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5th Annual Online Customer Engagement Survey

Report 2011


5th Annual Online Customer Engagement Survey

Report 2011


5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

Econsultancy is a digital publishing and training group used by more than 200,000 internet professionals every month. The company publishes practical and time-saving research to help marketers make better decisions about the digital environment, build business cases, find the best suppliers, look smart in meetings and accelerate their careers. Econsultancy has offices in New York and London, and hosts more than 100 events every year in the US and UK. Many of the world’s most famous brands use Econsultancy to educate and train their staff. Some of Econsultancy’s members include: Google, Yahoo, Dell, BBC, BT, Shell, Vodafone, Virgin Atlantic, Barclays, Deloitte, T-Mobile and Estée Lauder. Join Econsultancy today to learn what’s happening in digital marketing – and what works. Call us to find out more on +44 (0)20 7269 1450 (London) or +1 212 699 3626 (New York). You can also contact econsultancy online. econsultancy.com

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cScape is an award-winning, full-service digital agency that ranked number 18 in NMA’s design and build 2010 top 100 poll. Based in the UK but operating internationally, cScape is part of the AIM-listed cScape Group Plc. We offer digital marketing/customer engagement campaign strategy, planning, management and training (including Social Media governance); graphic design and rich media services including app development and video, and technical health checks/build (intranet, extranet, website and mobile) for customers such as Barclays, Catlin, Deutsche Bank, Just Retirement, Toshiba, Bauer Media, Akzo Nobel, Sony, Aviva and CIPD (Chartered Institute of Personnel and Development). We practice what we preach in terms of engaging our own clients, many of whom have retained cScape to help them with their digital marketing for many years. So what made these customers choose us? The main reason cited is our unique mix of strategic, technical and creative services, combined with our ability to draw on multi-disciplined engagement experts from around the globe. We’ve won multiple awards for our information architecture, user experience and creative work. In addition, cScape is technically strong across the board, with particular expertise in Microsoft SharePoint technologies, holding

Gold Partner status with a Microsoft Most Valuable Professional (MVP) as our Chief Technical Officer. We’ve an exciting programme of events and publications planned for 2011. For more information about these or to find out more about the Customer Engagement Unit and cScape’s other services please contact Theresa Clifford by email t.clifford@cscape.com or call us on + 44 (0)20 7689 8800. Find out more about cScape and the Customer Engagement Unit: www.cscape.com


5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

53th Annual Online Customer Engagement Report 2011 Introduction

4

Executive summary and highlights

7

Methodology and sample

9

Findings

12

Customer Engagement strategy

12

Importance of Customer Engagement to the organisation

12

Attributes of an engaged customer

12

Success of Customer Engagement strategy

15

Outsourcing Customer Engagement activities

15

Satisfaction with online Customer Engagement initiatives

16

Tactics, behaviours and attitudes

16

Tactics for Improving Customer Engagement

16

Investment to drive increased Customer Engagement

20

Innovation techniques for fostering Customer Engagement

20

Experiences with innovative techniques

22

Changing behaviour and attitudes

23

The social enterprise

24

Adoption of technology for product development and innovation

24

Adoption of technology for internal (employee) communications

24

Adoption of technology for customer service improvement

27

Planned investment for customer service improvement

27

Link between Employee Engagement and Customer Engagement

28

Mobile

29

Investing in the mobile channel

29

Using mobile marketing to build engagement

29

Challenges related to mobile channels

29

Mapping and measurement

34

Mapping customer experience to gain a single view of customer

34

Methods of gathering customer intelligence

34

Challenges related to measuring and understanding Customer Engagement

35

Comments on the findings Dr Dave Chaffey

13

Ron Shevlin, Amanda Davie

14

Adam Hibbert

17

Rob Killick, Lucy Conlan, Jerry Michalski

18

Linus Gregoriadis, Jordan Gross

19

Richard Sedley

25

Jim Sterne

26

Hugh Gage, Steve Woods, Theresa Clifford

30

Ian Jindal, Bruno Anoca Lopes

31

Becky Carroll

32

Ed Lloyd-Williams

33

Clare O’Brien, Terry Hodgetts

36

Steve Kennedy, Ben Robb

37

Previous Customer Engagement reports

38

Report sponsor

40

Survey partners

41

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5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

Introduction Welcome to the 2011 Online Customer Engagement Report. Now in its fifth year this annual report has become the benchmark for organisations wanting to assess their Customer Engagement strategies. We have had a terrific response from individuals and companies on both client and agency side with over 1,000 participants from a wide range of industries. The survey continues to be the largest of its type anywhere in the world. It is exciting to see that the survey continues to gain an increasing number of responses (now over 35%) from outside the UK, with participants from the Americas, Africa, and Asia-Pacific regions.

The past year has seen a dramatic increase in companies not only listening but now responding to the concerns of their audiences via channels that only a few months ago were seen as a threat or at the very least uncontrollable

and consolidate on their early experiences and invest more in the future.

As always, there is a lot hidden away in the results of this year’s survey, but if I had to highlight three main things that strike me as important this year it would be these; the maturation of mobile as a platform, the potential end of the destination as the central place for companies to do business as they increasingly move to third party platforms, and the continuing emergence of social technologies within the enterprise.

Why is this important? All the talk of ‘shopping from the palm of your hand’ aside (I myself quite like shops, and don’t see them going anywhere soon). This shows a significant move towards engaging with customers in their ‘native spaces’ (i.e. away from the retail site and the computer). There is a growing appreciation that the path from discovery to purchase can be a convoluted and personal one for each individual. Location based services and augmented reality appear to be strengthening too, as companies are beginning to move away from experimentation and novelty into some seriously useful applications. The key to making this work is simplicity and problem solving: many apps are still rather one dimensional and do not focus enough on end user benefits. I don’t merely want a portable catalogue of your products, I want to know where they are in stock near me, what other people think about them, and to see how they are being used in a context similar to mine.

This year’s results show a significant increase in mobile activity and its role in creating and maintaining relationships with customers. Only eighteen months ago, developing applications for mobile devices was viewed as a slightly eccentric indulgence, limited to the most brave and forward-thinking of brands. Now, everyone is developing iPhone and Android apps and it appears, they are not only seeing positive results but they also expect to build

Since the last Customer Engagement report there are an increasing number of organisations who are comfortable doing business on third party platforms. Facebook, Twitter, eBay and Amazon have already become truly measurable and credible spaces for doing real business, and have adjusted their services, advertising and revenue models to capitalise on this. Many customers are now using Twitter, for example, as their key conduit

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With the increasing focus of marketing and customer services now on the individual, how is an enterprise expected to manage, empower and govern these interactions effectively?

for communication with suppliers of services and products, and the relationship is becoming increasingly balanced and mutually satisfying. These platforms are jostling to become the single touch point for their user’s online activities (see Facebook’s launch of integrated SMS and email services as a telling sign of this), and that changes the rules somewhat around accessing behavioural data and targeting groups of users.

warm an audience to your message. My advice? Look inside your organisation for the willingness to engage and take responsibility for the one to one customer interaction, plan properly, ask for help where you aren’t sure, and above all, trust your people.

This is tremendously empowering and levelling for smaller enterprises or those yet to establish a major online presence. You can get famous for being good again without the need for a massive media spend.

Trusting and empowering your people leads me on to the final issue I want to raise: With the increasing focus of marketing and customer services now on the individual – individual communications, individual combinations of products and services, delivered by individuals – how is an enterprise expected to manage, empower and govern these interactions effectively?

The past year has seen a dramatic increase in companies not only listening but now responding to the concerns of their audiences via channels that only a few months ago were seen as a threat - or at the very least uncontrollable. As these pioneers have discovered, there is no substitute for people. Social media has put people right back at the centre of things – just where they should be. Social proof and recommendations continue to establish themselves as increasingly important, with companies looking to their customers as brand advocates, content creators and critics. Of course engaging with customers via social media does have its risks (and certainly its governance issues, particularly within large and disparate companies), but the stories of satisfaction far outweigh those of disaster, and sometimes a bit of imperfection can actually

It seems a look outside the office gates is a good place to start. For a while now the most advanced social media has existed outside the organisation (Facebook, Twitter) and users are comfortable with technologies that a few years ago were seen, even in fairly rudimentary forms, as being at the vanguard of social technology. Where traditional technologies were often pioneered within wealthy, resource-rich enterprises, now we see the opposite phenomenon; millions of users living in a dynamic social space outside their places of work, expecting to realise some of the benefits this behaviour can bring when they arrive at work each day. The technologies are available for an organisation to effectively build its intellectual capital and knowledge management while empowering its front line staff. It may have been a slow start, but things


5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

are beginning to change and forward thinking organisations are reporting seeing tangible improvements as a result of their staff taking responsibility and initiative within individual customer relationships empowered by social technologies and learning. In turn customers are showing their gratitude through their continued loyalty and positive feedback in what continue to be very challenging times. A couple of years ago, a previous edition of this report proposed the ‘death of digital’ i.e. digital as a discreet activity was dead. This seemed provocative but over the past couple of years this forecast has been realised with a significant shift towards integration within traditional advertising and communications agencies towards ‘full service’ where digital is viewed as one of an array of platforms (along with print, display and broadcast). There has certainly been a maturing of the campaigns we have seen here at cScape; customer service, product launches, e-commerce and retail are now truly blended activities, seen by clients and agencies alike as key components of a successful campaign. Over the past five years, as this report has evolved, so has the industry in which its participants operate, and I sense that Customer Engagement is at a crossroads. Clearly, those who are prepared to invest resources, time and – above all – allow for experimentation,

mistakes and learning, are reaping tangible rewards as engagement becomes part of the fabric of day-to-day interactions with customers. While this is good news, I feel it is likely that recognising activities as being discretely ‘Customer Engagement’ driven is going to become more of a challenge in the future. In the same way ‘digital’ has died, and that ‘new media’ is now a quaintly out-dated term, we may see a similar evolution for customer engagement, and soon it will be unrecognisable from the activities of the most successful organisations. While that is likely to make our jobs as strategists, designers, researchers and planners more difficult, I welcome it with anticipation. So, I now hand over to the many brilliant and creative minds who have offered their thoughts, insight and analysis to this report. We welcome back a number of previous contributors as well as a few new faces I am very excited to introduce. Many thanks to them and of course to you for reading.

5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

“In another five years the marketing and customer service functions of the year 2000 will be unrecognisable” Jerry Michalski, p18

To all those who took the time to complete the survey, thank you – you make it all possible. Thanks also to Linus and the team at Econsultancy for your hard work, and to my colleagues at cScape: Sarah, Richard, Theresa and Rob. Dom Graveson Lead Consultant, cScape Customer Engagement Unit d.graveson@cscape.com Twitter: @dombles

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Executive summary and highlights

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5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

Executive summary and highlights This is our fifth annual Customer Engagement Report. More than 1,000 companies and agencies took part in the research, which took the form of an online survey in September and October 2010. The report looks at trends relating to customer behaviour and attitudes, and the tactics and techniques being used by companies to cultivate engagement. Companies continue to use a range of established techniques such as email newsletters, blogging and branded communities or forums. Businesses are now more likely to be using both social media and mobile channels to deepen customer relationships and improve levels of service, including through the use of social networks, Twitter, mobile applications and location-based marketing. • Email newsletters (72%), presence on social networks (48%) and micro-blogging (46%) are the tactics most likely to result in a tangible improvement to companies’ online customer engagement. • More companies than last year are planning to increase investment in user-generated content (+13%), on-site branded communities/forums (+9%) & rich on-page interactive experiences (+8%). • The vast majority of company respondents (73%) are planning to invest in the mobile channel in 2011. This compares to 60% who said they planned mobile investment at the same stage a year ago.

or “quite successful” (65%). This combined figure is an increase from 71% last year. One of the most notable findings from this year’s research is the commitment that companies are demonstrating to customer service as a way of increasing loyalty. • 51% of companies say they are already using social networks for customer support improvement, up 15% from 36% last year. • More than half of companies (54%) are planning to invest in social media as a customer service channel. It is clear that more companies are now recognising the importance of a joined-up approach internally. Some 44% of companies indicate that they are either “quite advanced” (38%) or “very advanced” (6%) at joining up touch points. This compares favourably to 2010 when only 3% said they were very advanced, and 33% said they were quite advanced. Customer Engagement strategy • The proportion of client-side respondents who regard customer engagement as “essential” has decreased from 55% to 50%, the same level as for the first Customer Engagement Survey carried out four years ago. Agency results are slightly different – the proportion of agencies who say that Customer Engagement is “essential” for their clients has increased to 57%, up from 55% last year.

Companies and agencies continue to develop innovative techniques to help foster customer engagement, borrowing features from social gaming and networking. Small but significant percentages of companies are now using techniques such as time-limited activities (18%), rewards for online behaviour based on engagement (16%) and playful interfaces (10%).

• Similarly to last year, organisations have reaped the advantage of engaged customers who recommend their product, service or brand (38%). They are benefiting more from engaged customers that purchase regularly (+8%), provide regular feedback (+2%) and are more tolerant of mistakes (+2%).

As a result of both more established and cutting-edge techniques, organisations are typically reaping the benefits of their Customer Engagement investments, and there has been a slight improvement since last year.

• A large proportion of organisations will continue to invest in email newsletters (62%), presence on social networks (58%) and video (52%) to drive online Customer Engagement over the next 12 months.

• Almost three-quarters of responding companies (74%) believe that their customer engagement strategy is either “very successful” (9%)

• Significant numbers of company respondents say they have not been able to measure video (33%), micro-blogging (30%), presence on social networks (29%) and rich-on page interactive experiences (28%)

Tactics, behaviour and attitudes

The social enterprise • Significantly more companies than last year are using social networks (+7%) and video sharing (also +7%) for product development and innovation. • Almost one half of responding companies (45%) are using intranets for internal communications. Use of internal micro-blogging utilities (+7%), employee blogging (+4%) and instant messaging (also +4%) has slightly increased in the last year. Mobile • The vast majority of company respondents (73%) are planning to invest in the mobile channel in 2011. This compares to 60% who said they planned investment at the same stage last year. Less than a fifth (19%) are planning to invest significantly during 2011. • The use of mobile marketing to build Customer Engagement has significantly increased in the last year. More than a quarter of organisations (28%) are creating applications, an increase of 12% since last year. Almost a half (47%) are planning to do so within the next 12 months. • Broadly speaking, companies are much more likely to be planning a range of mobile-related initiatives than was the case a year ago. • A larger proportion of companies than last year are planning to use location-based marketing (+15%). • The main challenges faced in relation to the mobile channel are lack of expertise and budget, internal buy-in and integration issues. Mapping and measurement • The majority of company respondents (57%) have found web analytics to be among the three most useful methods for gathering intelligence in the context of Customer Engagement. Feedback from customerfacing staff is considered to be useful by more than a third of organisations (36%), and this figure has jumped by 9% since last year. The proportion of companies who say that online customer surveys are useful has decreased by 10% in the last year.

