HR & Management

Customer engagement – who’s leading the way?

6 min read

16 January 2017

It's often been said that customer engagement has never been more important, and it's true. In today’s crowded marketplace where the customer is king and the amount of choice is limitless, standing out from the crowd is crucial.

With the cost of retaining customers widely accepted as six or seven times lower than attracting new ones, it is no exaggeration to say that customer engagement can make or break a business. However, a lack of awareness and understanding of customer engagement is, I believe, a major sticking point.

All too often, businesses fall back on above the line advertising to draw in new customers, without thinking about the existing customer base and how to make them more engaged. Our recent research provides the missing link – a step-by-step overview of the customer journey and of how factors such as age, gender and geography impact on how engaged a customer is.

What it reveals about demographics

The study revealed some startling results in terms of who is, and is not, engaged. The survey of 18,000 people across 13 countries asked questions about people’s relationships with their bank, mobile phone provider and retailer. The results unlock the core traits that make up an engaged customer. Top of the list? The male, the married and the millennial.

A score was given to rank how engaged people are. For example, millennials had the highest level of engagement with an overall customer engagement score of between 68 and 71. The 65+ age range, by comparison, had an overall score of only 61. There was also showed a marked difference between people in a relationship and those not. Single people had a customer engagement score of 64, while married people had a score of 67. Interestingly, male respondents had a closer connection with banks (68) and mobile providers (65), while female respondents had a closer connection with their favourite retailers (69).

A geographical index

Turkish, Brazilian and American consumers were the most engaged, scoring between 70 and 72 – well above the global average. The lowest levels of engagement were seen in Denmark, Norway and Finland, with scores ranging from 58 to 60. Brazil and Turkey, however, consistently exceeded the global metrics across all three industries, pointing towards the increasing presence and importance of emerging markets and their impact on growth of the global economy.

While it is difficult to draw exact conclusions as to why, the huge amount of development and innovation happening in the technology arena in these countries could be a factor. Evidence suggests that tech-savvy consumers are happier for it, again encouraging not only spend but enhanced brand connections.

Find out what else needs to be taken into consideration if you’re to boost customer engagement

The model

The customer engagement model developed by Oxford Brookes is the first of its kind. It maps the pathway from initial brand awareness, through to first becoming a customer, building a relationship, increasing that engagement, and finally to the ultimate goal: becoming a loyal customer.

What the model reveals is that the initial interactions that take place between a customer and business takes place on a rational level. Who offers the best 4G coverage? Who has the lowest priced yellow cotton t-shirt? Who is offering the best interest rates on savings? When moving along the journey towards repeat transactions, the decisions become much more emotional. Who has given me the best service? Who do I feel represents me best? Where do I want my hard-earned money to be spent?

A customer’s path to making a purchasing decision is complex, and it is that companies that understand the role customer emotion plays in the engagement journey who will build deeper relationships with their customer base, which, in turn, help them build an army of loyal brand advocates. Rational and emotional behaviours must both be brought to bear.

What it means for businesses

The research showed that customers with the highest engagement score said that they would always recommend a company to their friends and family. This has even greater importance when you consider that half of the respondents in our research who came out as advocates had originally chosen to do business with a company because their family or friends used it. Advocacy breeds advocacy.

Why does this matter? Because ultimately engaged customers interact more with the brands they have a connection with. They follow them on Facebook, recommend them to friends and return time and time again to buy products and services. Whether it’s a new pair of trainers or a new mobile phone, the same principal applies. It is one that makes good business sense to foster and is the only way that a company will be able to extend its reach into a consumer’s life – and it is this which will drive advocacy, loyalty and business growth.

Karen Wheeler is UK country manager for Affinion

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