While most executives would agree that improving customer engagement is a good thing; finding the evidence to benchmark your own company’s spending on it is difficult. Perhaps for some that is why it is not always seen as a priority. Perhaps also we should be more disciplined at gathering information that helps us assess the ROI from customer focused activities.
Gaining customer intimacy, nurturing customer loyalty, improving long-term customer relationships and getting the right information to drive necessary actions is what Bsquared define as ‘customer engagement’. We specialise in helping companies do this in the business-to-business world.
It is precisely this customer intimacy - measuring the strength of customer relationships and the value this returns to the business – which is hard to quantify and measure.
No-one questions the investment made in R&D to deliver product leadership. In fact, depending on the industry, there are norms that people would quote as a percentage of turnover that must be invested to be seen to be innovative and deliver results.
No-one questions the investment made to deliver operational excellence. In any case the return on this can be easily measured through such things as savings in time, removal of wasted effort, reduced inventory, higher utilisation of resource - human or otherwise, and improved quality.
We encourage our clients to look at and measure the lifetime value of their customers. We encourage them to think of the impact their customer engagement is having and focus on such things as new business opportunities, reduced churn, business referrals, being able to anticipate rather than react to issues and consequently reduce risk.
Not always easy to do but it does make ROI much more apparent.
An organisation’s focus on customer engagement may just be on one area – most likely customer retention – with little focus on a whole customer experience management strategy.
We encourage our clients to look wider - starting with the gathering of the right customer data – which can be from internal systems, customer interviews and surveys. This then enables them to focus on customer lifetime value and to have information flowing into operational and strategic organisational decision making. Customer engagement then provides clear value throughout the organisation.
Companies must strive to meet the high standards – pricing, service, product superiority, operational excellence – demanded by customers. Loyalty is no longer a given, it must be earned. Loyal customers who are advocates of your business can make valuable referrals and even help save on other costs – e.g. sales, advertising. Customer engagement must be integrated in the whole organisation. Fully engaged customer stay longer and are more profitable.
Perhaps it would be easier just to ask “what is the cost of not engaging with your customers?”