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5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

“Full engagement means changing our procurement, quality assurance and supplier selection; refining product information; designing model interfaces, fit for purpose... and then knitting these together across all customer touch points.” Ian Jindal, p31

Methodology and sample

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5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

Methodology and sample Methodology

Figure 1

This is our fifth annual Customer Engagement Report. Over 1,000 respondents took part in an online survey conducted over a five week period from October 2010.

Base – all respondents (1172)

Econsultancy and cScape promoted the survey via Twitter, LinkedIn, Email newsletters and other channels. The incentive for taking part was access to a complimentary copy of the report just before its publication on Econsultancy. cScape and Econsultancy would like to thank those who took the time to complete the questionnaire. If you have any questions about the research, please email Econsultancy’s Research Director, Linus Gregoriadis (Linus@ econsultancy.com).

Respondent profiles Just over half of survey respondents (52%) work for external agencies (including consultants and technology suppliers), while 38% work for in-house teams (i.e. client-side organisations). In total, 444 client-side respondents took part in the survey, compared to 611 agency participants. For the purposes of this report, we have carried out separate analysis for both these groups and the distinction is abbreviated to ‘companies’ (including not-for-profit organisations) and ‘agencies’.

Reta

Part of an in-house team (client-side) 38%

Fina

External agency / supplier / consultant 52%

Trav

15

Other 10%

Pub

Ente

Tele

10 20

Retail: 19%

Pub

Financial Services: 10%

15

Figure 2

Company respondents: What is your annual company turnover?

20

20%

20%

0

0 15

15 108%

10

5

< £1m

£1-10m

£10-50m £50-150m 0

Con

Hea

Telecoms / Mobile phones: 5%

Oth

Charity: 4%

5

21%

0

Publishing: 7%

Public Sector: 4%

20

25

Figure 2 shows the range in the size of participating, client-side organisations, as

5

Entertainment: 5%

31%

30

Cha

Travel: 8%

10

35

Annual company turnover

Clicktools was used for the survey.

All respondents: In which business sector is your organisation?

20

38% of respondents are client-side, while 52% are agency-side.

5

*

Figure 3

What type of organisation do you work for?

Consultancy / Marketing Services: 3% Retail: 19%

Healthcare: 3%

Financial Services: 10%

Other manufacturing: 3%

Travel: 8%

Pharmaceuticals: 3%

Publishing: 7%

Utilities / Energy: 2%

Entertainment: 5%

Gaming: 2%

Telecoms / Mobile phones: 5%

Automotive: 1%

Public Sector: 4%

FMCG / CPG: 0%

Charity: 4%

Property: 0%

Utili

Gam

Aut

FMC

Prop

Consultancy / Marketing Services: 3%

>150m

Healthcare: 3% Other manufacturing: 3% Pharmaceuticals: 3% Utilities / Energy: 2%

Pha

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5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

Figure 4

defined by annual company turnover. More than a third of respondents (41%) work for companies with annual revenues of £10 million or less. Almost two thirds of participating companies (59%) have an annual turnover of £10 million or more and approximately half of these (31%) work for organisations with revenues in excess of £150 million.

Business sector

What types of business have you focused on in the last 12 months?

Almost half of the companies surveyed (46%) are mainly B2C-focused.

Figure 5

Company: In which country are you (personally) based?

Mainly MainlyB2B: B2B:28% 28%

UK: 65%

Mainly MainlyB2C: B2C:46% 46%

Europe (outside UK): 10%

Both BothB2B B2B&&B2C: B2C:26% 26%

North America: 9% Other: 16%

Client-side respondents come from a wide range of sectors, with retail (19%), financial services (10%), travel (8%) and publishing (7%) being the best represented.

Business focus Almost half of the companies surveyed (46%) are mainly B2C-focused. Just over a quarter of companies (28%) have a mainly B2B focus, while 26% focus on B2B and B2C equally.

Geography Although the majority of client-side respondents (65%) in this survey are UK-based, this is very much a global survey as was the case for the previous four reports. Some 9% of companies are located in North America and 10% are based in mainland Europe. ‘Other’ countries or regions represented include Australia, Brazil, Germany, India and New Zealand. More than half of agency respondents (55%) are based in the UK, with a slightly higher proportion of respondents coming from North America (12%).

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Figure 6

Agency: In which country are you (personally) based? UK: 55% Europe (outside UK): 10% North America: 12% Other: 23%


5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

Findings

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5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

Findings Customer engagement strategy Importance of Customer Engagement Surprisingly, the proportion of client-side respondents who regard Customer Engagement as “essential” has decreased from 55% last year to 50% this year, the same level as for the first Customer Engagement survey carried out four years ago. Agency results are slightly different, as the proportion of supply-side respondents who

Recommendation of product, service or brand is still the type of behaviour that is most likely to have helped responding companies

Figure 7

Company: How important is Customer Engagement to your organisation?

80

Attributes of an engaged customer

40

40

Recommended service38% or brand: 38% Recommended product,product, service or brand:

Similarly to last year, we asked respondents which attributes of an engaged customer their organisations had benefited from most in the past 12 months.

35

35

HasHas provided feedback regularly: 33% provided feedback regularly: 33%

Recommendation of product, service or brand is still the type of behaviour that is most likely to have helped responding companies. However the proportion of companies who have seen benefits from this has decreased to 38%, down from 42% a year ago.

Just over a third of client-side participants (33%) say that, in the last 12 months, engaged customers have more awareness of product family. This was a new option in this year’s survey.

60 40 20 0

2011

2010

2008 Essential

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Figure 8

There has also been a decrease in the percentage of company respondents who say that they have reaped the advantage of engaged customers who are less reactive to a troubled economy (-8%) and who are less likely to switch suppliers (-6%).

100

2011 2010 2009 2008

regard Customer Engagement as “essential” for their clients has increased to 57%, up from 55% last year.

50% 55% 52% 50%

Important 36% 33% 35% 41%

Company: Which of the following attributes of an engaged customer has your organisation benefited from most in the past 12 months?

30 25

1% 2008 1%

50%

41%

8%

More awareness of the product family: 33%

More awareness of the product family: 33%

Has purchased regularly: 30%

Has purchased regularly: 30%

25

Participated in online communities or support groups: 30%

20

Converted more readily: 24% communities or support groups: 30% Participated in online

20

15

15

10 5

10 0

Less likely to switch supplier: 18%

Converted more readily: 24%

Participated in innovation and design: 17%

Less likely to switch supplier: 18%

Less focused on price: 14%

Participated in innovation and design: 17% More tolerant of mistakes: 11% LessLess reactive to troubled economy: 5% focused on price: 14%

More tolerant of mistakes: 11%

5

Less reactive to troubled economy: 5%

0

Figure 9

Agency: Which of the following attributes of an engaged customer do you feel your clients have benefited from most in the past 12 months? 60 50

60 50

1%

0

Recommended service52% or brand: 52% Recommended product,product, service or brand: HasHas provided feedback regularly: 24% provided feedback regularly: 24% More awareness of the product family: 28%

More awareness of the product family: 28%

40

40 The trends indicated by agency responses echo the client-side ones. However, in 30 2009 2008 contrast with companies, the proportion of agency respondents who say their clients Not Essentialhave experienced Importantengaged customers Nice-to-have important 20 Not Nice-to-have providing feedback regularly and converting important 2011 50% 36% 12% 2% more readily 12% 2% 2010 55% 33% has decreased 11%by 5% and 2%,1% 10 11% 1% respectively. 2009 52% 35% 11% 1% 11% 8%

30

Has purchased regularly: 28%

Has purchased regularly: 28%

Participated in online communities or support groups: 29%

30

Converted more readily: 31% communities or support groups: 29% Participated in online Less likely to switch supplier: 27%

Converted more readily: 31%

20

Participated in innovation and design: 14%

Less likely to switch supplier: 27%

Less focused on price: 20%

10 0

Participated in innovation and design: 14% More tolerant of mistakes: 10% LessLess reactive to troubled economy: 7% focused on price: 20%

More tolerant of mistakes: 10% Less reactive to troubled economy: 7%


COMMENT

Figure 10

Company: Attributes of an engaged customer – difference between 2011 and 2010 results 8 7 6 5 4 3 2 1 0 -1 -2 -3 -4 -5 -6 -7 -8

8 7 6 5 4 3 2 1 0 -1 -2 -3 -4 -5 -6 -7 -8

Recommended service-4%or brand: -4% Recommended product,product, service or brand: HasHas provided feedback regularly: 2% provided feedback regularly: 2% Has purchased regularly: 8%

Has purchased regularly: 8%

Participated in online communities or support groups: -5%

Participated in online communities or support groups: -5%

Converted more readily: 0%

LessConverted likely to switch supplier: -6% 0% more readily: Participated in innovation and design: -2%

Less likely to switch supplier: -6%

Less focused on price: -3%

Participated in innovation and design: -2%

More tolerant of mistakes: 2%

focused on price: -3% LessLess reactive to troubled economy: -8% More tolerant of mistakes: 2% Less reactive to troubled economy: -8%

There has been a decrease in Figure 11 the percentage Agency: Attributes of an engaged customer – difference between 2011 and 2010 results of company respondents who say that 4 4 Recommended service-1%or brand: -1% Recommended product,product, service or brand: they have reaped 3 HasHas provided feedback regularly: -5% 3 the advantage provided feedback regularly: -5% Has purchased regularly: 4% of engaged 2 Has purchased regularly: 4% 2 customers who are Participated in online communities or support groups: -3% 1 Participated in online communities or support groups: -3%reactive to a less Converted more readily: -2% 1 0 troubled economy LessConverted likely to switch supplier: -2% -2% more readily: (-8%). 0 -1 Participated in innovation and design: -3%

Less likely to switch supplier: -2%

-1 -2 -3 -4 -5

-2

Less focused on price: -3%

-3

More tolerant of mistakes: -1%

-4 -5

Dr Dave Chaffey

Participated in innovation and design: -3%

focused on price: -3% LessLess reactive to troubled economy: 0% More tolerant of mistakes: -1% Less reactive to troubled economy: 0%

Innovating through engaging The opportunities for feedback from customers have always been one of the most exciting aspects of engaging customers through digital channels for me. So the report section on adoption of technology for product development and innovation caught my eye.

Companies can put a challenge out to the community with an award to the solver who develops the best solution. Feedback through analytics or surveys about customers’ online experience, whether it’s website, mobile, email or social is always useful to improve the way we design experiences. But what interests me most are the opportunities for learning more about how we can improve our brand offering to customers by innovating core or value-added products or services. The classic example of this is the Dell Ideastorm approach where customers suggest product innovations and then other customers rate or comment on these. Smart! Particularly in the way they closed the loop to feedback

on the suggestions and explain that what they were doing based on suggestions. Another interesting innovator here is Innocentive.com which acts as an ideas intermediary. Companies can put a challenge out to the community with an award to the solver who develops the best solution. I think one of the main engagement opportunities in 2011 will be to make use of new tools that make it easy to get customer feedback, either in an open or closed environment, where ideas are initially limited to a large customer panel. Given my interest in this topic, I’ve been collecting a series of tools in different categories to help with this approach at http://bit.ly/smartfeedback. You can now setup an Ideastorm survey in minutes. The 5th Annual Customer Engagement Survey shows that social networks, enewsletters and user ratings and feedback are the three top methods for product development and innovation. This highlights that we don’t need complex methodologies to gain insights. I love the example of clothing e-retailer Howies who used their Facebook page to ask “What is the one thing we could do to improve your experience”. They got over 70 responses, some negative, many positive, but all useful. Fantastic! Dave is CEO of Smart Insights, a digital marketing blog, consultancy and soon-to-be software service to help companies get the most from their digital marketing. He is author of Emarketing Excellence and has also written several of the popular Econsultancy Best Practice Guides.

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COMMENT

Google is honing its algorithm to ensure that our search experience is as enriched as possible by our friends’ recommendations and real-life experiences Ron Shevlin

Customer Engagement: The confusion persists

Firms are still groping in the dark for what drives engagement and how to measure it

The concept of Customer Engagement has been a hot topic for a number of years now, and really gained traction (in the U.S., at least) when the Advertising Research Foundation defined engagement as: “Turning on a prospect to a brand idea enhanced by the surrounding context.” This utterly useless and meaningless definition has, thankfully, been improved upon over the past few years. But unfortunately, the 2011 Customer Engagement Survey from cScape proves that, while a definition of the term may have become more clear, marketers’ understanding of what it takes to drive engagement—and how to measure it—still lacks precision. It boggles the mind (mine, at least) that nearly two-thirds of the firms surveyed believe that their customer engagement strategy is “quite” or “very” successful. By what measure(s) have they come to this conclusion? Has customer retention, cross-sell, and profitability appreciably improved? It’s hard to believe that these measures have improved. When asked which attributes of an

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engaged customer their organisation benefited from most in the past 12 months, less than one-third of respondents mentioned “has purchased regularly.” Barely a quarter said that their engaged customers are converting more easily, and just 14% said their engaged customers are more tolerant of mistakes. Shouldn’t these attributes be seen by a wider range of firms whose engagement strategies are “quite” or “very” successful? Among 18 different tactics for generating engagement, only one—email newsletters— were mentioned by at least half of the survey respondents as having produced measurable improvement in customer engagement.

It boggles the mind (mine, at least) that nearly two-thirds of the firms surveyed believe that their customer engagement strategy is “quite” or “very” successful. The bottom line is that while we might be closer to agreeing to what engagement is, firms are still groping in the dark for what drives engagement, how to measure it. And worse, many firms are deluding themselves into thinking that their engagement strategies are on track, when, in reality, they’re throwing spaghetti on the Customer Engagement wall to see what sticks. Ron is a Senior Analyst at Aite Group where he specialises in financial services marketing. He is the author of Everything They’ve Told You About Marketing Is Wrong, published in March 2008.

