As business owners and managers, it’s in our best interests to create trust and gain commitment from our customers – after all, it’s generally much easier to generate sales from existing customers than trying to win new customers over.
The good news is that with the rise of new and easily measurable technologies and channels such as mobile devices and social media, we now have the potential to dramatically improveour levels of customer engagement. The information we can now receive on transactions, loyalty programmes, likes, dislikes, and preferences gives us a really deep level of customer intelligence. Through these insights we can deliver real relevancy to our most valuable customers and further increase their loyalty.
However the bad news is that recent research by Columbia Business School shows that 44% of marketers are not personalising their marketing communications and 28% still do not know which high-value customers to focus on.
Businesses should be offering a consistent and integrated experience across all channels to our customers. But research by UK think-tank Econsultancy found that, while 90% of organisations want to offer their customers a great multi-channel customer experience, only 2% of organisations think they are doing it well.
In order to overcome these challenges, build loyalty and increase sales, we need a customer engagement strategy. Here are my top four principles of customer engagement to help you get started.
Principle One – Social Proof
In 1969 Stanley Milgram, a social psychologist, conducted a social contagion study on 42nd Street, New York City. He wanted to test whether people will do things if they see other people doing it. So he and his colleagues stood on the street and stared up at a sixth floor window. There was nothing to see, but they wanted to see how social contagion worked. Their results found that 45% of passers-by stopped if one person was looking up but a massive 85% of the passers-by stopped if 15 people were looking up.
This study is still pertinent today because, thanks largely to new digital channels such as social media, we are now more influenced than ever before by viral marketing and word of mouth. In general, we are more persuaded by people that we like. This is why Facebook and other trusted social networks have become the preferred point of engagement for many of us. The more people see others doing something, the more they want to check it out too.
There are clear implications for customer engagement. This year’s Edelman Trust Barometer shows that there is a steady decline in people’s trust in companies. On the other hand trust in peers has increased by 75%. So businesses need to harness the power of personal recommendations and referrals.
Key: Make sure your social proof is focused, plentiful, credible and trusted. Get as many testimonials and endorsements as you can to demonstrate social proof to your audiences.
Principle Two – Right Touching
This is all about touching people in the right way, at the right time, with the right content, on the right channel. But in order to get this right, you have to know your audience.
So how do you make sure you are right touching? Some key things to think about are:
- Where are your customers online?
- What devices do they use?
- When do they use those devices?
- What do they do online?
- And what do they want from you online?
Smart companies are beginning to take Predictive Analytics seriously. Predictive Analytics deals with extracting customer information from current and historical data and using it to predict future trends and behaviour patterns. Through these insights we can deliver real relevancy to our most valuable customers and further increase their loyalty.
Key: Ask the right questions before you start. Use the answers to connect with your customers and find new and meaningful ways of engaging with them.
Principle Three – Story Telling
Business leaders like Jack Welch of General Electric fame have always understood the importance of storytelling to engage. Research by Salesforce also found that one good 3 minute digital story is more effective than having 45 highly efficient sales people on the phone all day.
More and more organisations are investing in trans-media storytelling to tell stories through several different channels. One of my favourite examples of this also happens to be one of my favourite TV dramas – Mad Men. Fictional Mad Men characters like Betty Draper and Peggy Olson have their own Twitter pages where they talk about their everyday lives. And ad agency boss Roger Stirling has even published his own book of wit and wisdom, which you can buy on Amazon.
Storytelling is so popular because it allows you to connect at an emotional level with your customers. As the author Maya Angelou remarked, “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel. “
Key: Use storytelling to emotionally connect and engage with your customers.
Principle Four – Reciprocity
People tend to return a favour. This is because reciprocity is a strong factor in human behaviour. With reciprocity, a small favour can produce a sense of obligation to return a much larger favour. So we can afford to be generous and try to give as much as we can within reason. We will get more back in return.
Even a small gesture can go a long way to establishing a long, profitable relationship. For example, for years the Disabled American Veterans (DAV) organisation sent a basic form letter to potential donors, asking for their support. With that basic letter, the DAV had enjoyed an 18% response rate. But using the principle of reciprocity, the DAV decided instead to also include in their donor package a small gift of personalised address labels. As a result, the response rate jumped to 35% – an increase of nearly 100%!
Key: Be generous – think about what additional rewards you can give to your customers.
Bonus tip: Some new marketing ‘P’s!
As well as the usual Ps of Price, Product and Promotion we need some new Ps for customer engagement in the digital age.
My top 10:
- Plan – work out your engagement strategy and be clear what success looks like
- Predict – base your strategy on analytics to predict future behaviours
- Performance – examine your customer service/cross channel experience
- Platforms – be ready for Web 3.0 and the mobile age
- Proof – harness the power of peer to peer recommendations
- People – change the mix of your teams and add new analytic skills
- Personalise – increase relevancy/right touch/adopt reciprocity
- Participate – listen and engage in conversations/tell stories/
- Play – gamify everything/experiment with Augmented Reality
- Place – think SoLoMo (Social – Local – Mobile)
This article was first published in Marketing magazine and is an extract from a presentation I gave at the Sitecore Symposium in Melbourne in October 2012.