CUSTOMER ENGAGEMENT IN MARKETING

RAHUL DWIVEDI (Asst. Prof Of Management) in GICTS GROUP OF INSTITUTIONS, Gwalior, Madhya Pradesh Contact no. 09889097327

ABSTRACT Todays customers are harder to win and keep. To meet this challenge ,companies are focused on fostering customer engagement :creating deep connections with customers that drive purchase decisions, interaction , and participation over time. This paper reveals that Firms are using a variety of channels to engage customers, and believe that the internet is essential to forming and deepening these relationships. Customer engagement takes direct marketing up several notches, by focusing more on two way communication. The advent of social media added Engaging customers involves: 1. Listening to customers. Acting on the feedback you receive is the indication that you have heard what has been said by the customer. If you fail to act on this information, then you miss out on the opportunity to improve your product and gain market share.

2. Creating value. The brand must satisfy the need of the consumer so they must understand what the product offers. This paper Emphasizes on the involvement of customers in perspective of choice of marketing channels.

INTRODUCTION What I Mean By Customer Engagement

For the purposes of this post and going forward, I'd like to start with a definition of what "customer engagement' is and isn't, so there is no doubt about what the era of customer engagement means. 1. First, It doesn't mean the era of customer intimacy though that is an optimally desired "condition" for a company's view and relationship to its customers. But engagement doesn't require intimacy or advocacy. However, aiming at creating advocates from among your customers is part of a smart strategy. 2. It also doesn't mean customer loyalty. That may and I mean may be an outcome of successful engagement with the customer - though, as V. Kumar pointed out in 2000 3. , the correlation of loyalty to profitability is mediocre to fair, not good, so there are questions of the value of that outcome. 4. It also doesn't mean it is identified by the length of time that the customer is involved with you without some extra analysis. Otherwise, inertia, which occurs when the cost of switching (financial, labor cost, emotional cost) is greater than the value perceived of the result, would seem to be engagement, when it isn't. So it isn't just a function of the time a customer and a company are involved.

5. What customer engagement does mean (so there is no nebulosity here) is the company's and the customer's relationship is defined by the customer's ongoing involvement with the company for their own specific reasons. The company doesn't have to know all of them. But they have to have enough knowledge of the individual customer to support the determination of what it will take to maintain or expand the customer's relationship with them. 6. It does mean that it is an era where the engagement the customer has with the company is controlled by the customer - and it can be at any level. Intense, casual continuous, occasional, deeply involved, barely transactional. The key phrase is "customer self-selection." 7. It does mean that the company model is to provide the customer with the products, services, tools and experiences that the customer needs to make an intelligent decision on how they want to be (selectively) engaged with the company. These are engagement programs organized around an ecosystem that are based on customer self-selection. 8. It does mean the provision of a measurable result when it comes to that engagement

via direct or indirect impact on revenue or some other key performance indicators that show the value of the engagement to the company - and the customer. Though they are different values.

9. It does mean the use of systems of engagement (see Ray Wang discussion here and Dion Hinchcliffe here) which are systems that foster the interaction of the company with the customer. They can range from enterprise feedback systems to insight

solutions to online communities to internal collaboration. But fundamental is that they are systems that can foster activity among the choice multiple combinations of employees and customers e.g. customer to customer; employee to customer.

THE ERA OF CUSTONER ENGAGEMENT 1. Starts from the assumption that you are going to incorporate social channels into your customer communications.

2. Identifies both the need for and how you can enable collaboration at your business for better productivity and effective employees. 3. Says that you might even go as far as converting your overall culture and business focus to a social business which means empowering (and incentivizing) employees to be able to deal with customers wherever and whenever (among other things). The opportunity and some of the body of practice to guide your company is there. 4. Means that your business understands how internal collaboration and customer interaction/involvement are not only converging but can be an important influence in your strategic direction 5. Means that you understand that the customers social information is as important as and complementary to their transactional information. 6. Also means that you recognize that there is clear evidence that the use of traditional channels is not only not ending but will continue to be vibrant. While social channels, which are now part of mainstream communications are more highly scalable and will have more potential impact because of that, they will never replace traditional

