Tribal Engagement: Redefining Customer Engagement in the Age of Social Networking
Customer Engagement as defined at http://en.wikipedia.org/wiki/Customer_engagement highlights that in March 2006, the Advertising Research Foundation announced the first definition of customer engagement:
“Engagement is turning on a prospect to a brand idea enhanced by the surrounding context.”
Customer engagement can also refer to the stages consumers experience as they interact with a particular brand. This Customer Engagement Cycle, or Customer Journey, has been described as using a myriad of terms but usually consists of 5 different stages: Awareness, Consideration, Inquiry, Purchase and Retention. Marketers employ Connection Strategy to speak to would-be customers at each stage, with media that addresses the customer’s particular needs and interests.
The term ‘Customer Engagement’ is most often referred to in terms of online engagement with customers on the Internet. My interest lies in how we can apply the marketing practices of online marketers to the offline world. As traditional marketing practices begin to lose their effectiveness because of changing social practices (people watching less TV and spending more time on the internet researching and social networking) the challenge lies in how to engage the new generation of consumers without ignoring the value of their parents as consumers. The ‘interrupt and repeat’ advertising model is no longer as effective as it used to be because of the fragmented nature of media and audiences. The issue with the Customer Engagement definition is it assumes that consumers are all aged 18-26. Let’s assume that some of us (older) are not on FaceBook or we’re not twittering. Other generations still hold significant controls of consumer spend.
Customer Engagement should be viewed more as a mantra which is talked about beyond online marketing departments. As it becomes more difficult to keep customers loyal, and as the effectiveness of traditional advertising wanes, businesses will need to explore creative ways to engage customers and keep them engaged throughout their lifetime cycle.
The internet has enabled consumers to speak their minds about the products and services they like and dislike. It has also enabled consumers to become tribal again. They no longer voice their opinions in isolation but find peer groups with the same belief systems about a product or service. The internet has become a tribal-enabling medium. These common groups established over the internet have regained the power base from companies back to the tribe. If companies are to start understanding how to effectively address the changes brought on by technology, social practices and shrinking markets, they need to understand tribal behavior and how to engage tribes. Thinking needs to shift away from online and offline engagement and become centered on understanding tribal behaviour and how to influence tribal leaders.
Many companies refuse to listen to the tribe and are essentially living on borrowed time until a new entrant emerges who has listened to powerful tribe members that can influence the tribe’s preferences. The emergence of Linux as a major operating platform in IT is a testament to how powerful tribal leaders can change the direction of multiple tribes.
I can envisage a future where the fastest growing companies work in collaboration with their customers to design both products and services. Their business plans will have been written by tribal leaders of key customer types and power will be displaced from Board room to chat room.
How to turn away customers for good!
Customer Relationship Management (CRM) created a whirlwind in many organisations around the desire to keep customers for longer by managing their relationships. The focus, to a large extent, has been around how an organisation can create positive experiences for its customers.
I have lived and participated in numerous projects over the past 15 years that have attempted to interpret how to improve customer experiences to create better customer relationships. In my view many of the companies have ultimately failed in this task because of the lack of leadership and organisational support for such projects. In my opinion the problem lies with the approach taken with such projects. Instead of looking at ways we can make the customer experience better we should perhaps start off by asking everyone in the company: what are the things that send our customers packing to the competitors and hurt our brand for good?
Think about this for a moment: isn’t it better to work out what turns our customers away before we start looking at how to make things better? Often the focus for these customer relationship exercises are contained within the call centre or retail environment. What many organisations fail to understand is whatever good is created in the call centre may be completely neutralised by a negative experience elsewhere. The net result is that very little is achieved in regards to actually providing a positive measurable value back to the organisation through better customer relationships.
Let me share with you an example. One area of a large US bank spends a lot of money trying to win over customers and sell them new products. The customer feels good about the bank and takes a financial product such as a credit card. The customer has an average relationship with the bank until they are late to make payment on a due date. The bank then sends this customer to their “harassment” team to ring this customer up and alert them that they are late. Now this “harassment” team is using a predictive dialler and is calling this customer up 3-4 times a day. This customer is unable to take calls because the customer is now overseas. The customer finally takes the call and to his amazement the number of calls are all related to an overdue of $20. The customer informs them not to keep calling him as he is overseas and to send him letters or an SMS. The member of the “harassment” team continues to advise they will call him regardless as it is within their rights. The customer at this point is unhappy and cant’s wait to write a blog about his negative experience and tell the world how unhappy he is with this pathetic bank. Yes, of course the customer I am referring to is me.
The readers of this blog should start thinking about all the various customer interactions that send their customers packing….disconnections for non-payment, unreliable services, poor billing statements etc. These are the reasons why customers leave you and head off to the competition. There is no amount of good relationship building at the call centre or retail outlet that will change this. Perhaps, if companies started their customer relationship projects by reviewing all the reasons why customers leave then perhaps their energies would be diverted to fixing these issues before they embark on any customer journey exercises. It appears that the key is to work out the critical starting point in any customer improvement exercise. As outlined in this blog it is my opinion that the key starting point is to address all the known reasons why customers leave us first before we begin addressing how to enhance the relationship with our customers.
The Rocky Road Towards Customer Advocacy
“Customer loyalty” has been one of those over-used phrases that gets bantered around the marketing table of marketing executives of Fortune 500 companies. Execs are told that they need to get more customers buying, staying and returning for more. OK, we get all of that and now we have the new trumpet sound of “customer advocacy” being heard all over the place of the same companies that have discovered customer loyalty is in itself too challenging. For those of you who are not sure what customer advocacy is I can sum it up as “customer loyalty on steroids”. OK, we get the fact that this is the next level up the loyalty chain but why even start talking about this when many companies cannot even get loyalty right.
Most loyalty programs are fundamentally flawed: too expensive to administer, too complicated in the rules that bind them and too irrelevant to the customers to matter. Even worse, is when loyalty programs backfire and actually send consumers packing to the competition. Don’t companies think that consumers get annoyed when points expire, they get downgraded because they haven’t made enough flights or their hard earned points accumulated over a long period of spending affords them a measly movie ticket!?
I think it is time to re-think what companies are trying to achieve with loyalty programs and achieving advocacy. A reality check needs to be made to confirm if in fact these programs are achieving their objectives or can the objectives be achieved in another way. I personally would like to see a program that offers a no-nonsense discount on future products I purchase based on my loyalty to a particular brand and better post-sale service based on how long I have been a customer. Giving me cheaper and better products that I like is a sure way to earn my loyalty and respect for a brand. If I respect a brand then I am likely to promote it to my friends. Isn’t that advocacy and isn’t that every marketer’s ultimate goal?