Customer Engagement Is Your Secret Weapon To Beat The Competition
“The secret weapon that differentiates exceptional, enduring companies is the quality of their customer engagement, encompassing the full set of activities through which companies build direct relationships with their customers.”
That quote comes from Bill Magnuson, CEO and co-founder of Braze, in his introduction to its Global Customer Engagement Review). The idea of customer engagement has been talked about for years, but it wasn’t until the past two or three years that a critical mass of companies began attempting to improve their customer service and experience through engagement.
Just for clarification, the term customer engagement refers to the interaction between a company and its customers. It can be through direct human-to-human interactions or digital platforms such as email, messaging, apps and more. And while the Braze report focuses on retail, the concepts are just as applicable to the B2B world. The stats and data might be different, but the concepts are just as relevant.
The report’s overall message is clear. Companies that have formal customer engagement initiatives outperform those that don’t. For example, companies that properly message their customers see big results. Customers who are messaged (versus those that aren’t) are 7.2 times more likely to make purchases. These customers are also retained three times longer than customers who aren’t receiving messages. And, as for revenue goals, 56% of the brands that excelled in an engagement strategy exceeded revenue, versus just 19% that fell short. Do it right and the benefits are obvious.
There is a large amount of information in this report, and in my quest to always simplify the complicated, I’ll share three big ideas. As I usually do with this type of information, I’ll share a concept from the report and follow it with my commentary.
- Companies will increase their marketing budgets, which include customer engagement tools – An increase in spending to deliver a better CX has been a pattern for several years. The report says that of the 1,300 executives of customer-facing brands, 60% plan to increase their investment, and the top three areas are customer satisfaction measurement, customer engagement and mobile (which includes apps). Measurement is important. Renowned business management consultant Peter Drucker said, “You can’t manage what you don’t measure.” If you don’t know your numbers, you can’t track improvement, change, etc. That’s how you know if your customer engagement initiative is working. And as for investing in mobile, more and more customers are using their mobile phones for everything. It’s not good enough to focus on a website that is meant to be seen on a traditional desktop or notebook computer.
- Brands need their own definition of success – When leadership has an idea for the definition of success in their customer engagement strategy, is it shared with the entire company? In other words, does everyone know what defines success? Once they do, different departments, groups and divisions can work out a plan to meet that success criteria. Then once again, we are back to measurement. We must know where we are starting and where we want to end up.
- Brands are viewing customer engagement as critical to their growth – Brands are aware of their efforts, recognizing when they are doing well and falling short. The report states that those brands that are confident in their customer engagement efforts were more likely to hit revenue goals Knowing this should be the motivation needed to spend more effort and budget on their customer engagement initiatives. And, for those brands that exceeded their revenue goals, 66% plan to increase spending on customer engagement efforts this year.
The right customer engagement strategy not only contributes to your bottom line, but also gives you a competitive advantage. It’s this simple: Engaged customers buy more—and they buy more often. Recognize that if you’re not properly engaging with your customers, you are putting yourself at risk of losing business to your competitors who do.