channels. 7. Means that you'll stop treating the social customer as an object of wonder that you bow down to because of their remarkable powers to change your business - and start treating them like a customer who is operating in a set of channels that have unique protocols that you have to learn. 8. Means that we've reached the point that we can be proactive in dealing with all the "conversation out there" on the social web, rather than waiting to react to every little bad word that a customer says on Twitter when we see it. 9. Means that the strategies to be considered should be multichannel (which combine social and traditional) and appropriate to the channels that your customers want to communicate in. If its phone, its phone. There is no requirement that social channels be used. They should be used if they provide some value in their use. 10. Means that we need to recognize that there are tools that actually can do some good in a number of ways but they, like always, have to be chosen well, implemented properly, and adopted by those that are needed to use them so that you get the results that you are looking for. 11. Means understanding that now practitioners have their own perception of what Social CRM is (see above). That perception isn't entirely the analyst/pundit/influencer definition, but it is going to have to do. 12. Is an understanding that while the strategies, programs et. al are now maturing and have a sufficient body of knowledge to back them up, the technologies capabilities tend to lag the strategies and programs requirements. It is time to set some standards as to what can be called "Social CRM" software.

13. Is an understanding that while we have reached a more mature stage, that doesn't mean that experimentation is entirely done for. Each business still has to determine what makes sense for them to try (proof of concept) and what makes sense for them to use (roll out to the whole company).

BASIC PRINCIPLES OF CUSTOMER ENGAGEMENT 1. Customer engagement exists in a full spectrum of experiences. Customer engagement is no longer a series of one-off experiencesit's an ongoing dialogue. Companies need to be good listeners in the digital age, and that requires a new set of skills. It means listening to customers who are already having conversations about brands yours and othersin traditional online channels as well as over the social Web. So jump into those

conversations in a genuine and human way. Foster trust and form relationships through open, honest interactions over timeinteractions that create positive experiences and outcomes for your customers. Positive outcomes include answering questions, solving problems, hearing ideas and supporting them (when possible), and also amplifying praise. Another aspect of this spectrum is the relationships that your customers form with each other. The peer-to-peer relationships are core to the social Web. Because of course, your customers won't just be interacting with you, they'll talk amongst themselves, sharing their perspectives across Twitter, Facebook, LinkedIn, and even YouTube. Your job isn't just to sell your product, it's also to facilitate an active, passionate online community around your product. 2. It needs to be results-driven. Although communication with your customers is an ongoing dialogue, you need not be chatting just for the sake of it. When you engage your customers, have a goal in mind whether it's improving your product or nurturing loyalty and increasing sales. While traditionally the product team manages product and marketing is responsible for increasing brand awareness and driving sales, the lines are blurred now. Nurturing an ongoing and genuine relationship with your customers will naturally make a major impact in both these arenas. Naturally, how you engage with your customers impacts how customers view your brand. 70% of Americans are willing to spend an average of 13% more with companies who they feel provide above-par customer service. That means that all your customer engagement efforts should lead clearly in the direction of resolution. Know what the outcome should be, and provide your customers with clear tools that make it easy and efficient for them to get what they need.

3. It happens anytime, anywhere. In the past, company-customer interaction happened in siloed, closed-off settings. Customers had to make a phone call or write an email. But now, we're living in an "always-on"world ruled by the mobile experience. In 2011, customers were using mobile apps 10 times a day and a growing number of customers have used an app to buy a product. But here's the big news: an astounding 78% used mobile apps for customer service purposes. In other words, if you're not engaging your customers on-the-goin the context of their daily livesyou're essentially neglecting them, or are at least missing an opportunity to nurture the relationship through an open, honest interaction. You want to be able to interact with your customers in the context of their daily lives. Not only are you able to provide them with better, more immediate service, but you also gain loyalty and stay in the forefront of their minds. When the time comes to make a purchase, they'll choose the product they've come to trust through a series of positive experiences. 4. It's considered mutually beneficial. The new customer engagement strategy should feel less like a marketing and sales campaign, contest, or tool, and more like a well-developed friendship founded on the basis of interdependent needs and mutual respect. The feedback you get from your customers isn't just important for you, it's important for them, as well. If you can listen to what your customers are saying and improve the product and their experience, everybody wins. You get more loyal customers; they get what they really need and want. The relationship you build is a two-way street. On one hand, your customers feel heard, and they can see the ways they're actually contributing to your company. At the same time, you get free feedback, and have the opportunity to improve your business, thereby by attracting