Amanda Davie

Who do your customers trust more? As search and social collide, word of mouth becomes the new Google. The insight that stood out for me in this year’s Online Customer Engagement Report is centred on recommendation: 67% of client-side respondents cited that recommending a product (or service or brand) was the attribute of an engaged customer that has most benefited the organisation. Word of mouth is nothing new, of course. It has largely remained the most powerful tool in the communications – both brand and people-wise – box. However, a few years back a Henley Centre AOL report called Brand New World concluded that people trusted search engines (71%) over personal recommendation (67%), or indeed any other form of marketing. Now that’s quite a staggering, albeit substantiated claim. But it’s easy to believe when you think about your own personal relationship with Google. Only the other week, for example, I searched for an address on Google Maps, hopped on the tube and found myself at the entirely wrong location – all because I had trusted Google to lead me to my

destination. We rarely question ‘the Big G’! We trust that its cleverness will serve us the most relevant information at the right time. Just as we trust our best friends to give us the right advice and recommendations. So how does Google compete with word of mouth, user ratings, and other user-generated outlets such as Twitter and Facebook? The answer, of course, is social search. As we speak, Google is honing its algorithm to ensure that our search experience is as ‘social’ i.e. as influenced, and as enriched as possible by our friends’ recommendations and real-life experiences. This has implications for search marketers, who need to leverage social media fodder to please the algorithms, and for the digital marketing community as a whole. It heralds a return of focus back to people (people first, technology second). Getting people to say nice things about our brands, products and services is more important in this brave new digital world than it has ever been. Which is why combining search and social media strategies and tactics will be a key theme in the next twelve months. Useful links: Brand New World by The Henley Centre & AOL: • http://tinyurl.com/355jjqw Google demonstrates its social search features: • http://tinyurl.com/33757vl The Search community starts to test social media optimisation strategies • http://tinyurl.com/3xy6n48 Amanda is Founder and MD of Reform, a business consultancy that helps brands and businesses to connect with customers in the digital world.


5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

Just under three-quarters of client-side respondents consider that their customer engagement strategy is either “very successful” or “quite successful” Success of Customer Engagement strategy Encouragingly, just under three-quarters of client-side respondents (74%) consider that their customer engagement strategy is either “very successful” (9%) or “quite successful” (65%).

Figure 12

Company: How successful has your organisation’s Customer Engagement strategy (or initiatives) been in the past 12 months?

Moreover, the proportion of companies that have not been very successful in this respect has declined by 4%.

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Company: Success of Customer Engagement strategy – difference between 2011 and 2010 results

Very successful: 9%

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Survey respondents were asked what online Customer Engagement activities organisations typically outsource to third parties or agencies. While many companies carry out much of this work in-house, others outsource a range of related activities including email, web development and social media activity.

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Agency: How successful do you feel your clients’ Customer Engagement strategies (or initiatives) have been within the last 12 months?

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Agency: Success of Customer Engagement strategy – difference between 2011 and 2010 results

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5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

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Email newsletters: 72%

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Presence on social networks: 48% Microblogging: 46%

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User ratings and feedback: 46%

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Online customer service tools: 40%

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Blogging: 37%

Email newsletters, presence on social networks and micro-blogging have maintained their position 30 as the tactics most likely to result in improvement to companies’ online Customer Engagement. 20 Satisfaction with online Customer Engagement initiatives Companies were asked if there are any online customer engagement initiatives undertaken that they are not satisfied with or feel that could be developed further. The general consensus is that Customer Engagement could be improved on all levels. However, the lack of internal buy-in is preventing companies from allocating sufficient resources for this. This is sometimes because they are not able to measure results and justify further budget. Most respondents acknowledged that they are in the early days of building their presence on social networks and they need to invest more in social media to leverage its potential and increase customer engagement. Some companies are using a broadcast technique on social media channels with the main purpose of delivering informational messages instead of initiating conversations and eliciting responses. A conversational manner is needed to foster Customer Engagement and increase brand loyalty.

Tactics, behaviours and attitudes Tactics for improving Customer Engagement Email newsletters, presence on social networks and micro-blogging have maintained their position as the tactics most likely to result in improvement to companies’ online Customer Engagement. Just under three-quarters of client-side respondents

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User-generated content: 36% Video: 36% Focused micro-sites: 35% Facebook integration: 34%

(72%) indicate that email newsletters have resulted in a tangible, measurable improvement.

Figure 16

Email and social media often complement each other. Although social media has experienced tremendous growth, it is not about replacing email, but using these channels together to deliver higher returns.

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Email newsletters: Email newsletters: 72% 72%

Personalised messaging throughout the site: 20%

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Presence on social 48% Presence onnetworks: social networks: 48%

Content-sharing networks: 16%

Microblogging: 46%

Wikis: 9%

User ratings and feedback: 46%

Podcasts: 9%

Supply-side results are similar, but an even higher proportion of agencies believe that social networking, blogging and microblogging activities have resulted in a tangible, measurable improvement to their clients’ online customer engagement than companies themselves indicate. Almost two thirds of agencies (63%) indicate that presence on social networks has had a positive effect and just over half of supply-side respondents mention micro-blogging and blogging (52% and 53% respectively).

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Meanwhile, 41% of agencies say that mobile apps have had a measurable impact for their clients, compared to less than a quarter of responding companies (23%). Similarly, rich on-page interactive experiences are more likely to be cited by agencies (48%) than client-side respondents (29%). Significant numbers of company respondents say they have not been able to measure video (33%), microblogging (30%), presence on social networks (29%) and rich-on page interactive experiences (28%). Only 12% of organisations say they have not been able to measure location-based services and this is mainly because they are rarely used to drive customer engagement.

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On-site branded communities / forums: 33%

Company: Which of the following have resulted in a tangible, measurable improvement in 0 Rich on-page interactive experiences: 29% your organisation’s online Customer Engagement?

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Figure 17

Blogging: 37%

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Agency: Which of the following have resulted in a 0 your clients’ online Customer Engagement?

Facebook integration: 34%

Location-based services: 6% Email newsletters: 74% Presence on social networks: 63% Microblogging: 52% User ratings and feedback: 57% Online customer service tools: 50% Blogging: 53% User-generated content: 44%

Video: On-site branded communities / forums: 33%53%

Personalised messaging throughout the site: 20%

Focused micro-sites: 51% Rich on-page interactive Content-sharing networks: 16% experiences: 29% Facebook integration: 50% Wikis: 9% Mobile apps: 23% On-site branded communities / forums: 43% tangible, Podcasts: 9%measurable improvement to Personalised messaging throughout the 20%interactive experiences: 48% Richsite: on-page Location-based services: 6% Mobile apps: 41% Content-sharing networks: 16%

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Email newsletters: Email newsletters: 74% 74%

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On-site branded communities / forums: 43%

Personalised messaging throughout the site: 39%

Rich on-page interactive Content-sharing networks: 28% experiences: 48% Wikis: 12%

Mobile apps: 41%

Podcasts: 15%

Personalised messaging throughout the site: 39%


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Email newsletters: 15% Presence on social networks: 29%

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COMMENT

User ratings and feedback: 21% Online customer service tools: 20%

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User-generated content: 19% Video : 33%

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Figure 18

Company: Which of the following tactics 0 for driving Customer Engagement have you been Rich on-page interactive experiences: 28% unable to measure? 35 30

On-site branded communities / forums: 21%

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Podcasts: 17% Microblogging: 32% UserLocation-based ratings and feedback: 26% 12% services: User ratings and feedback: 26% Online customer service tools: 24% Microblogging: 32%

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Blogging: 26% Online customer service tools: 20% Email newsletters: 15% User-generated content: 19% Blogging: 26% Presence on social networks: 29% Video : 33% User-generated content: 19% Microblogging: 32% Focused micro-sites: 17% User ratings and feedback: 26% Videointergration: : 33% 26% Facebook Online customer service tools: 24% On-site brandedmicro-sites: communities / 17% forums: 21% Focused Blogging: 30% Rich on-page interactive experiences: 28% Facebook intergration: 26% User-generated content: 31% Mobile apps: 15% Video 21% : 26% On-site branded communities / forums: Personalised messaging throughout the site: 18% Focused micro-sites: 22% Rich on-page interactive experiences: 28% Content-sharing networks: 19% Facebook intergration: 27% Wikis:Mobile 12% apps: 15% On-site branded communities / forums: 25% Customer Podcasts: 17%Engagement have your clients been Personalised messaging throughoutRich theon-page site: 18% interactive experiences: 28% Location-based services: 12% Content-sharing networks: 19% Mobile apps: 20%

newsletters: 15% EmailEmail newsletters: 15%

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Blogging: 30%

Video : 26%

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Videointergration: : 26% 27% Facebook On-site brandedmicro-sites: communities / 22% forums: 25% Focused Rich on-page interactive experiences: 28%

Facebook intergration: 27%

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Adam Hibbert

On-site branded communities / forums: 25%

Personalised messaging throughout the site: 27%

Bring out the gimps So the proof is here: Business has really woken up to many of the possibilities of our new world, and is becoming increasingly sophisticated about how to carry itself. 32% of  companies are using internal or in-company social networking and there has been a near doubling in the use of internal microblogging utilities compared to last year. From the Employee Engagement perspective, I’m torn between excitement that senior leaders are beginning to get it, and impatience that while they’re successfully inviting the customer in for tea and scones, too many still have their employees locked in the basement. It’s getting on for five years since Robert Scoble and Shel Israel published Naked Conversations – and more than ten years since the Cluetrain Manifesto. Isn’t the market, like nature, meant to be red in tooth and claw? So why’s it taking us so long to clue up and bring out those gimps? The shine comes off a brand fairly quickly when customers encounter employees who are bored, mistrusted, perversely incentivised and (in all senses of the term) not engaging.

So the evidence is that it is happening, but piecemeal, not in the way big Customer Engagement programmes do, with presentations to the board and minutely documented proofs of ROI. They’ve mostly been born by useful conspiracies of people in the business taking a punt on what they can get away with.

The shine comes off a brand fairly quickly when customers encounter employees who are bored, mistrusted, perversely incentivised and (in all senses of the term) not engaging. In the last year I’ve also begun to see more guerrilla solutions popping up, where a few employees just create their own spaces on, say, Yammer, and get on with peer-topeer collaboration spontaneously – freed of organisational drag, but also poorly coordinated and barely accountable. In the short term, this self-empowerment is entirely healthy for corporate culture and for Customer Engagement. But it’s a real risk for leaderships battling to align organisations around one clear game plan. 2011 will be a decisive year for helping leaders catch up, before their followers get too far ahead. Adam is Group Communications Manager at Aviva plc, whose unlimited intranet forums have been significantly helping the insurer’s employees bring its customer intimacy value discipline to life since 2008.

Rich on-page interactive experiences: 28% Content-sharing networks: 31% Wikis:Mobile 26% apps: 20% Podcasts: 26%

Personalised messaging throughout the site: 27%

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COMMENT

Our collective experience of wired businesses is still fragmented and unsatisfactory much of the time COMMENT

with us more than ever before. The latest generation of mobile phones offers the ability to engage with customers in a far richer way than ever before.

Rob Killick

Is creating a simple experience for the customer in the face of constantly developing hardware, software and the multiplexity of channels coming our way just pie in the sky? This is the challenge that all those who work in our industry face. We should remember that keeping it simple makes our lives easier and that it is also what our clients want most.

Delivering simplicity is a complicated business ‘The desire for simplicity’ is considered to be the most important customer attitude in the next 12 months by both clients and agencies. The need for a series of zen moments in our experience of engaging with businesses online is highly desirable, like slipping a fast car into fourth gear and feeling that all the parts are working smoothly together. Unfortunately our collective experience of wired businesses is still fragmented and unsatisfactory much of the time. This is reflected in the report’s finding that most businesses have yet to develop a single view of their clients. The widespread adoption of social media as a marketing tool adds further layers of complexity to the customer experience, something that has moved on tremendously in the past year. Can we move further towards simplicity in the year ahead? The big area that needs a great deal of work is the full integration of mobile into the business world. Mobile marketing is identified in this year’s report as a coming priority for most businesses, yet to be fully adopted. The opportunity to do this is now

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Rob is CEO of cScape. He is author of the blog UK After The Recession which deals with how the UK can develop a dynamic economy once again. http://postrecession.wordpress.com

Lucy Conlan My question to modern marketers is do you know who the influencers are on your database?

Do you know who I am? Well you should. Digital media is increasingly moving the balance of power and control away from organisations and increasingly more towards individuals. Knowledge of your customers has never been more important. On a recent trip to Glasgow with my mother, the hotel I chose was also the residence of some heavy metallers attending a festival. At 3am on the Saturday night, our corridor could have been a scene in Spinal Tap with revellers

partying from room to room. The experience was vexing but the staff dealt with it very well.

Know your influential customers and keep them happy.

I had booked the hotel via a well-known holiday portal that I had posted reviews on from other trips. In the survey recommendations and feedback (combined 71%) are the attributes that companies rated most highly as an indicator of an engaged company but are they measuring the hidden value of what a truly engaged customer might be holding back on sometimes. When asked to review this hotel, for the first time, the experience had not been too positive and I realised my personal power to influence other consumers but on this occasion it felt unfair to pen a negative review.

Lucy is a digital marketing consultant and member of cScape’s Customer Engagement Unit. Lucy’s direct marketing background was gained in the charity and cultural sector, having worked at the Barbican, English Heritage, British Red Cross and the Natural History Museum.

What did strike me, however, was that with digital media we can all exert power but, of course, some of us have more power than others. A negative review from me could have lost the hotel a few bookings over a couple of months. A disparaging comment from a much followed Twitterer or an adored blogger can have devastating as well as elevating affects on business. Please Style Blogger Susie Lau and your sales of cashmere wrap skirts with matching bras could skyrocket. Disappoint Brett Snyder (crankyflier.com) and your airline could have a dent on its profit margins. My question to modern marketers is do you know who the influencers are on your database? Are you seeking to recruit industry influencers? Traditional customer scoring methods of recency, frequency and value need to have an influence score as well.

