Customer engagement

Customer engagement is a business communication connection between an external stakeholder (consumer) and an organization (company or brand) through various channels of correspondence. This connection can be a reaction, interaction, effect or overall customer experience, which takes place online and offline. The term can also be used to define customer-to-customer correspondence regarding a communication, product, service or brand. However, the latter dissemination originates from a business-to-consumer interaction resonated at a subconscious level. Customer engagement is a business communication connection between an external stakeholder (consumer) and an organization (company or brand) through various channels of correspondence. This connection can be a reaction, interaction, effect or overall customer experience, which takes place online and offline. The term can also be used to define customer-to-customer correspondence regarding a communication, product, service or brand. However, the latter dissemination originates from a business-to-consumer interaction resonated at a subconscious level. Online customer engagement is qualitatively different from offline engagement as the nature of the customer’s interactions with a brand, company and other customers differ on the internet. Discussion forums or blogs, for example, are spaces where people can communicate and socialise in ways that cannot be replicated by any offline interactive medium. Online customer engagement is a social phenomenon that became mainstream with the wide adoption of the internet in the late 1990s, which has expanded the technical developments in broadband speed, connectivity and social media. These factors enable customer behaviour to regularly engage in online communities revolving, directly or indirectly, around product categories and other consumption topics. This process leads to a customer’s positive engagement with the company or offering, as well as the behaviours associated with different degrees of customer engagement. Marketing practices aim to create, stimulate or influence customer behaviour, which places conversions into a more strategic context and is premised on the understanding that a focus on maximising conversions can, in some circumstances, decrease the likelihood of repeat conversions. Although customer advocacy has always been a goal for marketers, the rise of online user generated content has directly influenced levels of advocacy. Customer engagement targets long-term interactions, encouraging customer loyalty and advocacy through word-of-mouth. Although customer engagement marketing is consistent both online and offline, the internet is the basis for marketing efforts. In March 2006, the Advertising Research Foundation announced the first definition of customer engagement as 'turning on a prospect to a brand idea enhanced by the surrounding context.' However, the ARF definition was criticized by some for being too broad. The ARF, World Federation of Advertisers, Nielsen Media Research, IAG Research and Simmons Research were in the process of developing a definition and a metric for customer engagement. Various definitions have translated different aspects of customer engagement. According to Forrester Consulting's research in 2008, it has defined customer engagement as 'creating deep connections with customers that drive purchase decisions, interaction, and participation, over time'. Studies by the Economist Intelligence Unit result in defining customer engagement as, 'an intimate long-term relationship with the customer'. Both of these concepts prescribe that customer engagement is attributed by a rich association formed with customers. With aspects of relationship marketing and service-dominant perspectives, customer engagement can be loosely defined as 'consumers' proactive contributions in co-creating their personalized experiences and perceived value with organizations through active, explicit, and ongoing dialogue and interactions'. The book, Best Digital Marketing Campaigns In The World, defines customer engagement as, 'mutually beneficial relationships with a constantly growing community of online consumers'. The various definitions of customer engagement are diversified by different perspectives and contexts of the engagement process. These are determined by the brand, product, or service, the audience profile, attitudes and behaviours, and messages and channels of communication that are used to interact with the customer. Since 2009, a number of new definitions have been proposed in literature. In 2011, the term was defined as 'the level of a customer’s cognitive, emotional and behavioral investment in specific brand interactions,' and identifies the three CE dimensions of immersion (cognitive), passion (emotional) and activation (behavioral). It was also defined as 'a psychological state that occurs by virtue of interactive, co-creative customer experiences with a particular agent/object (e.g. a brand)'. Researchers have based their work on customer engagement as a multi-dimensional construct, while also identifying that it is context dependent. Engagement gets manifested in the various interactions that customers undertake, which in turn get shaped up by individual cultures. The context is not limited to geographical context, but also includes the medium with which the user engages. Customer engagement is critical for the success of companies or brands in a technologically connected society. This progressive customer environment requires direct communication with customers so that they are involved in the process, giving them control in exchange for their attention, to increase brand awareness and loyalty, and to earn word of mouth. These exchanges increase the success of marketing campaigns, add value to the brand, and/or product or service, and enhance customer service. Amazon re-branded into 'serving the world's largest engaged online community', the World Federation of Advertisers (WFA) has created a 'Blueprint for Consumer-Centric Holistic Measurement' and the Association of National Advertisers (ANA), American Association of Advertising Agencies (AAAA) and the Advertising Research Foundation (ARF), have put together the 'Engagement Steering Committee' to work on the customer engagement metric. Although offline customer engagement predates online, the latter is a qualitatively different social phenomenon unlike any offline customer engagement that social theorists or marketers recognize. In the past, customer engagement has been generated irresolutely through television, radio, media, outdoor advertising, and various other touchpoints ideally during peak and/or high trafficked allocations. However, the only conclusive results of campaigns were sales and/or return on investment figures. The widespread adoption of the internet during the late 1990s has enhanced the processes of customer engagement, in particular, the way in which it can now be measured in different ways on different levels of engagement. It is a recent social phenomenon where people engage online in communities that do not necessarily revolve around a particular product, but serve as meeting or networking places. This online engagement has brought about both the empowerment of consumers and the opportunity for businesses to engage with their target customers online. A 2011 market analysis revealed that 80% of online customers, after reading negative online reviews, report making alternate purchasing decisions, while 87% of consumers said a favorable review has confirmed their decision to go through with a purchase. The concept and practice of online customer engagement enables organisations to respond to the fundamental changes in customer behaviour that the internet has brought about, as well as to the increasing ineffectiveness of the traditional 'interrupt and repeat', broadcast model of advertising. Due to the fragmentation and specialisation of media and audiences, as well as the proliferation of community- and user generated content, businesses are increasingly losing the power to dictate the communications agenda. Simultaneously, lower switching costs, the geographical widening of the market and the vast choice of content, services and products available online have weakened customer loyalty. Enhancing customers' firm- and market- related expertise has been shown to engage customers, strengthen their loyalty, and emotionally tie them more closely to a firm.