more customers. 5. It's truly customer-driven. Remember the days when cold-calling part of your marketing strategy? Now, imagine the opposite of a cold call, because that's how customer engagement works today. Your customers decide if and when to communicate. Your job is simply to give them the tools that make the interaction and communication easy and natural. Not only should these tools be easily accessible and highly visible, but they should also offer options for different types of conversation. Do they have a question? Do they want to post a rave review? Are they experiencing a technical difficulty? Present your customers with an intuitive tool for communicating with you, and let them initiate. When you put control in their hands, you're more likely to be able to meet their needs, but you also win their trust, and ultimately, you build the loyal customer base you need to grow and succeed.

FIVE NEW TRENDS IN CUSTOMER ENGAGEMENT 1) Technology & Innovation Marketers must recognize that all companiesyour customersare technology companies who need your products or services to differentiate them in the market. Every industry today is experiencing technology innovations and access to development tools that impact how products are made, how they are used, and how they are delivered. More rapid development cycles for customer specific solutions must be implemented to enable an organization to respond to demands of customers when they arise.

First, make sure your website leaves a great impression and supports your brand essence. Give your business a professional and credible image with a website that provides engaging content to draw customers in, provides an exceptional and

differentiated experience for them, and provides the reliability needed to build their trust.

Stay abreast of and embrace new technology. This is a must in order to reach a broader audience and engage your customers. QR codes, for example, arent exactly new but they might be to you. Using them in your marketing efforts can help you reach customers in a unique and exciting way. Whether its a new social networking site that pops up, a change to Googles search algorithm, or new software that can enhance a users site experience, you must adapt with changing and emerging technology so your business will stay current and relevant to your target audience.

Dont deny consumers hungering for cutting-edge innovations and enhanced experiences, and their devouring of the latest and greatest. Innovative and creative response to ever-changing consumer expectations is critical for brand leaders. For example, more and more, smartphone and tablet apps will create an interactive nexus to increase consumer engagement and brand differentiation.

Anticipate the escalating consumer desire for coolness and beauty in your products and services. Apple, for example, leverages engagement and loyalty not by delivering communication or entertainment devices, but by delivering products that are beautifully, creatively and organically designed.

Recognize increased consumer desire for simplicity as complexity pushes on people. This will result in the convergence of complex services and products into simple, expectation-exceeding solutions, but only if brands know where to look in their own categories for the wow button to press. Look for trends in smaller, higherquality products, and ease-of-service delivery methods.

Consider gamification: the integration of game mechanics into marketing activities to drive customer engagement and participation, and potentially improve

the effectiveness of your social media marketing. Increasingly, companies are

strategically looking at how to capitalize on the growing gamification trend. Gamification is about providing sustained user engagement, says Sam Laird. 2) Mobile Marketing According to the SocialMedia Today article 3 Secrets to Mobile Marketing Success for any Business (by Brett Relander ), mobile marketing software is more important than ever in todays world and mobile marketing is on the rise. Fortunately for you, most arent doing it effectively (at least not yet) and are largely just flailing around in the dark.

Optimize your website for mobile phone use to satisfy customer demands. Of course, a mobile site is much different than your standard website. If a prospective customer pulls up your website on their cell phone and it hasnt been optimized for mobile phone use, it will be hard to navigate and a frustrating experience overall. This alone can make you lose out on mobile customers and, with over 70% of all mobile searches resulting in action within one hour, you definitely want a piece of the mobile shopping/experience pie.

Offer flexibility for efficient mobile monetary transactions, as consumers growing use of handheld technology and smarter smartphones for mobile transactions increases. Mobile digital wallets will mark a big shift in retail payments. With the value of transactions made via mobile devices estimated to be $240 billion last year (according to Juniper Research) and predicted to triple that size over the next five years, and with prospects that consumers might be able to leave their physical at home and pay for most of their shopping via their handsets by 2016 (according to Forrester Research), retailers need to think about the impact of mobile wallets as they

build out their loyalty programs. Brands that do not facilitate and customize experience for small screen transactions may lose formerly loyal consumers.

