Bill Hanifin
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Trendy business buzzwords aren’t any fun until you form an opinion and seek feedback to get to the substance of the issue.
Customer Engagement is one of those terms that is being mentioned more frequently than Kim Kardashian was during the Super Bowl. It’s the 2010 version of “what’s hot, what’s new, what’s next?”
The question is, should Customer Engagement be treated as a new marketing sub-set, on par with Loyalty and Word of Mouth Marketing, or is it a concept that’s been around for quite some time and just happens to be a point of pain in the Relationship Value Chain (RVP) for marketers today?
Relationship Value Chain? That’s the term that my good friend and former Colloquy colleague, Kelly Hlavinka, coined almost 10 years ago. The experience of many at the once proud Frequency Marketing was that customer value increased across a spectrum of customer interaction. Link the points of interaction and you had a value chain that loyalty marketers could use to influence communication plans and allocate marketing budget dollars to encourage specific behaviors.
The RVP is similar to the “acquisition – activation – usage – retention” lifecycle marketing that credit card issuers have been using for years, but takes objectives down to a more granular level.
One example of a flow that constitutes a RVP:
- Awareness
- Response to Invitation
- Program Enrollment
- First purchase
- Multiple purchases in response to offers
- Redemption for Reward
- Response to Survey
- Response to Future Bonus
- Multiple Redemptions
No one has a lock on defining the steps in the chain as they should be customized to the business situation under review. Going to back to Customer Engagement, just where does it live in the value chain used as an example here?
Let’s look at a few steps in the RVP and see where, if accused of being “Engaged”, there would be enough evidence to gain a conviction!
Program Enrollment – Doesn’t everyone enroll in programs without much care for future interactions? I enroll in just about every program where I know the odds are that I’ll be back (by choice or force) and the offer looks worthy enough to give it a whirl. The only caveat is that I won’t sign up if the data collection hurdle is too high at the outset.
First Purchase – You’ve got my attention, but what makes you think I’m “Engaged”? I may be a cherry-picking consumer or have just satisfied a one-time need for your product or service. Not enough evidence to convict me as engaged at this point in time.
First Redemption – I’ve stayed around long enough to make multiple purchases over time – how else would I have qualified to redeem? But did you catch me in a cycle of life that won’t soon be repeated, or can you count on me to do it again? Engagement? We’re getting closer, some say “yes”.
Survey Response – I’ve transacted, collected, redeemed, and now I am willing to actually have a conversation. You’ve got my attention, but I am skeptical of what you will do with the information and if I will hear from you again. Does this sound akin to dating? Conversation is certainly an accelerator to engagement, but does not constitute the end goal itself.
Multiple Redemptions – Once I’ve completed the purchase/collection/redemption cycle more than once, I think you can count me as “Engaged”. The focus shifts now to retaining my interest, expanding the conversation, and developing more business as a result.
My take on Customer Engagement is that it describes an end objective that marketers hope to achieve through smart execution of a well designed data-driven Customer Strategy. If you try to define engagement as one of the individual steps, take Enrollment as an example, then what you are truly talking about is more tactical ala “how to create awareness for a program and convert interest to enrollment”.
It’s a step along the way, not engagement itself.
The Loyalty Truth on Customer Engagement is that it has been around for quite a while. The reason the topic has been deserving of the spotlight lately is that customers are increasing difficult to engage, not to mention retain.
What’s your take?