Jerry Michalski

Equalising the power differential Companies are making their way to new forms of organisation, spurred by the new capabilities of the Internet and mobile phones. But change is coming so quickly and new platforms are emerging in such bewildering variety that the most reliable path may well be to stick to mastering tried-and-true methods such as email newsletters and web traffic analysis, while dipping a toe in the waters of social networking systems, application development and mobile marketing. In another five years, the marketing and customer service functions of the year 2000 will be unrecognisable. Service is moving from being the outsourced cost-centre that companies hate to feed, to being the front line


COMMENT

of customer contact – possibly the best way to build authentic relationships. Advertising is experiencing a mixture of forces. On one hand, the variety of platforms and touch points, combined with analytic capabilities, promise “rifleshot” precision in ad targeting. On the other hand, ads are losing their impact and interest. They’re not authentic ways of communicating, even though they still work. So companies are spending most of their resources on email and web analytics, methods that aren’t hugely adventurous but that work reliably and are comprehensible. Close behind is investment in social networking services and user-generated media, but one senses the results are hit-or-miss: a few companies get something right and benefit greatly, while others putter along and keep trying to figure out the right formula. In the end, companies will probably acquire a new shape. Marketing will gain a deeper understanding of true relationship building and will become a cross-company service function, like human resources. It will no longer have the monopoly on intentional customer contact. Customer service will work much more closely with marketing and design, and will have a seat at the table as strategic decisions get made. These are good changes, because they will equalise the power differential between companies and “consumers,” making them more equal and more connected – and thus also more loyal and profitable, on all sides. Jerry is founder of the Relationship Economy eXpedition

of companies are now using social networks as a customer service channel. This is an extraordinary statistic.

Linus Gregoriadis

Is Customer Engagement the new advertising? It’s now almost five years since Econsultancy and cScape embarked on the first Customer Engagement Report. So much has happened in that time, and most of the major developments have reinforced the importance of Customer Engagement as an essential part of a sustainable business strategy. What are those major developments? Well, most obviously the social media revolution has forced companies to think about how they engage with customers beyond the context of their own websites and the touch points they control. While the impact of social media has to some extent been overhyped, what is clear is that this phenomenon has galvanised many businesses into thinking about their engagement with customers beyond the context of sales and marketing. Forward-thinking companies are increasingly using social media for customer support, or as a way of crowdsourcing new ideas and innovating. According to this research, half

Forward-thinking companies are increasingly using social media for customer support, or as a way of crowdsourcing new ideas and innovating.

The “social enterprise”, now an important element of this annual study, is a concept which more companies are starting to embrace because they realise that they need to have the right culture, processes and technology in place internally, if they are to stand a chance of engaging effectively with customers in the outside world. Some would argue that Customer Engagement almost supersedes advertising, because of the halo effect and goodwill towards brands that get this right in a world seemingly ruled by social media-fuelled word of mouth. Advertising isn’t going to disappear but certainly more companies are looking at the balance of their budgets, and whether they are actually delivering on the promises they make with brand advertising. Another area which is so much more pertinent than it was half a decade ago is mobile marketing. Since last year, this topic has had its own section in this report. And with good reason. In the blink of an eye, engagement through mobile has suddenly gone from being a nice-to-have to something which customers are expecting. Not surprisingly, the majority of company respondents (73%) are planning to invest in the mobile channel in 2011. Types of investment include the creation of mobile applications and location-based marketing. Many companies are now selling through the mobile channel. It’s no longer just about sending a timely

text message or making sure a website is WAP-enabled. Of course, Customer Engagement isn’t all just about mobile marketing and social media. The report also takes a look at some of the tactics and methods used to engender online engagement. As well as more time time-honoured tools such as email, there is increasingly a place for innovative techniques transplanted from areas such as social networks and gaming. Linus is Research Director at Econsultancy where he oversees much of its award-winning content.

Jordan Gross

The secret life of data Data needs somewhere to snuggle up to. One clear trend coming out of this year’s survey is the keenness for more mobile applications (shocker #1) and more social media integration (shocker #2). Therefore it seems apt to remind everyone that all these wonderful Internet resident apps, objects, websites and databases need to reside somewhere. It’s a little like that scene in Enemy of the State where you dive down into the data path between the “eye in the sky” and

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COMMENT

the server with the whirring tape drive in the basement. Data has to live somewhere. So where does data live these days? Despite the glossy finish that many new fangled “cloud” providers are putting on things, most data ultimately resides on white box servers, one stacked on top of another. Buying a “cloud” service is no guarantee of reliability, performance or redundancy; in fact, it’s normally an excuse to be extraordinarily opaque about your infrastructure. It’s fascinating really, particularly in the context of the obsession of the last ten years of people wanting more and more information out of their service providers (How much capacity does your network have, what specification are your servers etc).

Take the time to look beyond the sales person and meet the people who are actually going to deliver your solution. So just when your starting to consider your shiny new iPhone application and where in the rolling green hills you might host it [to ensure uptime, speed and reliability], I want you to take a deep soothing breath. Cloud is normally just based on the same hardware and software as the industry has based Share, VPS and Managed Hosting on for a number of years. Many Cloud services are actually just a slightly tweaked VPS solution, which has been re-badged. The questions you should be asking should still be the same as you always did, don’t accept

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companies that are deliberately opaque. Also remember that what you need to think about when looking for hosting for anything, is the service you get; with correct attention given to the story behind the hosting company you select and the technology they deploy to deliver your solution. Practically speaking, there are a few things to consider: You want someone who can deliver really good technical support 24 hours a day, 7 days a week, not just a security guard on the end of a phone; test your prospective provider out with a well placed call at 2am and see how they respond. You should also be looking at Service Levels, ie you want a contractual binding service commitment with penalties and a break clause [in case things go badly wrong]. Oh and one more thing, who are the people you’re dealing with? Do they fill you with confidence? Take the time to look beyond the sales person and meet the people who are actually going to deliver your solution after you sign on the dotted line. So in summary, be sure to peel back the label and understand whatever hosting solution catches your eye. You don’t want to end up with your data on the 1970’s whirring tape machine in the underground bunker. Jordan Gross is the CEO and founder at Ultraspeed. Since its establishment in 1998, Ultraspeed has grown to become a leading UK Managed Hosting company, and continues to push the envelope in both technology and service.

Investment to drive increased Customer Engagement

Buying a “cloud” service is no guarantee of reliability, performance or redundancy; in fact, it’s normally an excuse to be extraordinarily opaque about your infrastructure.

Significant numbers of companies will continue to invest in email, video, social media and a range of other tactics to drive online Customer Engagement over the next 12 months. More than half of client-side respondents indicate that they will increase investment in their email newsletters (62%), presence on social networks (58%) and video (52%). It is noteworthy that difficulty measuring video activities and presence on social networks is not hindering many companies from increasing their investment in these areas. Although slightly fewer companies than last year are anticipating increased investment in social networking, there is strong evidence that companies will continue to invest in social media marketing and email newsletter activity simultaneously. Significantly more companies than last year say they plan to increase investment in user-generated content (+13%), rich on-page interactive experiences (+8%) and on-site branded communities/forums (+9%). Companies have come to realise that allowing customers to create relevant content around their products enhances customer interaction with their brand as well as generating SEO-friendly content at no cost. There will be less emphasis on focused micro-sites and blogging, probably because organisations believe that investment in other tactics can deliver higher returns.

Compared to last year, fewer companies anticipate increased investment in their social network presence. Some companies have experimented in this area, but abandoned their efforts because it hasn’t worked for them. However, as we shall see later in the report, there has been an increase in the use of social networks specifically for customer service support.

Innovative techniques for fostering Customer Engagement More established approaches to Customer Engagement can be complemented with more innovative techniques, such as the use of customer leader boards or “digital body language” (explained below). Figure 22 shows some of the new techniques that some responding companies have trialled to foster engagement. The uptake of these techniques is still limited, but is likely to accelerate in the next few months. Just under a fifth of company respondents (18%) have used time-limited activities, which create a sense of urgency and encourage customers to act promptly. Use of rewards, points or badges for online behaviour is the second most widely adopted technique, with 16% of client-side participants having trialled it. On the agency side, more than a third of agencies (36%) say that their clients have tried this technique. Although rewards and points programmes are typically part of a broader strategy, they can sometimes initiate and support customer engagement by adding value to the brand and increasing the proportion of repeat customers


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Email newsletters: 62%

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Onlineof customer service tools: 45% Use rewards, points or badges for online behaviour is the second Blogging: 44% most widely adopted innovative technique

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Mobile apps: 42%

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Figure 20

5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

Figure 22

Rich on-page interactive experiences: 39%

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On-site branded communities / forums: 36% Company: In which of the following areas do you anticipate investment to increase online Company: Has your organisation trialled any new or innovative techniques for fostering Personalised messaging throughout theengagement? site: 34% Customer Engagement over the next 12 months?

Many companies have raised their game, recognising that provision of an excellent customer experience has never been a better way of marketing a business.

Focused micro-sites: 32%

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newsletters: EmailEmail newsletters: 62%

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Presence on social 58% Presence onnetworks: social networks:

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Social exchange techniques: 14%

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Playful interfaces: 10%

UserUser-generated ratings and feedback: 46% content:

48%

10

Microblogging: 46%

User ratings and feedback: 46%

Online Mobile apps: customer 42%

Digital body language (automated sense and respond): 2%

Levels of access (based on engagement): 5%

10

Online customer service tools: 45%

Microblogging: 46%

5

Digital body language (automated sense and respond): 2%

service tools: 45%

5

Rich Blogging: on-page interactive 44% experiences: 39%

0

On-site branded communities / forums: 36%

Mobile apps: 42%

10

Personalised messaging throughout the site: 34%

Rich on-page interactive experiences: 39%

Focused micro-sites: 32%

0

On-site branded Content-sharing networks:communities 23%

Figure 21

/ forums: 36%

Podcasts: 12%

Personalised messaging throughout the site: 34%

Company: Investment to drive Customer Engagement – difference 2011 and 2010 Location-based services: between 11% Focused micro-sites: 32% results Wikis: 8%

Content-sharing networks: 23% Email newsletters: 4%

15 15

9 6

3

Presence on social networks: -3% Location-based services: 11% User-generated content: 13% User-generated content: 13% Wikis: 8% User User ratingsratings and feedback: 3% and feedback: 3%

35

35

Reward / points// points badges for online behaviour: 36%behaviour: 36% Reward / badges for online

Blogging: 1%

25

30

Rich on-page interactive experiences: 8%

On-sitemessaging brandedthroughout communities Personalised the site:/ forums: 6%

-3

Focused micro-sites: 3%

9%

throughout the site: 6%

30

Social exchange techniques: 25%

Social exchange techniques: 25%

Playful interfaces: 23%

Playful interfaces: 23%

25

Leader boards or ‘top customer’ charts: 12%

20

or engagement): ‘top customer’ LevelsLeader of accessboards (based on 19% charts: 12%

20

15

DigitalLevels body language (automated and respond): 7%19% of access (basedsense on engagement):

15

10

Rich on-page interactive experiences: 8%

Focused micro-sites: 3% Personalised messaging

0

Agencies: Have your clients trialled any new or innovative techniques for fostering engagement? Time-limited 21% Time-limited activities:activities: 21%

On-site branded communities / forums: 9%

3

Figure 23

40

Presence on social networks: -3%

12

0

40

EmailPodcasts: newsletters:12% 4%

Blogging: 1%

-3

15

LevelsLeader of access (based on 5% charts: 6% boards or engagement): ‘top customer’

10

0

15

Leader boards or ‘top customer’ charts: 6%

Blogging: 44%

6

Time-limited 18% Time-limited activities:activities: 18% Reward / points// points badges for online behaviour: 16%behaviour: 16% Reward / badges for online

Facebook integration: 49%

20

9

20

User-generated content: 48%

30

12

20

Podcasts: 12% 58% Location-based services: 11%

30

0

Content-sharing networks: 23%

Video : 52%

40

20

62%

Digital body language (automated sense and respond): 7%

5

10 0

5 0

21


5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

in the overall client base. A variable ratio and interval of reward – surprising customers at random intervals with small rewards – can strengthen relationships and drive customer loyalty.

stronger relationship with the brand. This seems to be a more popular technique for agency clients – almost one fifth of agency respondents (19%) mention it compared to only 5% of company respondents.

According to social exchange theory, individuals feel the need to reciprocate the support of the other party as they interact over time. Companies can greatly benefit from social exchange techniques as they deepen relationships with consumers and engender customer loyalty. Such techniques have been trialled by one quarter of agency clients and 14% of company respondents.

The use of digital clues that customers leave about their consumption patterns, intents and interests (digital body language) is one of the areas that has not been properly tapped until now, as evident from both the client and agency side responses.

Playful interfaces have been used by 10% of companies and just under a quarter of agency clients (23%). Also known as “Ludic” interfaces, they make use of a number of key features from interactive media and computer games, leading to playful, engaging interactions. These stimulate the senses, inspire curiosity and create a sophisticated form of loyalty. Customers no longer use products or services because they have to, but because they want to. Large prizes or discounts are not always required to drive continuous customer engagement. Although competitive leader boards or top customer charts can provide an enhanced status in the community and boost usage of a certain product or service, they have been trialled by only 6% of participating companies. Having different levels of access, based on the level of participation, can spur customers’ curiosity and incite them to develop a

22

Overall, the use of new or innovative techniques to foster engagement has been more widely encountered by agencies than by company respondents. Encouragingly, this provides evidence that agencies are increasingly advising clients to engage customers in more innovative ways, either to complement or replace more established methods and techniques. However, there is ample room for increased adoption by companies.

Experiences with innovative techniques for fostering Customer Engagement Respondents were asked if they had had any significant success or notable experiences with any of these techniques. Both company and agency respondents say that rewards/ points for online behaviour and time-limited activities have proved to be the most successful techniques for fostering Customer Engagement. Some of the benefits they mention include improvement in customer retention and conversion, increase in data capture, traffic and participation.

“Loyalty-based rewards/points have seen customer retention improve by 16% in first year.” “Success with our rewards scheme has seen an increase in the purchases from our loyal customer base.” “Time-based activities have been strong for us, mostly because they tie our products (music and artists) to a more ‘live’ experience.” “Rewards system has proved to be just the thing we need. But I have to mention that although it has proved a success it does present some negative effect. People expect too many freebies.” “Rewards/badges for online behaviour increased drastically their customer engagement.” “Time-limited activities and ‘live events’ work really well with some brands. Ultimately any technique works well if it’s the right one for the audience and is part of a well thought through integrated communications programme.” “Time-limited activities like Facebook competitions involving video have proved a huge success for one client.” What company respondents said when asked what were their most successful innovative techniques for fostering Customer Engagement.


