02 May 2010
Posted in C
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Customer engagement (CE) refers to the engagement of customers with one another, with a company or a brand. The initiative for engagement can be either consumer- or company-led and the medium of engagement can be on or offline.
Unlike marketing terms such as positioning, customer engagement has not been traced to a single source. Customer engagement has been discussed widely online; hundreds of pages have been written, published, read and commented upon. Numerous high-profile conferences, seminars and roundtables have either had CE as a primary theme or included papers on the topic.
Customer engagement marketing places conversions into a longer term, more strategic context and is premised on the understanding that a simple focus on maximizing conversions can, in some circumstances, decrease the likelihood of repeat conversions (Customer engagement interview with Richard Sedley). CE aims at long-term engagement, encouraging customer loyalty and advocacy through word-of-mouth.
Online customer engagement is qualitatively different from offline engagement as the nature of the customer’s interactions with a brand, company and other customers differ on the internet. Discussion forums or blogs, for example, are spaces where people can communicate and socialize in ways that cannot be replicated by any offline interactive medium. Customer Engagement marketing efforts that aim to create, stimulate or influence customer behavior differ from the offline, one-way, marketing communications that marketers are familiar with. Although customer advocacy, for example, has always been a goal for marketers, the rise of online user generated content can take advocacy to another level.
The concept and practice of online Customer Engagement enables organizations to respond to the fundamental changes in customer behavior that the internet has brought about, as well as to the increasing ineffectiveness of the traditional 'interrupt and repeat', broadcast model of advertising. Due to the fragmentation and specialization of media and audiences, as well as the proliferation of community- and user generated content, businesses are increasingly losing the power to dictate the communications agenda. Simultaneously, lower switching costs, the geographical widening of the market and the vast choice of content, services and products available online have weakened customer loyalty.
So today, leveraging customer contributions is an important source of competitive advantage – whether through advertising, user generated product reviews, customer service FAQs, forums where consumers can socialize with one another or contribute to product development.
Amazon recently re-branded into 'serving the world's largest engaged online community', the World Federation of Advertisers (WFA) has created a 'Blueprint for Consumer-Centric Holistic Measurement' and the Association of National Advertisers (ANA), American Association of Advertising Agencies (AAAA) and the Advertising Research Foundation (ARF), have put together the 'Engagement Steering Committee' to work on the customer engagement metric. Nielsen Media Research, IAG Research and Simmons Research are also all in the process of developing a CE definition and metric.
Online customer engagement refers to:
A social phenomenon enabled by the wide adoption of the internet in the late 1990s and taking off with the technical developments in connection speed (broadband) in the decade that followed. Online CE is qualitatively different from the engagement of consumers offline.
The behavior of customers that engage in online communities revolving, directly or indirectly, around product categories (cycling, sailing) and other consumption topics. It details the process that leads to a customer’s positive engagement with the company or offering, as well as the behavior associated with different degrees of customer engagement.
Marketing practices that aim to create, stimulate or influence CE behavior. Although CE-marketing efforts must be consistent both online and offline, the internet is the basis of CE-marketing.(Eisenberg & Eisenberg 2006:72,81)
Metrics that measure the effectiveness of the marketing practices which seek to create, stimulate or influence CE behavior.
In March 2006, the Advertising Research Foundation announced the first definition of customer engagement the first definition of CE at the re:think! 52nd Annual ARF Convention and Expo:
"Engagement is turning on a prospect to a brand idea enhanced by the surrounding context."
However, the ARF definition was criticized by some for being too broad.
Customer engagement can also refer to the stages consumers travel through as they interact with a particular brand. This Customer Engagement Cycle, or Customer Journey, has been described using a myriad of terms but most often 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 their particular needs and interests. When conducting Search Engine Marketing & Search Engine Optimization, or placing advertisements, marketers must devise media and/or keywords and phrases that encourage customer flow through the Customer Engagement Cycle, towards Purchase.
Because the various definitions often focus on entirely different aspects of CE, they are not in every case competing definitions but, rather, illuminate CE from different perspectives. Eric Peterson's definition for example frames CE as a metric: "Engagement is an estimate of the degree and depth of visitor interaction against a clearly defined set of goals."
At the moment the ARF, World Federation of Advertisers, Nielsen Media Research, IAG Research and Simmons Research are in the process of developing a definition and a metric for CE.