filtering and rating takes place in non-sponsored, online spaces. Organisations must go and meet their target customers at their favoured online hangouts to not only listen but also participate in the dialogue.
- Help consumers engage with one another: Give them content (viral podcasting, videocasting, games, v-cards etc.) they can use to engage with one another.
- Solicitation of user generated content: Engage them directly or indirectly with your product by giving them the means or incentive to create user generated content.
- Customer self-service: Help them create a customer service FAQ in wiki or blog format. Create a blog where technical support staff and customers can communicate directly.
- Product co-development: Create a blog where product developers and consumers can communicate directly.
All marketing practices, including internet marketing, include measuring the effectiveness of various media along the customer engagement cycle, as consumers travel from awareness to purchase. Often the use of CVP Analysis factors into strategy decisions, including budgets and media placement.
The CE metric is useful for:
- Identify where CE-marketing efforts should take place; which of the communities that the target customers participate in are the most engaging?
- Specify the way in which target customers engage, or want to engage, with the company or offering.
b) Measuring Effectiveness: Measure how successful CE-marketing efforts have been at engaging target customers.
The importance of CE as a marketing metric is reflected in ARF's statement:
"The industry is moving toward customer engagement with marketing communications as the 21st century metric of marketing efficiency and effectiveness."
ARF envisages CE exclusively as a metric of engagement with communication, but it is not necessary to distinguish between engaging with the communication and with the product since CE behaviour deals with, and is influenced by, involvement with both.
In order to be operational, CE-metrics must be combined with psychodemographics. It is not enough to know that a website has 500 highly engaged members, for instance; it is imperative to know what percentage are members of the company's target market. As a metric for effectiveness, Scott Karp suggests, CE is the solution to the same intractable problems that have long been a struggle for old media: how to prove value.
The CE-metric is synthetic and integrates a number of variables. The World Federation of Advertisers calls it 'consumer-centric holistic measurement'. The following items have all been proposed as components of a CE-metric:
- Duration of visit
- Frequency of visit (returning to the site directly – through a URL or bookmark - or indirectly).
- % repeat visits
- Recency of visit
- Depth of visit (% of site visited)
- Click-through rate
- Lifetime value
- RSS feed subscriptions
- Bookmarks, tags, ratings
- Viewing of high-value or medium-value content (as valued from the organisation’s point-of-view). 'Depth' of visit can be combined with this variable.
- Providing personal information
- Content resyndication
- Customer reviews
- Comments: their quality is another indicator of the degree of engagement.
- Ratio between posts and comments plus trackbacks.
In selecting the components of a CE-metric, the following issues must be resolved:
- Flexible metric vs. Industry standard: According to some, CE "measurement has never been one size fits-all" but should vary according to industry, organisation, business goal etc. On the other hand, corporate clients and even agencies also desire some type of solid index. Internal metrics could, perhaps, be developed in addition to a comparative, industry-wide one.
Other exponents of a flexible CE-metric include Bill Gassman in his comments to ‘How do you calculate engagement? Part I’.
- Relative weighting: The relative weighting associated with each CE-component in an algorithm. For instance, is subscribing to RSS more important than contributing a comment? If yes how much more important exactly? Relative weighting links up with the issue of flexible vs. standardised metrics: Is the relative weighting going to be solid – as will be required if the CE-metric is to be standardised – or is it going to differ depending on the industry, organisation, business goals etc.?
- Component measurability: Most of the components of a CE-metric face problems of measurement. Duration of visit for example suffers from (a) failing to capture the most engaged users who like to peruse RSS feeds; (b) inaccuracy arising from leaving a tab open during breaks, stopping to converse with co-workers, etc.
- Length of measurement: For how long must the various CE components be measured if CE is to reflect loyalty rather than short-term, faddish engagement?
- Customer engagement interview with Richard Sedley by Dave Chaffey 29 April 2007, smartinsights.com,Smart Insights (Marketing Intelligence) Ltd.
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