Everyone’s talking about customer engagement —
but why is it so important, and what does it really mean? How does customer
engagement look in action, when you’re a business trying to connect with your
customers today?
We already know a lot about the customer
journey — how it’s made up of numerous touch points, from search to purchase to
post-purchase support. And we know that providing a good customer experience at
each of those touch points is critical to building and maintaining a solid
reputation for your brand. But customer engagement is often overlooked, even
though it’s critical to nudging customers along their journey.
Customer Engagement Impacts Profitability
Customer engagement is about inspiring your
customers to interact with your brand and willingly take part in the
experiences you’re creating for them. If you do it right, you’ll grow your
brand and build customer loyalty — and, in turn, drive revenue.
In fact, there’s a direct and proven
correlation between the level of customer engagement and business
profitability. A study by Constellation Research reported that companies who
improve engagement can increase cross-sell revenue by 22 percent, up-sell
revenue by 38 percent and order size by 5 to 85 percent. Reputation.com
research backs up these findings — a high rate of customer engagement
increases Reputation Score, and we’ve found direct links between high Scores
and revenue in multiple industries, including Automotive and Healthcare.
Despite the immense financial impact engaging
with customers can have, some companies are still not doing it.
A New Approach To
Engagement Sees Exemplary Results
In the recently released Retail Reputation Report, data scientists at
Reputaiton.com found that most retailers simply don’t respond to reviews —
particularly negative ones. Think about the message that sends! I’m a customer
who’s had a bad experience with a business, so I do the only constructive thing
I can do to express my frustration: I write a review.
Probably like most consumers, I assume the
business will care if I have had a negative experience and try to fix it. If
they do, they’re better off. If they don’t, I might be left
feeling like they simply don’t care what kind of experience I’ve had. Am I
likely to buy products from that business again? Well, much less likely, right?
And if I do, I’m not going to feel good about it. I may tell my friends I
dislike that business, and they’ll probably avoid it in the future, too.
Perhaps most importantly, I will almost certainly not say GOOD things about the
business to my friends.
When someone takes time to leave a review —
good or (especially) bad — it’s the ideal time to engage. We all get this, but
surprisingly, the average response rate to negative reviews among leading
retailers is just 2 percent. It’s no wonder Amazon is eating away at retailers’
market share, with their frictionless shopping experience and infinite
inventory.
Now let’s consider a brand who does a good job
of engaging with customers. Nordstrom and Nordstrom Rack scored exceptionally
high for engagement, compared to many other retailers (61% and 79%
respectively). That’s because they place a premium on delivering exceptional
service and ensuring their customers are happy and engaged. And maybe that’s
one of the reasons that, while many retailers are struggling to keep their
doors open, Nordstrom and Nordstrom Rack are still reporting strong profits.
Investing In Customer Experience Is a Huge
Lever for Revenue
The power of engaging and connecting with
customers isn’t limited to the B2C world. According to Econsultancy’s Annual Digital Trends report, B2B companies identify customer
experience — the product of meaningful customer engagement — as the single most
exciting opportunity for 2020.
Temkin Group reports that companies that earn $1 billion
annually can earn $775 million more within three years of investing in customer
experience with “modest” results. The report found that to be true across
industries, with software companies earning the most ($1 billion over three
years). Success, effort and emotion, according to the report, were the three
factors impacting customer loyalty, and an improvement in emotion increases
loyalty more than any other factor. A meaningful customer engagement is the
best way to stir up the positive emotions that keep customers coming back.
Take a Walk In Your Customer’s Shoes
So how do you connect with customers on an
emotional level and improve customer engagement? Here are a few starting
points:
·
Analyze
the customer journey. How else can you
know what the customer's experience with your brand or locations is like? Take
their journey, and take note of and sticking points or frustrating
interactions. Are the emails you’re sending helpful and informative, or
intrusive and self-serving? Are your locations easy to get to and welcoming? Is
your staff friendly and professional? Do you follow up after customer
interactions and respond to reviews? Every one of these customer touchpoints
presents an opportunity for engaging with your customers in a mutually
beneficial way. Make sure you’re doing that, and if you’re not, it’s time to
start.
·
Listen
to what customers say about you. Today’s customers are vocal, and it’s easy to find
feedback on Google, Facebook, G2 and other review sites. You should also invest
in social media management, so you can actively monitor social commentary and
reviews as they come in — 42% of customers expect a response within 60 minutes,
and a delayed response is almost as bad as no response.
·
Deliver
seamless omnichannel experiences. If you analyze the customer journey properly, you’ll find
brand interactions occur across many channels — search results, emails,
websites, physical locations and even text. Make sure to deliver a consistent
and pleasant experience every time you engage with your customer, regardless of
channel. One bad or confusing interaction can ruin the opportunity to engage
effectively, and could even begin to break down the trust and loyalty you’ve invested in
building.
·
Pay
attention to all factors that comprise your Reputation Score. Increasingly, brands are turning to Reputation
Score as the most accurate measurement of customer experience.
It’s more thorough than NPS, because it takes into account all the factors
affecting your reputation. A critical component of the score is engagement, as
measured by your brand’s performance across every customer touch point. Knowing
and monitoring your Reputation Score is an essential step to mastering the
art — and reaping the benefits — of customer engagement.
Don’t Force It
An important thing to remember is you can’t
force your customers to engage with you. As HubSpot’s Paul Greenberg said,
"Customer engagement is the ongoing interactions between company and
customer, offered by the company, chosen by the customer." The customer
decides how to interact and engage — you can only create the opportunities, and
ensure that your diligent effort and reputation inspire people to take action.
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