Take advantage of mainstreaming of mobile coupons. Juniper Research forecasts that the total redemption value of mobile coupons worldwide will be more than $43 billion by 2016, representing an eightfold increase from $5.4 billion in 2011. Costeffective mobile coupon campaigns provide merchants with an easy way to build customer loyalty.

3) Added Value & Consistency Customers have more choices than ever, and are more frugal in the current economy. This affords them the luxury of demanding more. Offering your customer base value-adding information and sharing tips about products and services will be expected by consumers.

Recognize customers at all touch points to deliver a consistent quality customer experience. A 2011 poll by Loyalty 360 found that 78 percent of respondents believe that a great customer experience makes them loyal. This requires the delivery of the call center into the overall customer experience. (This is not a new concept, but needs ongoing attention.) Smart marketers will identify and capitalize on unmet consumer expectations. Those companies that understand where the strongest expectations and gaps exist will be the companies that survive and prosper.

Address the critical constraint and value of peoples time in your business interactions. Today, one of the most precious elements we struggle with is the time we have to spend and balance the demands on our lives and to keep up with the world around us. The more time you seek, the stronger the value proposition of your encounter must be. Take Michael Petrisko, CIO at Hill International: Whats

important to me is that a discussion with a vendor has purpose and is relevant to my business anything short of this is a waste of my time. Realize that every encounter must have a compelling business cause and provide reason to engage with you and your business. Make sure your contact leaves the encounter with the that time spent with you and your organization was a valuable use of their time.

Accept that the consumer gets to say how valuable is actually defined . Employ effective systems to listen to them and then figure out ways to tune in the consumers frequency. Differentiated and believable brand meaning emotional, rational, functional, and experiential will increasingly become a more effective and profitable surrogate for value than low-lower-lowest pricing strategies.

4) Personalization / Customization According to Anthony Leaper of SAP: Ideally, we aim to meet customers with precisely the right offer, delivered at precisely the right time, and at precisely the right price and conditions. CRM solutions can facilitate this, but only if it can sort through and connect all that information and expose the opportunities that you seek.

Look at a mix of location-based behavioral data and attitudinal and preference data. Use data gathered from loyalty programs about buying patterns to help marketers with segmentation and messaging. Brands will want to have this data in order to control personalization of their messages rather than offer the same promotions, discounts, or specialized products/services to everyone. The information on customer transactions, likes, dislikes, and preferences gives brands the deep level of customer intelligence needed to deliver the most relevant, highest-quality customer

experience and drive long-term loyalty.

Talk, engage and interact with customers more often and more meaningfully in new and innovative ways (such as via dynamic content, interactive blogs, and emerging social networks and apps). To create a more loyal customer base, businesses need to offer what the customer needs, and this determination should be based on their actions and interactions, which you need to monitor.

5) Feedback / Recommendations Social media and review sites are changing the game of how businesses need to respond to customer needs and, with acceptance of that, the time has come to become more proactive in encouraging reviews and persuading customers and prospects to follow their friends leads (e.g., refer-a-friend programs). Glean intelligence from social media feedback and harness the power of recommendations and referrals.

Embrace connected consumers growing use of social network streams to talk about brands, as peer-to-peer feedback will have more and more influence on purchase habits than ever before. Consumers are looking for reliable information when making decisions on products and services, and are looking for experiential the product? Businesses must develop effective approaches to mining and analyzing this data to derive valuable insights, actionable intelligence, and an overall deeper understanding of what drives the success of the brand in the social world.

Actively develop evangelists for your product or service for a competitive edge. According to Alex Goldfayn, CEO of Evangelist Marketing Institute and author of the

book Evangelist Marketing, when you have evangelists for your product or service, you have the best possible kind of customer. Your evangelists are passionate, loyal, and thrilled to recommend you. They are your public defenders when times are difficult. Evangelists are also forgiving; they assume your mistakes are honest and believe you have their best interests at heart. No matter what business you are in large or small, product or service, public or private you should be doing everything humanly possible to develop and retain these kinds of customers.