5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

Changing behaviour and attitudes Desire for simplicity is the type of attitude that companies are most likely to expect to be prevalent over the next 12 months, and is mentioned by more than half (54%) of responding companies. Customers now expect services and processes to be streamlined, because they are more likely to have experienced companies getting this right. Desire for more real-time interaction, focus on quality and intolerance of poor customer service also rank highly, with 42% of respondents expecting each of these types of attitude to be significant through 2011. A dynamic Customer Engagement model needs to take into account the rising demand for real-time interaction and enhanced dialogue. The technology is available to make this a reality. Intolerance of poor customer service is attributable to the instant access to real-time information about brands and customer experiences. It is much easier now for customers to switch service providers or to seek out other brands offering similar products.60 Almost one third of client-side respondents 50 (32%) say that focus on price will be significant, compared to only one fifth of 40 agencies. 30

A dynamic Customer Engagement model needs to take into account the rising demand for real-time interaction and enhanced dialogue. The technology is available to make this a reality. Figure 24

Company: Which of the following types of customer attitude do you think will be most significant in the next 12 months?

Agencies: Which of the following types of customer attitude do you think will be most significant in the next 12 months?

Desire80 for simplicity: 54%

Desire for simplicity: 61%

Desire70 for more real-time interaction: 42%

Desire for more real-time interaction: 45%

Focus on quality: 42% 60 Intolerance of poor customer service: 42%

Focus on quality: 36%

Focus50 on price: 32%

Focus on price: 20%

30

Desire40 to connect socially: 30%

Desire to connect socially: 40% customer serviceand trust: 25% Concern about privacy

20

Concern about privacy and trust: 22% 30 Desire for playfulness: 4%

60 50 40

20 10

10

0

Intolerance of poor customer service: 38%

Intolerance of poor is attributable

Desiretofor playfulness: the instant 7%

access to real-time information about brands and customer experiences.

0 Desire for simplicity: 54%

80

Desire for simplicity: 61%

Desire for more real-time interaction: 42% 70

Desire for more real-time interaction: 45%

Focus on quality: 42%

Focus on quality: 36%

Intolerance of poor customer service: 42%

60

Intolerance of poor customer service: 38%

Focus on price: 32%

50

Focus on price: 20%

Desire to connect socially: 30%

40

Desire to connect socially: 40%

Concern about privacy and trust: 22%

20

Figure 25

Desire for playfulness: 4%

30

Concern about privacy and trust: 25% Desire for playfulness: 7%

20 10 0

10 0

23


5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

Sharing insights internally can enable cross-functional collaboration and spur innovation Figure 26

The social enterprise Adoption of technology for product development and innovation Companies are using a wide range of features, channels and technologies for product development and innovation. Compared to last year, social networks (43%) and video sharing (23%) are used by a significantly higher proportion of companies specifically for evolving products and innovating. Similarly, more companies are using mobile communications and SMS service alerts to feed into development. There has been a slight increase (+3%) since last year, but many organisations are still failing to tap into user-generated comments, with only just over a quarter of respondents (27%) saying they have adopted user ratings and feedback for product development and innovation. Sharing insights internally can enable cross-functional collaboration and spur 50 innovation. However, a very small proportion of responding organisations use in-company 40 social networking (12%), social knowledge sharing (10%) and intranets (10%). 30

Adoption of technology for internal (employee) communications 20

Although intranets are rarely used for product development and innovation, 10 almost one half of client-side organisations (45%) are using them for internal communications. 0

24

Figure 27

Company: Has your organisation adopted any of the following for product development and innovation?

Company: Adoption of technology for product development and innovation â&#x20AC;&#x201C; difference between 2011 and 2010 results

8 Social networks: 43%

50

7 Compared to last year, social networks (43%) and video sharing (23%) are used by a significantly higher proportion of companies for evolving products and innovating

6

40

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50

30

Social networks: 43% Email newsletters: 38%

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30

User ratings and feedback: 27% Video sharing: 23%

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0

Email newsletters: 38% User ratings and feedback: 27% Video sharing: 23%

Mobile communications: 15%

1

Content tagging: 14%

0

Employee blogging: 14%

-1

Internal or in-company social networking: 12%

-2

Discussion forums: 16%

7

Podcasts: 8%

4 3

On-site branded communities / forums: 15% 2 Mobile communications: 15%

1

Content tagging: 14%

0

Employee blogging: 14%

-1

4 2

Intranet: 10%

5

5

On-site branded communities / forums: 15%

8 6

6

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Social knowledge sharing: 10% Social networks: 43%

7

Discussion forums: 16%

SMS service alerts: 11%

0

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Instant messaging: 6% Internal microblogging utilities: 4%

-3 -4

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So

Email newsletters: 38%

Em

User ratings and feedback: 27%

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Video sharing: 23%

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Discussion forums: 16%

Social networks: 7% Email newsletters: 3%

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2 On-site branded communities / forums: 15% User ratings and feedback: 3%

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1 Mobile communications: 15%

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0 Content tagging: 14% -1 Employee blogging: 14% -2 -3 -4

Video sharing: 7% Discussion forums: -1% On-site branded communities / forums: 2% Mobile communications: 4% Content tagging: -2%

Internal or in-company social networking:Employee 12%blogging: -4% SMS service alerts: 11%

Internal or in-company social networking: -2% SMS service alerts: 4%

Social knowledge sharing: 10%

Social knowledge sharing: 3%

Email newsletters: Intranet: 10% 3%

Podcasts: -4%

Social networks: 7%

User ratings and feedback: 3%

Podcasts: 8% Video sharing: 7%

Intranet: 0%

Instant messaging: 0% Internal microblogging utilities: -1%

Co

Em

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So

In

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Discussion forums: -1% Instant messaging: 6%

In

Mobilemicroblogging communications: 4% utilities: 4% Internal

In

On-site branded communities / forums: 2%

Content tagging: -2% Employee blogging: -4%

-2 Internal or in-company social networking: 12% -3 SMS service alerts: 11% -4 Social knowledge sharing: 10%

Internal or in-company social networking: -2%

Intranet: 10%

Intranet: 0%

Podcasts: 8%

Podcasts: -4%

Instant messaging: 6%

Instant messaging: 0%

SMS service alerts: 4% Social knowledge sharing: 3%


COMMENT

Figure 28

Company: Has your organisation adopted any of the following for internal communications?

Figure 29

50

Social networks: 11% Email newsletters: 31%

50

40

User ratings and feedback: 8% 7.0

30

6.0 Video sharing: 11% 5.0 Discussion forums: 12% Social networks: -1% 4.0 Email newsletters: -1% On-site branded communities / forums: 10% 1.5 User ratings and feedback: -1%

40

30

20

Social networks: 11%

8

Email newsletters: 31%

7

User ratings and feedback: 8%

6

Video sharing: 11%

5

Discussion forums: 12% On-site branded communities / forums: 10% Mobile communications: 8%

20

10

Content tagging: 7% Employee blogging: 20%

10

Internal or in-company social networking: 32%

0

Richard Sedley

Company: Adoption of technology for internal communications – difference between 2011 and 2010

SMS service alerts: 5%

0

Social knowledge sharing: 16% Social networks: 11%

8

Intranet: 45%

Email newsletters: 31%

7

Podcasts: 4%

User ratings and feedback: 8%

6

Instant messaging: 24%

Video sharing: 11%

5

Internal microblogging utilities: 16%

Discussion forums: 12% On-site branded communities / forums: 10% Mobile communications: 8% Content tagging: 7% Employee blogging: 20% Internal or in-company social networking: 32% SMS service alerts: 5% Social knowledge sharing: 16%

4 3 2 1 0 -1 -2 -3

1.0 Mobile communications: 8% 0.5 3 Content tagging: 7% 2 0.0 Employee blogging: 20% 1-1.0 4

Video sharing: 2% Discussion forums: -3% On-site branded communities / forums: 3% Mobile communications: 2% Content tagging: -3%

0

-2.0 Internal or in-company social networking:Employee 32% blogging: 4% -1 Internal or in-company social networking: 0% -3.0 -2 SMS service alerts: 5% SMS service alerts: 1% -3-4.0 Social knowledge sharing: -1% Social knowledge sharing: 16% Social networks: -1%

newsletters: -1% Intranet:Email 45% User ratings and feedback: -1%

Podcasts: 4% Video sharing: 2%

Discussion forums: -3%

Instant messaging: 24%

On-site branded communities / forums: 3%

communications: 2% InternalMobile microblogging utilities: 16% Content tagging: -3% Employee blogging: 4% Internal or in-company social networking: 0% SMS service alerts: 1% Social knowledge sharing: -1%

Intranet: 45%

Intranet: 2%

Podcasts: 4%

Podcasts: -2%

Instant messaging: 24%

Instant messaging: 4%

Intranet: 2%

Podcasts: -2% Instant messaging: 4% Internal microblogging utilities: 7%

Social networks: 1% Although intranets are Email -3%imperfection of The rarely used newsletters: for product User ratings and Customer feedback: 0%Engagement development and innovation, “I don’t understand it Richard. I spend hours Video sharing: 3% almost one half writing this stuff and I know lots of people of client-side are -3% reading it. But no one seems to want to Discussion forums: organisations comment on my blog posts.” (45%) are On-site branded communities / forums: 0% using them What was our senior exec. blogger’s problem? for internal He was just3% too damn perfect. My client was Mobile communications: communications carefully crafting his copy, working through his and presenting such a complete and Content tagging:arguments 1% well-rounded case for his opinions that no one

felt confident Employee blogging: 0% enough to engage with him in debate or add their thoughts.

Internal or in-company social networking: 2%

Engagement requires more than providing a feedback form a Facebook ‘Like’ button. Social knowledgeorsharing: 0% SMS service alerts: 2%

Intranet: -2%

The role of errors, mistakes and incompleteness in Customer Engagement Podcasts: -2% is often underestimated. Many of the 42% of survey participants who recognised the Instant messaging: 1% significance of customer service will already know that a problem solved is often more Internal microblogging utilities: 7% powerful in driving customer satisfaction than initial perfection. Indeed I know of one major Telecoms Company that instigated rolling network ‘downtimes’ in order to be seen fixing

25


COMMENT

Did you know that one of the best indicators of engagement in an online customer community is that a customer has completed their community profile page? them quickly. Intentional service disruption like this is a risky approach and I certainly don’t recommend it, but I do think that there is a role for lack of perfection in some well-chosen customer interactions. For example, did you know that one of the best indicators of engagement in an online customer community is that a customer has completed their community profile page? To encourage people to provide information on their interests we have experimented with pre-populating text like ‘I’m a supporter of Chelsea Football Club’, or ‘Model railways have always been a passion of mine’. And you know what? More people provide their details when you offer them this incorrect information than when the form has no default text. After all who can resist correcting someone when you know they have made a mistake? Cultivating Customer Engagement requires more than providing a feedback form, a Facebook ‘like’ button or even a customer community to join. It means triggering our audience’s imagination, encouraging their ideas and tickling them enough for them to want to scratch or laugh. Like my C-suite blogger we could all learn that a little imperfection provides us with the opportunity to engage with our audience. He’s now spending less time crafting his blog posts and more time engaging with the people who read his shorter and more open thought pieces – he’s also enjoying it more. Richard is Commercial Director at Foviance and Course Director for Social Media at the Chartered Institute of Marketing.

26

more on email (proven Value For Money) than agencies hope; it’s boring.

Jim Sterne

Companies finally declare web analytics as most valuable Ahhh surveys – The opinions of a selected few, crunched down into numerical certainties assumed to be applicable across the board. Perfect? Hardly. Useful? Enormously. The validity of this survey is found in the correspondence between client and agency answers. Agencies are always more positive than clients about results and future spending, but these answers are consistently more positive indicating that there’s a sufficiently significant sample size to trust these results.

The validity of this survey is found in the correspondence between client and agency answers. There are some differences between the two which are understandable. For example, agencies are hoping their clients will spend more on mobile apps and location based marketing than clients are planning; it’s fun to work on new stuff. Clients want to spend

People are shy about trialling new or innovative techniques for fostering engagement.

The other difference is that agencies, who often see more of the client’s organisation than the clients do, are much quicker to tick the box that says clients don’t even know how many touch-points they have. For the rest, they pretty much agree and from the perspective of the guy who wants everybody to measure their marketing, the results are good. Which marketing method resulted in tangible improvements in online Customer Engagement? Email! Not only is it the most valuable, it’s the most measurable. Of course, we have some correlation/causation overlap here. If you can measure it then you can optimise it. If you can’t measure it, you don’t know if it’s working. The more measurement the better! The best news from my point of view is that we seem to have finally broken the barrier on web analytics. After spending the last 15 years pounding the podium, jumping up and down and waving the flag for web metrics (see my books and conferences), more than half of companies have found web analytics to be the most useful method of gathering customer intelligence for engaging customers online. My aspirations are being fulfilled. Other take-aways of value to everybody include the clues that we are still in a moribund economy. People are shy about trialling new or innovative techniques for

fostering engagement. There isn’t a lot of experimentation going on when times are thin. Expect those numbers to change over the next 18 months.

After spending the last 15 years pounding the podium, jumping up and down and waving the flag for web metrics, more than half of companies have found web analytics to be the most useful method of gathering customer intelligence for engaging customers online. One final item I hope everybody notes; the public’s perceived desire for simplicity, real-time interaction and great customer service are the watchwords of commercial success in those 18 months and beyond. Less choice, more timely information and quick sincere responses to your customers will win the day. And, as always… Here comes mobile! Jim is focused on measuring the value of the online marketing for creating and strengthening customer relationships. He has written eight books on Internet marketing, produces the eMetrics Marketing Optimization Summit and is co-founder of the Web Analytics Association.


5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

Use of internal micro-blogging utilities (+7%), employee blogging (+4%) and instant messaging (also +4%) has slightly increased in the last year. However, use of different communication tools by companies is still limited, with many companies failing to take full advantage of the technology available.

Adoption of technology for customer service improvement Notably, more than half of the companies surveyed (51%) are now using social networks as a way of improving customer support. But apart from adoption of social networks (up by 15% in the last year) and email newsletters (50%), use of different tools to improve customer support is limited. Mobile technologies are being used by a slightly higher proportion of responding companies than was the case last year. Mobile communications and SMS service alerts have been adopted by 6% more organisations. 60

Planned investment for customer service 50 improvement The benefits of using social media 40 for customer service are becoming more and more apparent as companies are increasingly 30 using it to handle complaints and provide real-time information to their customers. 20 More than half of companies (54%) are planning to invest in social media as 10 a customer service channel. More than two thirds of agency respondents (69%)0say their clients are investing in this.

