Customer Recalibration Amidst An Economic Crisis
HOW SHOULD I BE MEASURING CUSTOMER ENGAGEMENT TODAY?
BY BROOKE NIEMIEC – CHIEF MARKETING OFFICER
Traditionally, companies define their “best” customers as those who spend the most with their brand. While purchase behavior is clearly one important measure of customer engagement, this transactional view of customer value is limiting. What about customers who are consistently advocating for your brand, have referred dozens of customers, or influenced others through detailed product reviews? What about customers who are giving you nearly 100% of their share of wallet, even if they’re spending less in total than customers who are only giving you a fraction of their category spend? A focus exclusively on spend is particularly short-sighted in our current economic situation, where customers’ ability and willingness to purchase are being directly influenced by factors out of their control.
Many companies supplement their customer spend monitoring with some form of customer engagement metric, typically captured in the form of survey responses that measure customer satisfaction or willingness to promote a company’s product or brand. While these responses can provide a valuable “in-the-moment” read on customer sentiment, you can’t make the assumption that checking a box that says “satisfied” on a questionnaire means customers are meaningfully engaging with different elements of your value prop. It’s time for a better approach to customer engagement measurement that considers the various ways customers can engage with you, the degree to which they’re engaging, and the relative value of those different types of engagement.
If the primary goals of engaging with your customers are to increase spend, retention, and satisfaction, you must begin with measuring—at the individual customer level—all of the ways that customers can engage with your company. This includes if they are responding to your outbound communications, how they are seeking out content and information, if they are adopting your products and services, and the degree to which they are advocating for your brand publicly. Only by studying as many aspects of customer engagement as possible can you truly understand the unique ways that each of your customers want to interact with your brand, which of those interactions have the most short- and long-term monetary value, and how to create truly personalized customer interaction strategies. As historical patterns of spend and behavior continue to change, now is the time to move the goalposts and create a better definition of customer engagement that looks beyond spend.
FOUR CATEGORIES OF CUSTOMER ENGAGEMENT
Setting purchase behavior aside for the moment, there are four categories of engagement that every business should be studying today.
When you reach out to a customer, does he or she respond in some way? This can include email opens and clicks, SMS reads and replies, survey responses, and any other signals that the customer has read, interacted, and/or replied to an outbound communication. Also make sure to consider other outbound communications that are particularly relevant or unique to your company, like sales associate outreach or mobile app push notifications. Responding when you reach out is an important indicator that customers are receptive to what you have to say.
Is the customer proactively coming to you for content or information? This can include direct website visits, mobile app downloads, and customer service interactions. We also consider the sharing of personal data as part of this category, since customers do so in order to seek out something from your company—even if it’s just a more personalized experience. A seeking action indicates that a customer thinks you may be able to address one of their needs.
Does the customer take advantage of your products and services? While this certainly includes breadth of products purchased, it also includes the degree to which customers take advantage of any supplemental services, programs (such as a loyalty program), and purchase channels. As you invest in new elements of your customer experience, identifying which customers take advantage of those features can help you measure the ROI on your investment. These customers may also be great allies in helping you refine new offerings before you release them to the entire customer base.
Is the customer talking about your brand? Engaging with you directly on social media, writing product reviews, and referring other customers to you are all important ways that customers can advocate for your brand. These forms of influencing can be even more valuable to your brand than that individual customer’s spend. Keep in mind that if customers are frequently talking about your brand, it may not always be positive. If a customer provides thoughtful reviews for every purchase, some of those may be negative. A critical review is still a form of engagement, and there is value to it. It gives your company an opportunity to learn and correct, and can help other customers decide if a product is right for them, potentially preventing additional negative experiences or costly product returns.
While the specific elements of engagement within the four categories outlined above will vary slightly for your company, the most important first step is to reimagine your definition of customer engagement by identifying the new relevant engagement metrics for your brand. Even if you do not yet have access to all of the data you are interested in right away, that is okay. Simply capturing a list of what you want to measure is a step in the right direction.
Also, keep in mind that customers are not likely to neatly fall into one of these engagement categories. It may be tempting to assume that your “best” customers are those who participate in all types of engagement. In reality, customers will have various degrees of engagement—some may engage deeply within a single category, while others may engage at a surface level across all four categories. Instead of trying to get every customer to engage in every way, recognize how customers want to engage and leverage those preferences and strengths to deepen your relationships and advance your brand.
As you become more skilled in this practice, you can overlay purchase behavior on top of these other forms of engagement to understand how various behaviors and engagement journeys correlate to revenue. With so much uncertainty still in the market, it may take time for you to map the relationship between engagement, purchase behavior, and bottom line performance, but now is the time to start building an updated view of engagement that will enable you to meaningfully interact with customers, even during a time where their ability and willingness to purchase is in flux.