Invest in measuring social media, understanding customer value and modeling customer behavior. Marketers that have loyalty and engagement metrics in place will have a handle on emerging trends and be more prepared to provide the value consumers are seeking. Examining relevant data carefully and identifying changes in customer trends tied to your brand early on will enable you provide meaningful customer experience at just the right time. If you do not use your data to talk to your customers, others will.

COMPANIES SEE THE INTERNET AS KEY TO CUSTOMER ENGAGEMENT What do firms do to engage with customers in this way? To find out, Forrester Consulting conducted a survey commissioned by Adobe of more than 200 business decision-makers including customer service, support, and marketing professionals from around the world about their customer engagement efforts.1 Results show that: Engagement activities span channels. The Web might be more ubiquitous addressable, and measurable, but physical locations and interpersonal interactions still

engagement programs involve both offline and online touch points (see Figure 1). Online engagement programs will skyrocket this year. Although most companies said they use the Web to engage customers in some way today, only 41% said they rely heavily on digital technologies to drive customer engagement (see Figure 2). But when we asked how heavily they will rely on these technologies 12 months from now, this number jumps to 70%. Technology choices focus on making the Web site more engaging. More than 60% of respondents said their firms use Rich Internet Applications and multimedia on their Web sites, both of which have the potential to enhance interaction (see Figure 3). A similar percentage use online forms that enable customers and prospects to complete key transactions online and companies to gather information about buyers and influencers who are willing to provide personal information. Firms plan to experiment with new forms of technology-enabled participation. Many respondents to our survey said they plan to add technologies such as online customer reviews, mobile Web sites, and user-generated content to their portfolios over the next year (see Figure 4). This comes as no surprise, given that tools like these offer customers a new way to engage with brands. And, when implemented properly, this type of technology also provides a reason for customers to return to a Web site again and again (see Figure 5).

HOW ENGAGED ARE CUSTOMERS The big question facing executives in charge of customer engagement programs is: Is what were doing actually working? The majority of respondents to our survey think that it is (see Figure 7). But to really be sure, they must define how fully-engaged customers compare to those who are less engaged, use these criteria to assess and segment buyers, measure the of engagement among them, and track how it changes over time. We asked survey participants how they go about doing this, and found that metrics used to track engagement fall into three categories:4 Results. Of the 10 most popular metrics used to track engagement, three sales volume, new customer acquisitions, and customer retention capture business goals for customer engagement programs.

 Emotion. Also popular were metrics or data points that capture the emotional side of engagement. Examples include opinions expressed during customer service calls, customer satisfaction ratings for Web sites, and satisfaction ratings for products and services. Although not as popular, metrics such as brand affinity were seen as highly effective measures of engagement among firms that use them. Web site activity. Rounding out the list of most popular metrics were those that capture levels of customer activity on firms Web sites, such as frequency of site visits and logins, average number of pages viewed per visit, and completeness of information submitted by customers in online forms.

SUGGESTIONS TO REALLY UNDERSTAND ENGAGEMENT, MEASURE LESS Given all the challenges inherent in trying to measure customer engagement, what should firms do to get the best, most complete picture possible? In a word simplify. Its tempting the high level idea of customer engagement. But realities of time, resources, and complexity make that impractical. Companies are better off focusing their measurement efforts on the behaviors and opinions that most represent the ideal form of customer engagement, and tracking just a few key pieces of data about each one. What are those critical few behaviors and data points? To find out, companies should: 1. Identify the ten most important things that engaged customers and prospects do. List all the channels in which customers can interact with the brand, and the things they can do in each channel. Prioritize the entries in that first list, giving more weight to activities that affect the bottom line, require a high level of effort from the customer, or are initiated by the customer without prompting from the firm (see Figure 11). For most organizations, the top two activities will be purchases and recommendations. Other candidates include visits to a store, creation of content for a blog, discussion thread or contest, requests for product configurations, pricing, or proposals, and participation in market or product research efforts. 2. Define which channels support each form of engagement. The activities on this topten list are likely performed through more than one channel. For example, customers research products in a store (e.g., by reading a brochure, using a kiosk, or talking to an employee), over the phone (e.g., by talking to a service rep), and online (e.g., by downloading collateral, clicking on options, or sorting by style, color, or price). List the channels through which each activity can happen today, and identify the internal systems that contain data

