The era of customer engagement marketing
Recent research we commissioned with the Customer Contact Association (CCA)* has found that over two thirds of businesses are making a concerted effort to show consumers they are listening and acting on what consumers say.
This trend marks a big step forward from the time when companies provided goods or services, and if people wanted them, they bought them, and if they didn’t, they didn’t. It was a very transactional relationship. Today, largely thanks to social media, these relationships are increasingly conversational, based on relationships and experience.
The rise of tech-driven marketing
In order to build stronger relations, marketing and customer services are increasingly a high-tech business, data-driven and highly sophisticated. Professionals within these realms still need their insight and intuition, but they also need an intensely detailed level of knowledge of how to manipulate and analyse information about customers. This makes it all the more strange that consumer demographics have not moved on beyond the reductive terms of age and socio-economics. The simplistic terms of Baby Boomer/Gen X/Millennial and ABC1C2DE have not developed much since the days when David Ogilvy and his ilk were still plying their trade.
Not only is marketing still hampered by a lack of intelligent profiling, but the manner in which marketing activities are discharged also suffers from a lack of accurate information about customers. Demographics cannot be cast aside, but the problem is less about personalising tactics, as it is more about aiming the right tactics at the right people. The way that mobile technology, for example, has enjoyed such take up across different age groups, shows how dated stereotypes underpinning older groups are less valid than ever before. Changing personal priorities and societal expectations also mean that the suppositions about income level and status are often built on shaky foundations.
A different approach to customers
To interact successfully in today’s connected, multi-channel consumer environment requires thinking about consumers differently. That means having new kinds of demographics that genuinely reflects customers’ attitude to the companies they respect. Doing so opens the door to a better relationship with them, one that takes account of what is most convenient for the customers, not just what is most efficient for the company.
However, to say that service can do as much for a company’s brand as marketing is not strictly new. What is new is that information gained from an analysis of customer behaviour, aimed at promoting and facilitating better service can in fact illuminate and quantify the benefits of marketing activities. In fact, the right customer types, treated in the right way, can turn customers into very effective marketers themselves – prepared to recommend and advocate your brand over others, both on and offline.
So-called ‘advocate marketing’ has been examined in some depth over the past few years, as social media platforms mature, and improved analytics make these things easier to track. However, analysis of the rest of the customer base – beyond those who are obviously already advocates – can afford some insight into how marketers can enlarge this group, and reap even more of the benefits.
The birth of new demographics
Aside from those customers already loyal, high-spending and likely to recommend your company; we identified three other consumer ‘tribes’ within our research which was carried out in five markets**. Some of which can more easily be brought within the ‘brand champion’ fold than others, but all of which have the potential to become the kind of customer that gives more than just their custom to your business. Firstly, our research uncovered a significant proportion of customers with real loyalty to their service providers, and who are very satisfied with their experience but who are unwilling to communicate with those companies – the so-called ‘silent likers’.
Though reasons for this disengagement vary widely, most simply do not see the value in communicating with their service providers. That’s not too surprising, as this group are the least likely to receive ‘thank-yous’, rewards or special treatment. However, our analysis suggests that introducing such measures, along with better communication, and a better demonstration of the good uses that feedback can be put to, will encourage at least some of these customers to become brand champions. This requires a change of attitude in how businesses deal with rewards, free gifts and customer perks, away from lavishing these on those who complain and threaten to take their business elsewhere. Instead they should recognise that there are greater benefits in ensuring the loyalty of long-term satisfied customers.
Our research also discovered that there are a number of customers that are very difficult to engage, but whose attitude to their service providers is more or less ambivalent – the fence-sitters. They are perhaps less conscious of the brand and its values, but simply consider the provider to be the best option at the time. Very few will discuss brand experiences, suggesting their prevailing attitude is ‘middle ground’. Combined with their reluctance to engage in the first place, this makes them essentially a useful test for a company’s customer-service capabilities. It is not impossible to turn such consumers into brand champions and, if successful, it is a very strong endorsement of its service capabilities and engagement skills.
Those most likely to do the complaining, to threaten and, before long, to actually take their business elsewhere, are those we dubbed the ‘churners’. Reducing customer churn is a constant preoccupation for almost all service providers, but our research showed that there is a certain level of churn which can never really be eliminated, and that it is a waste of resource to attempt to do so. Perversely, perhaps, this group tend to gain more rewards, gifts and incentives than almost any other – mostly because customer-service representatives are authorised to dole these out in response to a threat to leave.
There is, of course, a limit to how many times this will work – and this is the crux of what needs to change in the wider field of customer service. While some of the benefits of a different way of looking at the customer base take time, effort and further investment to come to fruition, the proper allocation of incentives, gifts and rewards is one whose effects will be felt immediately. Doing this successfully requires having a 360˚ view of your customers to understand their preferences, likes and dislikes, which can be gained by listening to their voices. Organisations need to unify such initiatives within a single Voice of the Customer Analytics strategy, which encompasses contact centre, social, in-store and surveys. The customer service and marketing functions can be more effective than any other part of the business in gathering customer insights and making them actionable. And, they should be doing all they can to inform customers that they are acting on what they say.
Making sure that customer service and marketing resources are expended in the most efficient manner possible makes it far easier to gain the affections of customers, who may not immediately be open to promoting a company to their friends and family. While there will always be those who see rewards as their right, and will never have their minds changed by any kind of engagement, an intelligent and targeted approach to customer service makes it much easier for a company to grow their base of customer advocates, and reap all the benefits that this brings.
Brand champion country breakdown: Russia (21 percent), Poland (18 percent), US (17 percent), UK (13 percent), Germany (10 percent).
Silent liker breakdown: UK (30 percent), US (26 percent), Germany (26 percent), Poland (16 percent), Russia (14 percent).
Fence-sitter breakdown: Poland (18 percent), Russia (17 percent), Germany (16 percent), UK (16 percent), US (14 percent).
Churner breakdown: Germany (38 percent), Russia (27 percent), UK (24 percent), Poland (23 percent), US (23 percent).