Customer Engagement: The Agency/Client Perception Gap

cScape recently released the results of its second annual Customer Engagement (CE) survey. They gave me an opportunity to see the data from the study, and I’d like to comment on something I don’t believe the report they published touched on: The gap in perceptions between agency and client-side respondents. These differences in perception show up in questions about:

  • The importance of customer engagement. Only 35% of agency respondents said that online customer engagement is essential to their clients, in contrast to half of client-side respondents. Both groups were aligned, though, in their perception of increasing importance of the concept: About 75% of both groups said that customer engagement had increased in importance to clients over the past 12 months.
  • The impact of customer engagement initiatives. Compared to client-side respondents, agency respondents were more likely to say that CE initiatives improved their clients’ customer loyalty and increased revenue. In fact, twice as many agency respondents said that CE initiatives increased profits than client-side respondents did.
  • What clients use to increase online customer engagement. Forty-one percent of agency respondents think that their clients use blogging sites to increase engagement, but just 19% of clients said that they use these sites. This discrepancy carried over to the use of social networks, video-sharing sites, and image-sharing sites (e.g., Flickr).
  • The future role of the mobile channel. Almost one-third of the agency respondents said that the mobile channel will be essential for customer engagement in the next three years. Just 20% of client-side respondents shared that view, though.
  • The description of an engaged customer. Both groups agree that an engaged customer recommends the product, service, or brand. But the two groups differ in their view to the extent that an engaged customer purchases regularly. Clients were more likely to believe this than agency respondents.
  • How customer engagement is measured. Nearly one-half (49% to be exact) of client-side respondents said that their firm has dedicated metrics for measuring online customer engagement. But just 30% of the agency respondents said that their clients have dedicated metrics.
  • The barriers to cultivating better online engagement. Client-side respondents were half as likely as agency respondents to believe that their own lack of skills and experience are a barrier to better CE. The two groups’ views also diverged regarding the extent to which getting senior management buy-in, dealing with technology problems, and finding supporting agencies were a barrier.

It’s highly unlikely, of course, that the client-side respondents were clients of the agency respondents. But the discrepancies in responses can’t help but make me wonder if many agency people aren’t on the same page with their clients when it comes to customer engagement. A number of factors are driving this discrepancy, specifically the agencies’:

1) Tendency to overstate impact. Often, the agencies aren’t the ones measuring the results, so I’m not sure why they’d think that customer engagement efforts are having such a great impact. Or why any of the branding campaigns they’re involved are having such a great impact, for that matter. But, hey, they’re not going to say that their efforts didn’t pay off, are they?

2) Over-fascination with the new. The client-side people are in the trenches fighting daily battles and fires. Few have time to explore video- and image-sharing sites or to read (and write) blogs. The agency-side, however, with a broader perspective, is out there looking for the next new big thing. So they attribute the involvement they do see out there to a wider range of client-side firms than are actually participating in these sites.

3) Mismatch of definition. A lot of the agency-side discussion of customer engagement has revolved around the concept as a measure of media effectiveness. A lot of marketers on the client-side don’t care about that. They’re looking at customer engagement as a potential way to help them make smarter decisions about investing their marketing dollars, and for helping them gauge their success.

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Guest Post: The Value Of Customer Engagement

cScape recently released the results of its annual Online Customer Engagement Survey. One of its contributors is Theo Papadakis who wrote the following:

Writing in ClickZ, Neil Mason denigrates the value of the concept of customer engagement on the ground that it is impossible to define and therefore useless. Neil proposes an alternative concept with which he seeks to capture what he thinks the proponents of engagement find useful in that concept. I wish to argue that Neil is wrong in thinking that customer engagement is an elusive concept and that his proposed alternative fails to do the task a properly defined concept of customer engagement can carry out.

A bit on the definition of customer engagement

Engagement is a bipartite relation, i.e., X is engaged with Y. Indeed, it denotes the very fact of the relation. Any relation is an engagement and vice versa. The concept of customer engagement however only deals with a particular kind of relationship:

  • Object: A customer’s relationship with a brand, company, product, or consumption topic.
  • Character: A customer’s emotional relationship with the object.
  • Kind: Positive or negative.
  • Content: Engagement is not itself a psychological state but involves psychological states, such as — in the case of positive engagement — sympathy, love, pleasure, pride, happiness, gratitude, empathy, affection etc.
  • Degree: The degree of engagement lies on a continuum that ranges from low engagement, namely, the psychological state of apathy, to high engagement. An engaged customer is a customer with an above average psychological investment/involvement with his or her object of relatedness.

However, given that psychological states are very difficult to measure and, above all, to relate to marketing objectives, publicly observable behaviours that reveal a customer’s object, kind, content and degree of engagement are measured instead.

As there is no simple measurement of emotion, a love or gratitude metric for example, customer engagement needs to be a synthetic concept and metric in order to provide a holistic understanding of a customer’s emotional involvement with an object.