Figure 30

Figure 31

60

15Social networks: 51%

Socia

Email newsletters: 50% 12 User ratings and feedback: 28%

Emai

50

Company: Has your organisation adopted any of the following for customer support improvement? More than half of the companies surveyed (51%) are now using social networks as a way of improving customer support

Company: Adoption of technology for customer support improvement â&#x20AC;&#x201C; difference between 2011 and 2010 results

40

60

Social networks: 51%

30

Email newsletters: 50%

50 40

Video sharing: 22%

20

Discussion forums: 17%

9 6

On-site branded communities / forums: 18% Mobile communications: 16%

10

Content tagging: 12% Employee blogging: 15%

10

Internal or in-company social networking: 7%

0 0

12

User ratings and feedback: 28%

30 20

15

SMS service alerts: 18% Social networks: 51% Email newsletters: 50%

15 12

Discussion forums: 17%

9 6

On-site branded communities / forums: 18% Mobile communications: 16% Content tagging: 12% Employee blogging: 15% Internal or in-company social networking: 7% SMS service alerts: 18% Social knowledge sharing: 8%

Intranet: 6% Podcasts: 5%

User ratings and feedback: 28% Video sharing: 22%

Social knowledge sharing: 8%

Instant messaging: 7% Internal microblogging utilities: 2%

3 0 -3 -6

User

9Video sharing: 22%

Video

Discussion forums: 17% 6 Social networks: 15% On-site branded communities / forums: 18%

Discu

3Mobile communications: 16%

Mobi

On-si

Email newsletters: -5%

Content tagging: 12% 0 Employee blogging: 15%

User ratings and feedback: 2% Video sharing: 5%

Conte

Discussion forums: -3% On-site branded communities / forums: 4% Mobile communications: 6%

Content tagging: -3% -3Internal or in-company social networking: 7%

SMS service alerts: 18% -6 Social knowledge sharing: 8% Social networks: 15%

Email newsletters: Intranet: 6% -5% User ratings and feedback: 2%

Podcasts: 5% Video sharing: 5%

Discussion forums: -3% Instant messaging: 7%

Intern

Employee blogging: -2% Internal or in-company social networking: 2% SMS service alerts: 6%

0 -3 -6

Intran

Intranet: 2% Podcasts: -6%

Podc

Instant messaging: 1% Internal microblogging utilities: -1%

Insta

Mobile communications: 6% utilities: 2% Internal microblogging

Intern

Content tagging: -3% Employee blogging: -2% Internal or in-company social networking: 2% SMS service alerts: 6% Social knowledge sharing: -1%

Intranet: 6%

Intranet: 2%

Podcasts: 5%

Podcasts: -6%

Instant messaging: 7%

Instant messaging: 1%

SMS

Socia

Social knowledge sharing: -1%

On-site branded communities / forums: 4%

3

Empl

27


5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

Figure 32

Using social media as a customer service Company: Where does your organisation plan to invest to improve customer service? channel: 54%

Using social media as needs a customer service Technology to understand of customer (e.g. channel: feedback54% tools): 49% Technology teams to understand needs of customer Cross-functional to improve customer (e.g. feedback experience: 41% tools): 49% Empowering staff on the front-line to make Cross-functional teams to improve customer decisions: 36% 41% experience: Employee collaboration tools: Empowering staff on the 27% front-line to make decisions: 36% There is no investment: 10% Employee collaboration tools: 27%

There is no investment: 10%

0

10

20

30

40

50

60

0 10 and agency 20 30 40 50 60 Client-side respondents indicate that technology used to understand customers’ needs will play an important role in the quest to improve customer experiences and provide better customer support. Almost a half of responding companies (49%) and 57% of agency clients plan to invest in this type of technology.

Many companies (41%) plan to use crossfunctional teams to improve customer experiences. However, less than a third of respondents (27% of companies and 29% of agencies) plan to invest in employee collaboration tools with a view to improving customer service.

Link between Employee Engagement and Customer Engagement Survey respondents were asked how they have exploited the link between employee engagement and customer engagement.

28

While the majority of companies acknowledge there is a strong relationship between the two, few of them are able to provide clear examples of how they exploited it. As some respondents noted, getting employees involved in Customer Engagement initiatives can sometimes be a major challenge and is perceived as a “reluctant sense of duty”. This is particularly evident from the supply-side responses – agencies say that most of their clients are still getting to grips with Customer Engagement and are not yet ready to exploit this link. Some organisations are offering rewards for committed employees, while others are empowering them or developing brand development and training programmes. Several respondents mentioned employee brand advocacy and this is noteworthy, as this is difficult to replicate and can become a competitive advantage.

“Our employees are part of our advertising model. They can also share the key message of our company. If they are engaged, [it] is more likely they can help us to engage consumers.” “Our teams need to be engaged and understand the business drivers in order to effectively and proactively manage customer calls and emails.” “Vocal, knowledgeable staff tweet/interact on their own accounts in their own networks, this is great knock-on effect for company.” “We’ve put in place a programme for employees to learn to take personal responsibility for the customer experience.” “It is a challenge to get employees to participate in the ‘softer’ side of the information. They are too busy, and do not see this as a priority. I need to work to convince them that their participation is crucial to the success of using wider media and engaging not just associated organisations but interested members of the public too.” “We hold regular customer feedback surveys and report findings back to employees, rewarding positive reports and learning from [anything] negative.” What company respondents said about the link between Employee Engagement and Customer Engagement.


5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

Location-based marketing is a relatively untapped area, but it is encouraging to note that the proportion of companies that are planning to use it has increased by 15% in the last year. Mobile Investing in the mobile channel

Figure 33

The vast majority of company respondents (73%) are planning to invest in the mobile channel in 2011, an increase of 13% since last year when 60% planned investment.

Yes, Yes, but but limited limited investment: investment: 54% 54% Yes, Yes, significantly: significantly: 19% 19%

No: No:-14% -14%

66

Yes, Yes,but butlimited limitedinvestment: investment:5% 5% Yes, Yes,significantly: significantly:8% 8%

00 -3 -3 -6 -6 -9 -9 -12 -12

Using mobile marketing to build engagement

It is noteworthy that a larger proportion of companies are planning to use mobile marketing to create opportunities for user-generated content (42%) and mobile commerce (46%).

99

33

Agency respondents report fewer numbers of companies (18% compared to 27% on the client-side) that are not planning any investment in the mobile channel, but the decrease has not been significant.

Overall, the use of mobile marketing to foster Customer Engagement has increased across most of the areas and is expected to further increase in the next 12 months. More than a quarter of responding companies (28%) are now creating applications (an increase of 12% since last year) and just under one half (47%) are planning to do so within the next year.

Company: Investing in the mobile channel – difference between 2011 and 2010 results

No: No: 27% 27%

However, less than a fifth of client-side respondents (19%) are planning to invest “significantly”.

We have broken down mobile marketing into separate areas in order to better understand how companies are using this channel to build Customer Engagement .

Figure 34

Company: Do you plan to invest in the mobile channel in 2011?

-15 -15

Companies are much more likely to be planning a range of mobilerelated initiatives than was the case a year ago.

Surprisingly, more than a half of company respondents (52%) have no plans for integrating mobile into broader CRM. Similarly, location-based marketing is a relatively untapped area, but it is encouraging to note that the proportion of companies that are planning to use it has increased by 15% in the last year. Broadly speaking, companies are much more likely to be planning a range of mobile-related initiatives than was the case a year ago. On the agency side, a larger proportion of respondents indicate that mobile marketing is used to build Customer Engagement. According to agencies, there will be a shift in how their clients use mobile marketing to

build Customer Engagement. A much larger proportion of organisations are planning to focus on location-based marketing (+18%), while the growth of mobile applications (-2%) looks set to slow down. In contrast with company respondents, agencies indicate that fewer organisations plan to use mobile marketing for personalised information in the next year, 37% compared to 52% on the client-side.

Challenges related to the mobile channel Survey respondents were asked to describe the main challenges they face in relation to the mobile channel or to a particular device or platform. Lack of expertise and budget, internal buy-in and integration issues were

cited by both companies and agencies as major challenges. Many companies say they do not have the expertise to initiate mobile projects and this is mainly because they do not have specialised personnel. The lack of knowledge and skills is sometimes preventing organisations from fully understanding and realising the potential benefits and business value. The majority of survey respondents that have invested in mobile have not integrated it with their internal systems, seeing it as distinct channel instead of providing a multichannel experience. Therefore, they are not able to properly measure results and assess its business impact.

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COMMENT

Being honest with people and managing expectation is a key step in engaging with them, letting them down is a key step in ruining relationships. way there. It also means that we’re in a better position to predict the behaviour patterns for visitors with different intentions and if we can do that we can manage expectation better which neatly brings me full circle to what I wrote about two years ago in the 3rd Annual Customer Engagement survey. Being honest with people and managing expectation is a key step in engaging with them, letting them down is a key step in ruining relationships. In the era of the social network everybody is keen to be your friend or be liked by you but from a customer / supplier perspective until they can prove that they can deliver, genuine positive engagement may yet be a way off.

Hugh Gage

Assumption is the mother of all mistakes How can you engage with somebody if you don’t know what they want or what they’ve come to do? …as they say, “assumption is the mother of all mistakes” This year’s report shows that online surveys are still a comparatively popular way of gathering visitor and customer intelligence to help improve engagement. They can be anonymous and importantly the output can be fed into a web analytics tool and combined with the highly rich and granular click-stream data therein. The marrying up of these two sets of data so that they can be interrogated in the context of each other is an important step forward giving us a set of anonymised data showing reasons for customer visits. Additionally, by segmenting the survey output with analytics click-stream data, we can compare what visitors say they have come to do and what they actually do, this is especially helpful since (as we all know) what people say and do are often two quite different things. Armed with this information we really are in a position to deliver an engaging experience; being able to bridge the gap between intention and action means that we’re two thirds of the

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After the wild exuberance of the last few years, we’re starting to see a maturation in how businesses use the various tools at their disposal to engage with customers.

Hugh works as an independent web analytics and usability consultant helping businesses drive revenue through improved website performance. He is also author of the Web Pro Analytics column in the UK’s .NET magazine and sits on the Web Analytics Association Examination Committee.

Steve Woods

Maturation of Engagement Models After the wild exuberance of the last few years, we’re starting to see a maturation in how businesses use the various tools at their disposal to engage with customers. This survey cements that trend in a number of areas.

First, in looking at the way in which engaged customers are seen to have benefited the business, this mainly comes around the areas of recommendation, support of others, and knowledge of products.

Most organisations are hesitant to declare a significant victory in channels outside of the highly measurable ones like email marketing. Engaged customers as influencers, advocates, and evangelists are becoming a critical part of many organization’s efforts to get the word out and influence buying decisions among peers. Indeed, as leading organizations begin to include the early stages of awareness and discovery of solutions as part of their overall revenue performance management efforts, this type of influencer-based awareness becomes increasingly visible. However, in the measurement arena, the challenge of measuring this engagement remains. Most organisations are hesitant to declare a significant victory in channels outside of the highly measurable ones like email marketing. Even newer channels are growing aggressively when they can be measured effectively; the Facebook “Like” button is one tangible example. Given investment plans highlighted in this survey, we can expect that to be a common tactic in many organisations’ revenue engines in coming years. As the shift has continued, online has clearly become the dominant channel. This is evidenced not only in the fact that web

analytics is seen as by far the most effective indicator of customer intelligence, but also in the subtler trends towards customers demanding “simple”, “high quality”, and “great service” over concepts like “playful”, which featured strongly in the early, experimental days of the new engagement channels. Steve is CTO and cofounded Eloqua in 1999 and wrote the book, Digital Body Language. He was recently named as one of Inside CRM’s Top CRM Influencers and recognized by Frost & Sullivan with their GIL prize for Innovation.

Theresa Clifford

What social media can and cannot do The notion that we can increase engagement through an increased use of social media is more popular than ever. The Digital Britain campaign led by Julie Meyer aims to get 60% of the 12.5 million who are not currently online connected and engaged by 2014. The 2010 UK general election saw many strategies to try to engage with the public online. Likewise public service news organisations plead with audiences to ‘email in the news that matters to you’ and text / tweet and phone in our views so they can prove they are engaging with the public.


COMMENT

Malcolm Gladwell, in his recent contribution to the New Yorker, caused a stir by arguing that while virtual social engagement may be right for some communication it does not promote passionate engagement that causes individuals to make commitments that result in social change. Better technology does not make it easier to motivate or convince or engage.

Ian Jindal

It’s time to focus on Retailer and Colleague Engagement

We should be clear what social media can and cannot do. Gladwell does have a point. Much was made of Obama’s presidential election campaign and its use of social media. However nearly two years on, with Obama now struggling to keep a majority in the Senate, we can see that social media alone cannot foster the engagement so desired by politicians. We should be clear what social media can and cannot do. Social media is just one tool in the box but as our survey shows it is probably one of the most important tools. Nearly 50% of respondents said that the development of social networks had resulted in tangible improvements to their organisation and because of this 58% plan to invest more in social media over the next year. Social media can help brands understand how to keep their customers engaged and satisfied. And as we all know engaged and loyal customers mean higher value sales and ultimately more profits. Theresa is Sales & Marketing Director at cScape. She has worked in the digital industry since 1997 and has written for a variety of publications and presented at many events around the globe.

Successful customer engagement isn’t about purchasing a set of tools or visiting a bunch of websites with strange names.

For the fourth year in a row c. 90% of respondents see Customer Engagement as Important or Essential. Frankly, there’s limited room for businesses to be ‘more convinced’, but as the neophyte crush on all things social and engagement matures we’re left with the challenges of a more sophisticated and nuanced understanding, a recognition of the inter-relatedness of marketing activities and a concern that we need to do more within our own businesses to ‘engage’ with our colleagues. We also see a drive towards greater simplicity. This is a benefit not only for the customer (chasing our brand from website to Facebook to tweet via YouTube, email and feedback request...) – this is a benefit for the retailers too. Customer Engagement in 2011 is to engage the whole business in serving customers. Mobilising and motivating our colleagues to respond in a concerted fashion is a major challenge. Rather than simply putting a marketing gloss on feedback – akin to putting lipstick on a pig – full engagement means

changing our procurement, quality assurance and supplier selection; refining product information; designing model interfaces, fit for purpose... and then knitting these together across all customer touch points. That there is a more commercial edge to engagement is welcome: 8% more respondents see increased purchasing as a sign of engagement. This realism is reinforced in the recognition that ‘engagement’ is not reducing a customer’s switching of suppliers or being forgiving of higher prices. The long and the short of progress it seems is a focus upon the truest form of engagement - the customer’s money! Ian Jindal is a consultant, leading transformation through eCommerce in Retail and Publishing. He is the founder and Editor in Chief of Internet Retailing, created the MSc in Internet retailing & co-founded The European e-Commerce Forum.

