You already know that e-commerce, social media, and mobile devices have drastically changed the way your customers find and patronize your business. But have you considered making a major change in the way you engage with them?
The “age of digital transformation” calls for an entirely new approach to customer engagement, argues the CRM software company Thunderhead.com. In a recent report, Thunderhead.com proposes a new model that it calls Engagement 3.0 (see diagram) for how businesses can build deeper customer relationships and stronger organizations.
“With the shift in power between customers and businesses that began with the Internet, more recently compounded by the combined impact of social and mobile technologies, and now with new business models increasingly collaborative in nature and based on real-time context, one-to-one [interactions between customers and businesses] has evolved into a more complex and multi-dimensional concept which we call customer engagement, writes Thunderhead.com CEO Glen Manchester in the forward to the company’s “Engagement for a Changing World” study, which is based on in-depth research of 2,026 U.S. customers and interviews with 33 chief marketing officers and other senior customer strategy leaders.
Trouble is, three of every four senior customer executives have no idea how to build customer engagement, Thunderhead.com’s research finds. “Our senior customer executive conversations revealed a lack of consensus over what customer engagement actually means,” the reports authors write, and “little consistency around how to actually implement engagement initiatives and strategies.”
Most senior customer executives fail by “focusing on individual customer interactions and experiences, and hoping that these will stitch together into lasting value for customers, rather than approaching engagement as an on-going, value-driven relationship between a customer and a business,” according to the study's authors.
Thunderhead.com says its research points to three ways customer expectations have evolved beyond most businesses’ capacity to respond:
- They’re more easily disappointed; more than half say they’ve seen no improvements in three years in their relationships with businesses.
- They’re quicker to judge businesses critically and less willing to forgive poor customer experiences; 25 percent will take their business elsewhere after just one bad experience, and 66 percent will leave after three.
- They’re more prepared to act decisively when their relationship with a business takes a turn for the worse; one third will even share bad experiences on social media with an average of 25 contacts.
Thunderhead.com also points to three big failures on the part of businesses, which aggravate these problems:
- Irrelevant and impersonal communications which are not informed by customer knowledge and insight
- Not keeping pace with technological change
- Disjointed communications caused by company silos
“Despite the fact that companies have access to ever more sophisticated and powerful technologies and solutions to understand their audiences, manage customer experiences and build engagement, customers believe companies have failed to improve their handling of customer relationships in the last three years,” the report states.
For example, Thunderhead.com researchers explain:
“Organizations are struggling to keep up with customers’ preferences around how and when they want to be communicated with. This is particularly difficult as these preferences are evolving constantly due to the rapid advancement of smartphones, mobile, and social technologies. These trends have also led customers to expect contact in real-time (or near real-time) – also an area where organizations are struggling.”
The company argues, “Customer engagement can only be achieved by treating every customer as if they are the most important customer you’ll ever have.” To do that, Thunderhead.com researchers recommend:
- Personalize interactions by tailoring them so that they are informed by customer preferences, customer information, and insights from their "journey" behavior.
- Make interactions contextually appropriate by knowing what state and situation a customer is in, and how they are technologically interacting with your business.
- Be relevant to the customer by making only offers that are appropriate to their situation.
- Use your knowledge of your customer to gain trust and elicit greater engagement.
- Consider the "journey" a customer is on, not just the transaction at hand, and align and adapt experiences and measurements accordingly in order to build engagement over the long term.
Finally, Thunderhead.com recommends that businesses take the following steps to unify the silos at their companies that are impeding effective customer journeys:
- Remove organizational barriers to managing the customer experience; address the obstacles that prevent the delivery of experiences throughout the entire customer journey.
- Ensure the business is learning from every interaction in every channel; monitor customer behavior and interaction and use insight to inform and enhance the customer experience.
- Consolidate customer insight and ensure it is transparent; provide systems to all departments giving them access to real-time information about customer interactions that are personal and context-aware.
“Our research makes clear that there is a gap between what customers expect from businesses and what businesses are actually providing,” Thunderhead.com concludes. “Businesses need to shift from a focus on improving individual experiences in isolation to managing the customer journey as a whole.”
Access to the complete 40-page report from Thunderhead.com is free.