Engagement Myopia

In an article on Chief Marketer‘s web site, Robert Passikoff, President of Brand Keys, called [customer] engagement 2006’s “holy grail and favorite buzzword”. In a previous article, Bob predicted that engagement would:

Continue to insert itself between traditional marketing activities and an increasing demand for return-on-investment assessments, and will occupy a good deal of marketers’ and advertisers’ attentions.”

He was right. It’s a shame, though, engagement won’t occupy the attention of a wide enough range of marketers.

In a number of presentations I’ve made to marketers over the past few months, I’ve said that customer engagement is a hot topic within the marketing community, and I’ve received some blank stares. It’s a hot topic with advertisers — not necessarily marketers.

This needs to change. One issue preventing many marketers from embracing the idea of engagement is the definition that the Advertising Research Foundation put forth last year: “Turning on a prospect to a brand idea enhanced by the surrounding context.”

That’s too narrow a definition (I’m being way too kind here). As a result, it turns off many marketers involved with other aspects of the marketing mix beyond advertising. I prefer to think of customer engagment as:

Repeated — and satisfying — interactions that strengthen the emotional connection a consumer has with a brand (or product, or company).”

More important than agreeing to a definition, however, is understanding why engagement is so important to measure. It’s because engagement is a measure for the strength of relationship a company has with its customers. The stronger the relationship, the more likely the customer is to: 1) remain a customer; 2) do more business in the future; and 3) often, be less costly to serve.

The ARF (and others) may offer a standard definition of engagement, but how to measure engagement is something that firms must figure out for themselves.

Using consumer research from Forrester Research, I set out to define engagement from the perspective of a bank. Using the data available, I used five survey questions that I believed would provide clues to the extent to which a customer was “engaged” with his or her bank:

1) How often did you move money between different accounts in the past six months?
2) How often did you check your savings rate in the past six months?
3) Have you viewed educational material on your bank’s Web site in the past six months?
4) Do you bank or pay bills online at your bank’s Web site?
5) How likely are you to recommend the bank to your family and/or friends?

Using a scale of 0 to 2 for a range of answers, I was able to score the database and arrive at a measure of their “engagement.” Why is this something banks (and other firms) would want to do? Because consumers who scored higher on the engagement measure were more likely to be more satisfied with the bank, and even more importantly, more likely to buy more products from the bank over the next 12 months.

Broadly measuring engagement (beyond the adverstising purview) helps marketers address some important questions:

  • Which customers aren’t very engaged? Marketers may uncover demographic trends when evaluating engagement. For example, a firm may find that it is engaging younger consumers more effectively than older consumers (who may represent a more affluent set of prospects).
  • Which customers are becoming less engaged? These customers may represent attrition risks, requiring the firm to take preventive measures.
  • Which customers are most engaged? Firms can improve campaign response rates by targeting more of these customers based on their greater likelihood to do more business in the future.

Marketers: Don’t let the advertisers keep customer engagement to themselves.

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6 thoughts on “Engagement Myopia

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  4. Hallo all,

    I am a masters student in the University of Auckland, New Zealand, and my masters thesis is: nature of customer engagement in online brand communities and role of a company in facilitating it. I am very interested in the customer engagement phenomenon. I would like to share some of my thoughts, but also to ask you some questions.
    When I was doing my literary review, I realised that there are no academic research about customer engagement yet. Does somebody know about some academic articles about it? If you know about them, could you please let me know, because I could not find any?
    But I found enormous number of academic articles on the topic of student engagement and employee engagement. In student engagement, majority says that engagement has 3 components: emotional, cognitive and behavioural. I believe that customer engagement is a multifaceted construct, too, and that it might consist of the same components. I will try to find an answer through my research.
    I also realised that there is a huge body of knowledge about customer involvement, participation, and collaboration. Since those constructs are already well-established, the question that I want to raise is whether customer engagement is a meaningful idea that adds to marketing knowledge or is its popularity only due to wish of practitioners for the answer to the problems of keeping customers loyal. Since customer engagement is a young construct, the question is does it capture some aspects of customer attachment to the organisation and brand that was missed by previous research. In other words, the question is if customer engagement is a broader construct than customer involvement, participation and collaboration, and if it is broader, should it replace these constructs?

    Ana

  5. @ Ana: Thanks for your comment. I did find a bunch of links, academic-related when doing a Google scholar search:

    http://scholar.google.com/scholar?q=customer+engagement&ie=UTF-8&oe=utf-8&rls=org.mozilla:en-US:official&client=firefox-a&um=1&sa=N&tab=ws

    However, when I searched the SSRN (http://papers.ssrn.com/sol3/DisplayAbstractSearch.cfm)
    where a lot of academic papers are published, practically nothing turns up.

    Let us know if you find anything interesting. For something practitioner-focused, you should check out: http://richard-sedley.iuplog.com/

    — Ron

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