Customer Engagement

To 3D Secure or not to, that is often the question.  We did some work for one of our clients and 3D Secure was part of the study. In summary:. Read more…

Jacob Nielsen has certainly created a ‘buzz’ recently in the online world of blogs and forums. The subject – password masking should be stopped.

He outlined his case in the article ‘Stop password masking’ (June 2009) in his recent bi-weekly column (Alertbox). Password masking is typically used for login screens and login dialog boxes. This is where the password is hidden using an asterisk symbol to mask or echo the characters being entered. Read more…

By Chris Holmes

“Creating your own blog is about as easy as creating your own urine, and you’re about as likely to find someone else interested in it.” — Lore Sjöberg. Read more…

Does emotional attachment to a brand prevail over the online customer experience for Internet-based companies? Read more…

 By Clare Mitchell Crow

The rise of the power of user generated content is leading organisations to offer new ways of enticing participation, and an innovative example I will be following is that of Simon Seeks. Read more…

When talking to businesses about measuring their digital marketing performance, the approach I often use is a simple three-stage maturity model as follows:

• Firstly, put in place an effective performance tracking capability. It’s important that the business is clear about what it needs to measure and what tools it needs to put in place to conduct that measurement
• Next, once the organisation is happy that it is measuring the right things, it must capitalise on that knowledge by using it to optimise online business performance, maximise the effectiveness of campaigns, develop lead generation and convert sales or other opportunities. At this stage, the organisation is still primarily website centric
• Finally comes the transition to customer centricity, which sees the organisation spend less time thinking about how to optimise its site for business, and more discerning how to enrich the whole customer engagement experience and lifetime value of individual customers

A customer centric organisation is primarily concerned with how its website can fit in and around the broader relationship with its customers. Most organisations actually prefer online transactions, as they’re cheap to process. But that’s not to say the same companies aren’t interested in getting as much value from their customers as possible, by catering for their needs through multiple channels. Many reasonably forward-thinking organisations operate multiple channels without actually being cross-channel. To become truly cross-channel they need to fully integrate these separate knowledge silos and create a joined-up view of all ‘touch points’ with customers. Customers should be the primary entity the business is focused on, not the product, the service, the order or whatever else.

Has the organisation developed a view of the customer relationship that spans more than one channel? Are, for example, its call centre customer records integrated with stores and across online services? The challenge of customer centricity is to be able to measure and understand the behaviour of customers across those multiple channels. This requires a fundamental shift in philosophy, business processes, and the way in which organisations measure their success.

Meeting such challenges requires organisations to join up their data in order to be able to better track customers. Other obstacles to overcome include ascertaining exactly whose job this is, who owns the customer within an organisation, and convincing the wider business to recognise the longer term return on investment of uniting disparate customer information silos. It is sometimes difficult, for example, for a shop floor manager to see the role the web plays in driving sales to his aisles. But if a customer does business through more than one channel, it’s generally thought that they will prove more loyal and, ultimately, more valuable.

Of course, none of this change in thinking is easy, but there are methodological approaches that can be taken, specific to different business sectors and individual organisations, for any business that has realised the need to tackle the issue and become more customer centric. It’s about putting effective frameworks in place, helping businesses think through their future strategy for measurement, spotting issues early, offering practical guidance for overcoming the challenges of data integration, and looking beyond the present to plan for a future of customer centricity.

In our latest podcast, Paul interviews Richard Sedley, who is Director of the customer engagement unit at digital agency cScape. He is also the author of the book “Winners and Losers in a Troubled Economy“, which explores how to use online customer engagement to create competitive advantage.

Is customer engagement the same as customer experience?

They’re fairly fluid terms and if you’re successful in one, you’re likely to be successful in the other. But there is a difference. We would define customer engagement as repeated interactions that strengthen the emotional, psychological and physical investment that a customer has in a brand, product or company. The key words are ‘repeated’ and ‘investment’. Too much marketing is focused on making a single conversion.

You can have positive customer experiences that don’t necessarily lead to engagement. For example, in the US car industry surveys show that 85-93% of people are satisfied or very satisfied with US cars. But they only have a repurchase rate of 40-50%. Satisfaction – and sometimes this applies to customer experience – is more an indication of past performance than future performance. Engagement is probably the best predictor of future business performance that you’re likely to get.

What impact is the recession having?

The big problem is that we don’t know where the bottom is, so we’re seeing companies cutting funding of marketing and other activities in preparation for a race to the bottom.

But there are companies doing reasonably well and a lot of that comes down to an understanding of customer psychology. Cadburys posted a 30% rise in annual profits, up to almost £600 million. You could say it’s all down to drumming gorillas and slightly psychotic children with wobbly eyebrows but I wouldn’t say that. It’s more to do with an understanding that while customers are feeling the doom and gloom, they still have a sense of escapism and playfulness and want to treat themselves. I talk about people trading up and trading down at the same time. People will carry on buying things that are important to them, and even trade up in brand, while they are cutting back on other things.

There’s a company in the US called Heritage, the world’s largest specialist collectables auctioneers. They auction collectables like film posters, comic books, and coins. They’ve seen a 40% rise in profits in the last quarter of last year, and average lot value has gone up by over 8%. The reason is that because of the recession, customers feel a lack of control. They retreat into domains where they do have control, and collecting is one of those.

Customers are not not spending. They are just spending with a more heightened focus on what they consider to be valuable to them.

How can other businesses perform better in the recession?

It’s about recognising what’s important to customers, what they value, and the prism through which they see that value. One example would be widescreen televisions. They were marketed as the ultimate boys’ toys for a number of years, but we’re already seeing that the marketing has changed to be more about family values. Family is a prism through which people understand recessions. They circle the wagons, bring things together more. It’s important to be able to emphasise the idea of domestic bliss (save money by not going out) over the boy toy aspect.

Competitor analysis will be increasingly important. There will be a greater emphasis on innovation, which means you need to monitor the marketplace so you can learn quickly from your competitors if they steal a march on you.

When I was at school, there were two types of mathematics: pure mathematics was about learning abstract number work by rote; and applied mathematics was about modelling the real world.

Too many companies are locked into ‘pure analytics’, where they gather numbers, and slice and dice them, but don’t put them to work. Companies that average activity across the whole site, or use measures like visit numbers and hits, are probably locked into this mindset.

For some time, we’ve offered visit scoring. This awards points to different activities on the site, so that companies can measure how engaged someone is. Each visit is scored according to the pages visited and activities that take place. A customer that just paws through the bargain bins is probably worth less to you than a customer who searches for an expensive TV and looks at a few results. Visit scoring enables companies to focus on potentially profitable and unprofitable visits and to adapt the user experience to increase customer participation. The next step is visitor scoring, which scores individuals over time, and considers how often they shop, how recently they shopped and their life time value to the business.

Using visitor scoring as a starting point, companies can introduce customers to others with similar tastes. This can drive social networking, so that site members are automatically introduced to others with similar tastes in products or hobbies based on pages viewed and items bought. This could be a good way to increase participation from those members who only pop in when they receive an invitation from a friend. People can be matched according to how they want to engage with the site too, so that you don’t pair up someone who’s online every day with someone who only logs on weekly.

Customers can also be matched on review sites. When I read bad book review posted by another customer on Amazon, I don’t know whether the reviewer has similar tastes to mine, so it’s hard to trust the review. Visitor scoring offers a simple way to benchmark how similar customers are to each other, so that they know how closely their tastes match and how much they can rely on each other’s reviews.

There will be privacy concerns, but Facebook’s plug-ins have shown that if there are benefits there, people are prepared to share their private data with anyone who can enable them to interact with their friends and the internet in new ways.