Customer engagement can involve any number of the following token behaviours: word-of-mouth advocacy, provision of feedback, reduced focus on price, increased tolerance of mistakes, willingness to participate in new product development or redevelopment, create fan or anti-fan clubs etc. With the advent of the Internet, the engagement of customers with brands has intensified beyond all expectations and has taken many forms.

As a result, a number of online customer engagement behaviours should be added to the previous list: customers blogging about you, talking about you in forums and social networking sites, writing product reviews on your products on your own and other websites, creating online fan or anti-fan clubs, participating more directly in new product development or redevelopment, creating a wiki customer service or FAQ, creating a product hacking or troubleshooting site, etc.

The reason why frequency and recency of purchase is not in the list, however, is that even a combination of high frequency and recency of purchase is not a telltale sign of customer engagement. Repeat buying might be the result of other factors such as location, lack of competitors, or low price etc. A repeat customer may even be unsatisfied and anxious to defect.

Given the range of all these activities and the value they offer to the organisation, it is indeed very useful to talk about, measure, and try to influence the degree and kind of your target customer’s engagement with your brand.

Secondary value: economy of communication

Of course, we don’t have to use the term ‘customer engagement’. Just like the concept of a ‘car’ is utterly superfluous. We can refer to a car as a human-steered, mechanical-engine-powered, four-wheeled vehicle, but for reasons of economy we call it a car. Is it a car if it has three wheels? Is it a car if the dream of computer-automated steering becomes a reality?

It is important to understand that answering these questions does not require us to identify what the essence of the “car” is. Answering these questions, the business of concept-creation, is based on pragmatist considerations human speakers make in everyday life.

Similarly we don’t have to talk about engagement. We can talk about number of blog posts, forum posts, customer reviews, WOM advocacy, etc. instead, and when your manager asks you about the success of one of your actions in terms of outcomes other than immediate financial impact, you could answer in around as many words as it took to write this post.

Primary value: conceptual value

At this point I can imagine Neil arguing that he agrees with most of the above but objects to calling or, rather, in his own words, ‘dressing up’ these valuable behaviours as ‘customer engagement’. In his article he says:

If we believe there are sets of valuable behaviour that lead to beneficial outcomes, why dress it up and call it ‘engagement’? Why not just have a valuable behaviour index (VBI) instead of an engagement index? At least then we’d know what it is and what it means”.

 

As I hope I have showed that engagement is not an elusive concept as Neil seems to think, the rest of my argument will focus on why I think that:

  1. Using the ‘valuable behaviour index’ to refer to the aforementioned set of behaviours is problematic to say the least.
  2. Aggregating the aforementioned types of behaviour under a single umbrella term is useful.

I will use the same arguments to prove both points:

  • Neil’s concept of a valuable behaviour index is in some cases too general, while in others too restrictive and therefore fails to capture the dimension we seek to capture regarding the phenomenon of customer engagement. We are looking for a very particular kind of valuable or, in the case of negative engagement, damaging behaviour — behaviour that has a strong emotional as opposed to any other dimension. According to Neil’s notion of ‘valuable behaviour index’, for example, repeat purchase or frequent purchase must definitely be admitted as valuable behaviours. This is not so with the definition of ‘customer engagement’ cScape proposes. Our definition filters out this kind of certainly valuable behaviour. At the same time Neil’s notion is restrictive enough to be unable to capture negative engagement.
  • Emphasising the behavioural outcomes of customer engagement is actually potentially dangerous. The danger lies in that by giving it such a name we are prone to fetishise the behaviours. Although the ultimate objective of marketing efforts that aim at influencing, stimulating or facilitating customer engagement is to influence behaviour, it is not behaviour that is the immediate target of these efforts. These target behaviours are the indirect outcomes of marketing efforts to engage customers. It is psychological states that are the primary target of customer engagement marketing. Although facilitating the target behaviours is important, merely doing so, say by sticking ‘a recommend to a friend’ option, is utterly useless.
  • The repercussions of the argument from economy reach a lot further. Imagine you ran two campaigns, each of which effected an increase in each of the aforementioned behavioural components of engagement in your target customers. How would you decide which campaign was more successful? As soon as you start weighting each behaviour differentially you are on your way to create a synthetic and holistic engagement metric. In short: if you want to be able to compare the outcomes of your marketing efforts along the aforementioned dimensions you immediately need an umbrella-concept (and metric) of customer engagement. This is not to say that it is possible to standardise the components that constitute a customer’s engagement with an object. They will, of course, vary along the dimensions of object, kind, content and their behavioural manifestations. The possibility of having a concept with different components — another frequently encountered criticism of customer engagement — has been discussed elsewhere.

I hope I have dispelled two arguments commonly leveled against the concept of customer engagement, proven its conceptual value, and supported my dual conclusions that:

1) Customer engagement is not elusive, and therefore does not have to be a nebulous concept.

2) Customer engagement is a useful concept for marketers’ ability to: achieve economy of communication; capture a customer’s emotional relation with a company, brand, etc.; and compare.