about what goes on in each one so youll know where to go to get data later on. 3. Track how many people do any of these activities. The simplest way to measure engagement is to look at the percentage of customers who exhibit any of the behaviors that youve deemed engaged behaviors. Start by asking a representative sample of customers and prospects which, if any, of the specific engagement activities theyve done in the past year. Calculate the percentage of people who have done zero, one, two, three, etc. of the target activities. If the segment of people who do multiple high-value activities is large, the customer base as a whole can be deemed highly engaged. Now, its true that this is just one of many dimensions of engagement. But this approach, though simple, is highly actionable because it enables companies to track whether or not programs designed to get customers and prospects to do things they dont normally do are working. 4. Capture frequency metrics in addition to program adoption. In addition to profiling engagement activities across the customer base, firms should track the average number of times a purchase decision-maker performs these activities in the course of a week, month, or year.6 For physical channels and offline, word-of-mouth recommendations, firms will have to rely heavily on surveys that ask customers how often they do key activities. But wherever possible, companies should use the frequency metrics calculated by their existing Web, email, and call center analytics packages. Although these metrics reflect just one

aspect of engagement, they enable companies to understand the success of programs designed to get current customers to act more quickly and do more of what they already do. 5. Measure intimacy using surveys and sentiment tracking. To measure the emotional

side of engagement, firms should again focus on choosing just one or two metrics that represent the type of intimacy they want their customers to feel. Candidate metrics include reference, and Net Promoter score. Regardless of the specific intimacy metrics in use, firms should calculate both the average rating from customers and the percentage of customers who exhibit strong, neutral, and weak emotional connections based on their answers. Once from third-party brand monitoring services to summarize the volume and tone of sentiments expressed outside the walls of the company. These services are likely to reveal feelings that customers might not express when asked directly, and can be valuable for measuring the success of the social marketing tools and initiatives many companies indicated they plan to add in 2009. 6. Summarize adoption, frequency, and intimacy metrics in a single dashboard. To get a sense of the overall direction of customer engagement, firms should aggregate the three types of metrics listed above onto a master engagement dashboard (see Figure 12). The dashboard should show the current value for each metric as well as the change in that metric over a time period appropriate for the business. The goal is to have a positive change in each of the metrics on a regular basis. The dashboard can, and should, also indicate goals for lifting each metric and how well the organization is progressing toward those goals. 7. Generate the engagement dashboard regularly. The data needed to populate an engagement dashboard like the one described here will come from a variety of sources, most of which are not integrated. That means the process for generating the report is likely to include both manual and automated components. Even so, firms that invest heavily in engagement programs need these metrics to guide their efforts. They must allocate the required resources to produce an engagement dashboard so they arent flying blind as they

execute engagement initiatives. Once executives see the power of these metrics, theyll be more likely to allocate funding for a better data collection and reporting infrastructure

CONCLUSION Companies can drive business value through customer engagement by understanding that: An empowered customer is an engaged customer. Giving customers a voice, letting them be involved, interact, influence, and build intimacy in new and different ways is the central theme of engagement. Engaging the customer through a cohesive customer experience can empower the customer to be a brand and product promoter, and influence the marketplace in ways not possible with traditional marketing. Engagement must drive business results. Although the promise of engagement is enticing, it involves commitment from organizations to invest time and effort up front in identifying the right engagement metrics to track, focusing on the four Is (involvement, interaction, intimacy, and influence). Ultimately, what will matter is the ability to tie engagement metrics to financial metrics in order to demonstrate tangible business results. Discussions of engagement should use the language of business (improved efficiency, increased effectiveness) to maintain and grow funding for engagement efforts.

 IT plays a new and vital role. For engagement to succeed, IT roles will need to adapt to new systems with less control and greater ability to drive engagement. Content will be monitored, not published. As well as deploying and managing systems, IT will need to explore and sanction systems that exist outside its span of control. This shift requires that IT rethink its internal processes and relationship with the business. Success or failure at improving engagement will not rest solely with IT; however, getting IT to adapt to new ways of thinking about the relationship of data and customer interaction will maximize the benefits of engagement.