Bruno Ancona Lopes

Fasten your seat belt, Dorothy! What a special moment in time! The first year, of the second decade, of the 21st century and marketing will never be the same again. The adoption of mobile and social technologies has accelerated tremendously and activities

that were considered experiments are now becoming more mainstream: 51% of the companies already claim to employ social media as a customer service channel and 73% are looking to invest in mobile in 2011. It’s almost too good to be true, but it’s true! The change is clear. Companies are turning their products and services into experiences which are co-created with their customers. Brand presence is shifting from being contained wihtin your chosen media to being always on - anytime, anywhere. Digital has broken free and become a way of thinking. It has reshaped the way advertising, PR, direct, events and sales promotion efforts are planned and executed. The results are coming: engaged consumers recommend their favorite brands to friends and family members, are more loyal, provide more feedback, are more connected with their favorite brands, and aware of their communication efforts. These new, empowered consumers are helping the companies execute their vision. Business and marketing now seek to deliver human happiness. Love is the killer app. Profits are following. Building Customer Engagement works. 74% of the companies in this study saw positive results. The ones that didn’t should not give up. For successful Customer Engagement programs to take off, company and agency involvement is paramount. Agencies should provide creative fuel, a clear roadmap and access to specilised services and technology providers, with constant ROI tracking. Companies should be present, focused both on strategy and implementation and responsible for customer interactions. You can’t fake that you care.

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COMMENT

In the attention economy, noise levels are high, the competing offers are abundant and product/service quality is somewhat standardised. Engagement is a need. It’s very exciting to be helping companies shift from testing the waters to diving deep into this new modus operandi. The brave will always reap the rewards. Dive in! Bruno is the CEO of Foreplay a full service digital agency from São Paulo, Brazil. Co-founder of the Online Performance Group, with branding, conversion management and consulting businesses.

Becky Carroll

Desperately seeking customer service Customer Engagement plays a crucial role in long-term customer relationships and loyalty, and this year’s report makes it clear how companies can take Customer Engagement to the next level in 2011. In 2010, we saw many more companies “dipping their toes” into social media, and the survey shows they are starting to see results in this area. To take it to the next level, organisations will now need to use these new tools to interact with customers in ways that help them achieve their goals and build relationships, with a strong focus on customer service.

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According to the report, 51% of companies state they are already using social networks to improve customer support, and more than half are planning to invest in social media as a customer service channel. Interestingly, when organisations were asked which customer attitudes would be most significant in 2011, one of the top areas was intolerance of poor customer service (42%). How will the investment in using social media for customer service be perceived by these customers? There are a few success factors for using social media in customer service. First, the organisation needs to have solid back-end processes to answer customer inquiries or concerns. If a company doesn’t currently do a good job of executing customer service, then adding social media to the delivery channels will not make it better. In fact, it may highlight process issues in a very public way! Second, an organisation’s social media team needs to be tightly aligned with the customer service team to ensure a consistent experience and smooth data transfers and hand-offs. Better still, make sure customer service is part of the social media team, training them on the tools and empowering them to do what they do best – care for customers. I firmly believe that 2011 will be the breakthrough year for customer service via social media. Are you ready? Becky is founder of Petra Consulting Group, a consultancy focused on customer centricity. In her main role, she is the Community Program Manager for Verizon. Becky’s first book on business growth through existing customers will be published by Wiley in 2011.

One of the major challenges related to the mobile channel is the lack of senior management and internal buy-in. Mobile is not a priority for most organisations and is not integrated into their overall strategy. In order to successfully use mobile marketing to build Customer Engagement, it needs support from all departments, long-term planning and alignment with business objectives. Fragmentation of mobile handsets and platforms is gradually becoming a strategic concern and some companies find it difficult to keep pace with the latest developments in the market. The mobile sector is extremely diverse and organisations need to choose a single platform or develop different versions of their applications for multiple handsets and platforms. This not only significantly increases the development costs, but also makes it more difficult to ensure that the content delivered remains consistent across all platforms. Tablets are also considered a game-changer, having a direct impact on development and maintenance costs. To deal with this increasing fragmentation, some organisations are developing platform-independent web services that can be accessed through any browser. While this is a practical solution, they still need to allocate resources to differentiate in this competitive environment.

Figure 35

Company: Using mobile marketing to build engagement – difference between 2011 & 2010 results 12 10 8 6 4 2 0 -2 -4

Creating applications: 12% Increased dialogue with customers: 3% As integral part of customer lifecycle marketing: 6% Creating opportunities for user-generated content: 8% Personalised information: 1% Transactional / m-commerce: 5% Location-based marketing: 4% Integrating mobile into broader CRM: -3%

Figure 36

Company: Planning to use mobile marketing to build engagement within the next 12 months – difference between 2011 & 2010 results 25

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15

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Creating applications: 13% Increased dialogue with customers: 6% As integral part of customer lifecycle marketing: 13% Creating opportunities for user-generated content: 23% Personalised information: 13% Transactional / m-commerce: 18% Location-based marketing: 15%

0

Integrating mobile into broader CRM: 3%


COMMENT

Figure 37

Ed Lloyd-Williams

Company: In what ways are you using mobile marketing to build Customer Engagement?

Creating applications Increased dialogue with customers As integral part of customer lifecycle marketing Creating opportunities for user-generated content Personalised information Transactional / m-commerce Location-based marketing Integrating mobile into broader CRM

We are doing this

Plan to do this within next 12 months

A long way off/ no plans

28%

47%

25%

23% 20% 17% 15%

42%

35% 36% 41%

15%

46%

39%

11%

41% 42%

48%

6%

44% 42% 52%

33%

52%

Figure 38

Agencies: In what ways are your clients using mobile marketing to build Customer Engagement?

Creating applications Increased dialogue with customers As integral part of customer lifecycle marketing Creating opportunities for user-generated content Personalised information Transactional / m-commerce Location-based marketing Integrating mobile into broader CRM

They are doing this

Plan to do this soon

A long way off/ no plans

36%

40%

23%

27% 22% 19% 23%

48%

25%

44% 41% 37%

35% 40% 39%

18%

37%

44%

14%

47% 43%

39% 46%

11%

Design can help engage employees The ability to use social media and being able to pull in third party applications has blurred the line between Intranet and Internet design.

Designing an intranet is seen by some as; at best a major challenge that is to be embraced by all who are involved in the process – and at worst, a thankless necessity that is the bottom of a list of priorities. Taking intranet design responsibly is vital as intranets can and do become a massive expanse of unkempt content that can quickly grow out of control, so that eventually nobody uses it. This leads to discontent and dissatisfaction with the communications department and company processes generally. Well executed and considered design needs to be embraced, as core to any Intranet roll out. Audience research should be the first step towards developing your powerful communications and collaboration tool. But even with the best planning and all the research in the world, your intranet isn’t going to be the site of choice for all staff. Nor should you try to make it so – you will be setting yourself up for a fall if that is the case, you can’t replace or equal all other sources of external content. You can make your Intranet somewhere employees want to go, even if it

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We need to start doin Not very (we don touch-po

Not very advanced (we don’t even know Quite ad touch-points (we we have kno custome

COMMENT

is not their first port of call. What you can do is provide an environment that is engaging and functional in equal measure – balancing a usable enticing interface with the wealth of  information you wish to communicate, and incorporate external features to help engage people.

Companies that fail to follow good design processes when building their intranet end up with unengaged employees. The increasing ability to use social media and pull in third party applications have blurred the lines between Intranet and Internet design. Unfortunately, this does not always mean that organisations place equal importance on the design of their Intranet as they do on the design on their public facing websites. Companies that fail to follow good design processes when building their intranet end up with unengaged employees. Employees frequently fail to find what they want, request functionality that already exists (they just don’t know it’s there). While companies who have the vision to follow good design principles from the outset, will see the benefits with more engaged employees. Ed is an award winning Creative Director at digital agency, cScape. His extensive brand and design experience includes designing for Kodak, American Express, British Airways, Bang & Olufsen, Microsoft, Virgin, Vodafone, Barclays, Deloitte and Samsung.

Figure 39

Mapping and measurement

Very advanced (we know Company: How advanced are you at mapping customer experiences to obtain a single viewall our cust touch-points) of the customer?

Mapping customer experience to gain a single view of the customer Mapping customer experiences across various touch points can help organisations identify which interactions are likely to affect customer loyalty and their relationship with the brand. The majority of company respondents indicate that they are either “quite advanced” (38%) or “very advanced” (6%) at mapping customer experiences to obtain a single view of the customer. Encouragingly, the proportion of companies that feel they are “not very advanced” or “need to start doing this” has decreased to 56%, down from 64% last year. The equivalent agency responses are shown in Figure 40. It should be noted that the proportion of agencies indicating that their clients are “quite advanced” or “very advanced” at mapping customer experiences has remained the same since last year, at 36%.

Methods of gathering customer intelligence Figure 41 shows the most useful methods used by companies to gather customer intelligence in the context of customer engagement. Respondents could check up to three options. More than half of responding companies (57%) say they have found web analytics to be one of the three most useful methods for engaging their customers online.

Quite advanced (we know most ou Veryofadv customer touch-point (we kno touch-po

22%

24%

We need to start doing this

17%

There is a significant gap between the proportion of companies that find social media/buzz monitoring useful for engaging customers online and what agencies indicate.

Not very advanced (we don’t even know how many touch-points we have)

38% 33%

Not very advanced (we don’t even know Quite ad touch-points (we we have kno custome

43% 42% 6% 3% 3%

Quite advanced (we know most ou Veryofadv customer touch-point (we kno touch-po

6%

0

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2009

2008to start doin 2010 We need Not very (we don touch-po

35%

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Figure 40

2011

40% 36%

Very advanced (we know all our customer touch-points)

20

20 2010 We need 34%

40

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Verya advanced Agencies: How advanced are your clients at mapping customer experiences to obtain (we know all our cust single view of the customer? touch-points) 2011 2009 16% 24%

2008to start doing this 2010 We need

18% 17% 48%

Not very advanced (we don’t even know how many touch-points we have)

40% 36% 35% 32%

Quite advanced (we know most of our customer touch-points)

33% 43% 42% 4%

Very advanced (we know all our customer touch-points)

3% 3% 6%

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Web analytics: 57%

5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011 Feedback from customer-facing staff: 36%

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Customer journey analysis: 34% Customer interviews: 30%

40

Online customer surveys: 25% Social media / buzz monitoring: 23%

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Feedback from customer-facing staff is cited as a top-three method by more than a third of companies (36%), increasing by 9% in the last year. There has been a significant decrease in the proportion of companies saying that online customer surveys are useful, from 35% to 25%. Despite the increased focus on building presence on social networks, there is a significant gap between the proportion of companies that find social media/buzz monitoring useful for engaging customers online and what agencies indicate. One third of agencies (33%) say their clients find it useful, compared to just under a quarter of respondents (23%) on the client-side. A larger proportion of agencies than last year indicate that their clients find customer interviews useful – 34% compared to 25% in 2010. Despite its growing importance in delivering engaging customer experiences, usability testing is considered to be useful by fewer agency clients (down by 8% since 2010).

Challenges related to measuring and understanding Customer Engagement When asked to describe the main challenges related to measuring and understanding customer engagement, the lack of standards and established benchmarks was a key theme in the responses.

The vast amount of data and different types of channels cause a data overload for some companies, as they find it difficult to filter it, prioritise it and turn it into actionable information. For some companies, measuring Customer Engagement is a daunting task because they are in the early stages of investing in this area and do not have clear objectives. In order to use the most effective measurement methods and tools, organisations need to have a more strategic approach to customer engagement, understand its overall business impact and what they want to achieve. The vast amount of data and different types of channels cause a data overload for some companies, as they find it difficult to filter it, prioritise it and turn it into actionable information. Sometimes this data is not shared across departments and databases are not fully integrated to gain a single view of the customer. Both companies and agencies cite the lack of senior management/internal buy-in as a major challenge, probably due to the fact that they are not fully aware of the potential benefits. The knock-on effect is that investment in Customer Engagement initiatives is limited and they are not able to use the best measurement tools.

Figure 41

Usability testing: 16%

20of the following methods of gathering customerMonitoring online search practices: Company: In the last 12 months which intelligence have you 15%

found most useful for engaging your customers online? 10

Focus groups: 14%

Web analytics: 57%

Offline customer surveys: 10%

Web analytics: Feedback from 57% customer-facing staff: 36%

Third party data providers: 7%

Feedback journey from customer-facing Customer analysis: 34% staff: 36%

Attribution modelling: 5%

Customer interviews: journey analysis: Customer 30% 34%

Online panels: 1%

40

Customer interviews: 30%25% Online customer surveys:

Shadowing customers / ethnography: 1%

30

Onlinemedia customer surveys: 25% 23% Social / buzz monitoring:

60 60 50

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Social media / buzz monitoring: 23% Usability testing: 16%

30 20

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Usability testing: Monitoring online16% search practices: 15%

Web analytics: 6%

20

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Monitoring online Focus groups: 14%search practices: 15%

Feedback from customer-facing staff: 9%

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Focus groups: 14% Offline customer surveys: 10%

Customer journey analysis: 3%

4

Offlineparty customer surveys: 10% Third data providers: 7%

Customer interviews: 3%

2

Third party modelling: data providers: Attribution 5% 7%

Online customer surveys: -10%

0

Attribution modelling: 5% Online panels: 1%

Social media / buzz monitoring: 2%

Online panels: 1% Shadowing customers / ethnography: 1% Shadowing customers / ethnography:

Usability testing: 1%

10 10 0 0

Figure 42

-2

Monitoring online search practices: 1%

-4 1% Company: Most useful methods of gathering customer intelligence – difference between 2011 and 2010 results Focus groups: -4%

-6 Web analytics: 6%

Offline customer surveys: 0%

Web analytics: 6% Feedback from customer-facing staff: 9%

Third party data providers: -2%

Feedbackjourney from customer-facing Customer analysis: 3% staff: 9%

Attribution modelling: 0%

6 4

Customerinterviews: journey analysis: Customer 3% 3%

Online panels: -4%

4 2

Customer interviews: 3%-10% Online customer surveys:

2 0

Onlinemedia customer surveys: -10% 2% Social / buzz monitoring:

Shadowing customers / ethnography: 0%

0 -2

Social media / buzz Usability testing: 1% monitoring: 2%

10 10 8 8 6

-2 -4 -4 -6 -6 -8 -8 -10 -10

-8 -10

Usability testing: Monitoring online 1% search practices: 1% Monitoring Focus groups:online -4% search practices: 1% Focus customer groups: -4% Offline surveys: 0% Offline customer surveys: 0% Third party data providers: -2% Third partymodelling: data providers: Attribution 0% -2% Attribution modelling: 0% Online panels: -4% Online panels: -4% / ethnography: Shadowing customers 0%

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COMMENT

In this new ‘me-centric’ rather than ‘brand-centric’ world people are bound to be less tolerant of  unplanned, under-resourced, badly trained, disconnected, deaf-eared customer service. The O2 experience above was customer service-centred, not marketing. Surely the target should have been customer retention.

Clare O’Brien

Mise en place The last time I called O2 to get my phone fixed, I was asked where had I bought my handset as this would determine whether or not the person I was talking with could help with my problem. Aside from the fact that I couldn’t remember whether it was an online, shop or phone purchase, I was horrified to discover that as a customer of 15 years or so standing, I was categorised by where I’d bought my last handset. It makes no customer service sense (there’s only one O2 – there’s only one of me). I can understand how, in their un-joined-up way, O2 arrived at this very unsatisfactory state of affairs... different systems, management and sales teams, targets etc. In the same way, excited as I am about the growing focus on creating great and useful customer experiences, very evident in this 5th Annual Customer Engagement Survey, I’m wondering how engaging the experiences that are eventually created will be. The more platforms we bring into play to market goods and services to people, the more joined-up the thinking needs to be to ensure consistency of brand experience and, increasingly, service delivery.

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We need to treat the web as a key part of a customer’s engagement with a brand; it is no longer just a discount-driven order completion channel.

In the world of professional kitchens, trainee chefs are taught – before anything else – that to produce great dishes on time, plate after plate, you need to get your beans in a row first. It’s called mise en place. It means, very simply, making sure that every single ingredient and piece of equipment required to make it are ready and waiting at every station to be combined into the dish the diner orders. If it’s not mise en place, chaos will soon overrun the kitchen and disappointment will be the overriding experience of the diner. Translating the concept to the digital world – and that’s actually the real world these days – you could say that what we may want to be aiming for is a kind of mise en place for the content that our customers and users order up each time they make contact with us by computer, iPad, phone, call centre, shop... It’s pretty pointless trying to manage this content cross-platform without having any kind of centralised content strategy that ensures content parts are broken down, tagged and slotted into (and out of) the right workflow stream at the right time. Admittedly, this is the part of the business that’s distinctly un-sexy (say, compared to creating an ad or DM campaign), but unless it’s as fundamentally addressed as technology selection or management, we’ll be serving up disjointed un-engaging digital experiences with missing and out-of-date or off-message components that end up disappointing customers and undermining brands.

We’ll be hearing a lot more about semanticvalue (a great and descriptive phrase from Richard Patterson) from now on. Make no mistake... we can only deliver the kinds of experiences that customers expect in this multi-platformed world of the here-and-now (the semantic world). Joined-up thinking and planning are required and that means investing first in getting our content mise en place. Clare is founder of London-based consultancy CDA. Her mission is to build a framework for digital content planning, cross-platform including measurement, that clients can use to create easy use communications and services.

Terry Hodgetts

Good technology is no substitute for good customer service I recently ordered a relatively rare book from a well-known Internet retailer. The delivery estimate was two weeks. Over the last ten weeks, I have received an automated email, about every two weeks, apologising for the delay in delivery and pushing the delivery date back by a small amount. It feels similar to when I am waiting for a delayed train, and the ETA displayed on the platform sign keeps slipping by two

or three minutes at a time. Sometimes, there is a limit to what technology can do for the customer experience. In reviewing the survey results, I find it intriguing that only 27% of agencies, and 37% of clients are planning to invest in empowering front line staff to provide better service. Granted, the survey is looking at online Customer Engagement, but I wonder if respondents are looking through the wrong end of the telescope - focusing too much on the technology, and not enough on the customer receiving the service. At Aston Business School, we are enthusiastically embracing new technologies in a variety of areas to improve participant experiences, both for students on our accredited programmes, and with our commercial clients for executive development. However, we do not forget that ultimately, whether it be a networking opportunity, an enquiry for information, or the delivery of learning resources, the service itself is provided by people. Technology is a tool and a channel, not the objective in itself. Our research clearly shows the importance of empowering and engaging staff to take ownership and deliver outstanding service. Whatever the technology might offer, over the longer term the richness of the customer experience can only be truly impacted by the motivation, creativity and commitment of a well-trained and well-equipped workforce. Every business is a people business. Terry is programme Director for Aston Business School.


COMMENT

Steve Kennedy

Customer Engagement is a two way thing Online services like Facebook and Twitter can’t be ignored but many don’t see their value and even if they do, they don’t take advantage of them properly. In 2009 Facebook grew from 100m to 300m users and grew even faster in 2010 so they’re now at 500m. That’s a HUGE population and they’re all targetable in some form or other. Though Twitter isn’t as big (yet) they’re also growing fast, especially via mobile clients with some carriers offering free access to both. Both services allow geo-tagging whereby the location of the user is stored with the status update or tweet. That’s a particularly useful piece of information. However, utilising social networking is a two-way thing, if a company sets up a Facebook page or a Twitter ID, it’s no use letting people join/follow and just posting information. That’s like standing in a crowd and shouting, you’ll get people to listen, but they’ll get bored very quickly and wander off. The whole point is to make the services conversational (or maybe that should be

conversocial), so start a discussion, LISTEN to what users’ say and respond. Get the users to become brand advocates and they’ll get their friends to join in too. Now with location information being available too, it’s possible to make the content local, which is even more engaging and a mobile network did just that by running a treasure hunt using Facebook check-ins, not only did the user get the chance of winning a prize, the check-ins were visible on their public stream so their friends could see what was happening (and join in if they wanted). Dell increased their Dell Outlet sales by $6.5m in 2009 by offers through their Twitter account to their 1.5m followers. Many companies now user Twitter as a support channel and put their more technical customer service operatives on the Twitter lines so users can get fixes to problems quickly (O2 & Vodafone are examples). Facebook also has many success stories where brands have run campaigns using the Facebook platform (and a slew of companies now specialise in offering Facebook application development), but this can be a major hurdle too as getting things wrong on Facebook means you can get a lot of disenchanted users very quickly (apps don’t actually run on Facebook but on your servers with Facebook being an entry to those apps). So use the tools available and if you can’t manage things in-house use a reputable agency, but don’t ignore social media it’s here to stay and your customers are out there waiting to listen.

Steve is a mobile/ISP/telco and wireless expert over 20 years industry experience and is the Chief Strategy Officer (CSO) for DBVu Ltd. He also a Director of UKEC Ltd which is the governing body for ENUM (Electronic Numbering) in the UK.

Ben Robb

The rise and rise of social in the enterprise In the public internet, social networking is the norm, with the rise of easy to use websites that can facilitate people’s desire to record their lives online. Today’s employee expects that they can find people, communicate with their friends and build large, complex social networks both for personal and professional reasons. This year’s survey shows that only 12% of companies are using internal or in-company social networking for product development and innovation but as the use of  social media outside the enterprise increases, expect this number to increase in companies who are flourishing and innovating in these areas. But what about within the enterprise? Traditionally, senior management have been wary of social networking within an organisation. They put in place measures that prevent employees accessing common public social networks, scared of their employees

Technology is a tool and a channel, not the objective in itself.

wasting large amounts of time on these websites, and they get IT, Legal, Compliance and HR departments to draw up acceptable use policies to prevent use of social tools in company time. This approach may have worked in the past, but it won’t work now and it will hinder Employee Engagement. • Employees have come to expect the same level of engagement with their peers within the company as they can get outside. • Enterprise social networking can increase productivity and employee satisfaction – social networks have always existed in companies, but new technology allows your employees to really leverage those networks to the company’s advantage. • Informal collaboration is a great driver for innovation within the organisation – by breaking down traditional departmental barriers you can start to use your employee’s innate knowledge more effectively. • Finally, the rise of the smartphone means your employees will be social networking anyway; with little you can do to prevent it. Gartner predicts that by 2012, social networking services will replace email as the primary vehicle for interpersonal communications for 20% of business users. If you do not supply a medium for that to happen within your control, it will happen on public systems – and that really does scare the average Compliance Officer! Ben is CTO at cScape. He is a Microsoft SharePoint MVP and is a regular speaker at events and conferences across the globe.

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5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

“Our ambition is to conduct the Online Customer Engagement Survey annually in order to provide a valuable benchmark for organisations of all kinds to assess their state of readiness and effectiveness in this area.” Annual Online Customer Engagement Survey Report 2007

Annual Online Customer Engagement Survey Report

2007

2008

Surveyed October 2006

Surveyed October 2007

“Customer Engagement is the best measure of current

“The continuing rise of social media and mobile

and future performance; an engaged relationship

technology is a potentially rich yet particularly

is probably the only guarantee for a return on your

challenging arena for Customer Engagement.

organisation’s and your client’s objectives.”

It is on these platforms that the largest gap between engagement and monetisation is at the moment.”

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5th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2011

2009

2010

2011

Surveyed October 2008

Surveyed October 2009

Surveyed October 2010

“Those organisations able to grasp the changes in our

“The introduction of social tools is unprecedented.

“The past year has seen a dramatic increase in companies

customers’ behaviours and psychology, while placing

Technologies like the telephone and email had all

not only listening but now responding to the concerns of

an emphasis on delivering increased value, will be best

established themselves (and their associated behaviours)

their audiences via channels that only a few months ago

placed to emerge winners from the current economic

within business before making their way into society as

were seen as a threat - or at the very least uncontrollable.

situation, those that can’t have a lot to lose.”

a whole. Today we are seeing the reverse as enterprises

As these pioneers have discovered, there is no substitute

struggle to adjust and embrace the pre-establilshed

for people. Social media has put people right back at the

attitudes and behaviours of customers and employees

centre of things – just where they should be. ”

while trying to bring these social tools ‘in-house’.”

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Ultraspeed is proud to sponsor this report

Ultraspeed was founded in London in 1998. Since then we’ve grown big enough to make substantial waves in the hosting market with our innovative approach and forward-looking technology. Today, we host over 50,000 UK websites for customers of all sizes. Yet we’ve not lost sight of where we come from and what made us great and we still treat each of those customers as friends and colleagues. We’re still in London (and Amsterdam) and our founder is our MD and we still approach managed hosting with the same innovative philosophy as when we began. We’ve got rather good at it. Our focus on not only providing the best of technology, but also the best customer service has meant we have developed in-depth relationships with our customers which has enabled us to create products which work to overcome their future challenges. This high-level customer engagement has contributed to a large part of our success and we are proud to say that 100% of our customers are happy with us and unhesitatingly refer us on to whomever they meet. These days, of course, we have plenty of rivals. Their

marketing departments love buzzwords like ‘virtual’ and ‘scalable’ and ‘cloud’. But they haven’t moved all their storage off their servers, eliminating moving parts and enabling full nightly backup with no processing overhead. They don’t promise 100% uptime to every single one of their customers. They don’t protect the environment and maximise return on investment with DC-powered low-voltage servers. We have the time and expertise to conceive and implement these innovations because we don’t do anything else. We’re devoted to providing excellent products with knowledgeable, committed customer service. We don’t put sales, support and engineering in separate boxes; our account management is focused on using our technology to meet your needs. We’re here 24 hours a day and we can swap a server within 15 minutes. We are not a one-size-fits all company and our clients know they can come to us with any question or request they may have. At Ultraspeed no problem is too big or too small to have a solution.

Our focus is on providing mid-sized businesses with industry-leading scalability and reliability for the most demanding applications that need continuous uptime. We do this via three product derivatives; Diskless Simple is our entry level offering that caters for smaller customer requirements up to a few servers/websites/ applications. Diskless Infrastructure by comparison is focused around supporting larger environments that run more demanding applications. In addition, Ultraspeed Adapt is available as an instant add-on to increase scalability for your next phenomenally successful online campaign, ensuring your message never goes offline. All Ultraspeed Diskless Products are based on the same technology platform and come with the same award winning service. www.ultraspeed.co.uk


Survey promotion partner Foreplay is a full service digital agency located in S達o Paulo, Brazil, the financial heart of Latin America. Our core belief is that marketing should be about telling great stories and providing unforgettable experiences, not interruptive messages.

We adopt a holistic approach, centered on leveraging customer intelligence and identifying their real needs to provide perceived value across multiple channels. This is achieved by understanding the content, entertainment, media and

purchasing habits of key audiences, and by crafting shareable content that is meaningful and productive to companies and consumers alike. Foreplay believes in the super powers of BIG dreams. www.foreplay.com.br


The value of the report This is the 5th year of the Annual Customer Engagement Report and it makes for a fascinating read. The report contains some incredibly insightful information that really helps to confirm some of the trends and talking points within the digital space over the last 12 months. We hear a lot about the consumerisation of IT at the moment and there are a couple of ways to view this; one is the proliferation of devices that people will use in their personal life appearing on the corporate network and secondly the way in which businesses need to embrace this demand from consumers

and workers alike. This second point is confirmed by some of the findings in this report. The increase in investment in usergenerated content, rich and interactive online experiences and the creation of a mobile channel shows how organisations are having to think about not just how, but also where people consume content. It is interesting to consider the trends in social enterprise with more organisations now looking to utilise social networking within their firewall through things like blogs, wikis and instant messaging. All these findings point to the fact that businesses

and their customers are demanding an integrated multichannel approach. There is a need to apply some of the same thinking to solutions that sit both inside and outside of an organisation. Never before has it been so important to consider the platform to deliver these experiences on and how you integrate your multichannel strategy with the whole of your organisation. Two things that are very clear from the report this year, that defining your digital marketing strategy is no easy task and the experience and expertise of organisations like cScape is becoming increasingly valuable. Matt Pilgrim Microsoft Digital Marketing Platform Group www.microsoft.com

Repeated interactions that strengthen the emotional, psychological and physical investment a customer has in a brand (product or company). Definition of customer engagement


cScape Annual Customer Engagement Report 2011