Why Customer Engagement Is Critical

Making your customer reference program, advisory boards, customer councils, and communities relevant to C-level management means you need to speak their language and help them pursue their objectives. Not yours.

Taken individually, a reference or communities program may not show up on your firm’s executive radar. But as crucial aspects of “customer engagement,” these programs — and the intimate customer interactions they produce — are critical to senior management.

Recently I had the pleasure of joining Bill Lee, President of the Customer Strategy Group, Asim Zaheer, VP Product Marketing for Hitachi Data Systems, and Sean Geehan of the Geehan Group for a roundtable discussion on the role these programs play in engaging your current customers. You can find the interview and roundtable discussion on Blog Talk Radio.

I think you’ll find the discussion lively as we talked about how to measure the effectiveness of engagement programs, how specific programs like references tie into broader corporate goals, why integrating with other marketing programs is critical, and tips on how to do so.  Prior to the recording, Bill sent me a few specific questions to answer. I jotted down my responses and — while the radio show took some interesting twists and turns as questions blended into discussion — I thought I would share my thoughts with you through this blog post.  Enjoy the questions and the answers I prepared:

Q. Forrester is taking a substantial interest in this area of marketing: customer engagement. Why so? Why now?

We are really excited about researching customer engagement for three reasons–

1) The Groundswell: We see a major shift of power in the vendor-buyer relationship from seller to the buyer. We see buyers turning to each other increasingly, and to social sources of information, to inform their business purchase decisions. Marketers need a way to not only tap into that activity and learn from it, but they also need a way of figuring out who are the new influencers, and ways to measure the value that comes from these social interactions. Engagement helps do that.

2) We think that business marketing – particularly in high technology — has gone astray. We marketers tend to worry more about marketing mix and execution than what happens to customers after the deal closes. But because studies show that it costs 1/6th to 1/10th as much to retain an existing customer than to acquire a new one, we think that this myopic focus on the front of the pipeline is upside down. Focusing on how to increase and strengthen customer engagement helps turn things around.

3) Classic marketing metrics don’t capture all the value of ongoing customer relationships. Sometimes customers who, relative to others, don’t buy a lot from you are incredibly valuable because of the way they influence others, advocate on behalf of your company, and support the broader customer community.  Looking at engagement helps to capture this value in a meaningful way.
Q. We’re seeing a major shift in the ability of customers to get information directly from each other – without going through vendors. Is this the most important development in this area to you? How is that going to impact B2B businesses?

Agreed, we see this same shift. We use the term Groundswell to refer to that shift and it’s as big a shift – if not bigger — as the one we saw with the early stages of the Internet.

Profound impact on B2B businesses, but not in the way we see today.  From a B2B marketing perspective, the majority of the activity around these social interactions today is still one-way.  Marketers experiment with social media but treat it like old media – another way to get their message out in front of an audience. The novelty of social activities – like Facebook fan pages, Linkedin groups, Twitter and YouTube – create a lot of interest here today, but marketers – and executives — are beginning to question the return on this activity.

We believe that the real impact of this shift in customer behavior will happen – not at the front of the marketing funnel, where it is concentrated today, BUT at the opposite end. Social activity will allow customers to band together into communities of interest to not only solve problems and find more creative ways to use products and services, but to provide direction and innovation to the firms who supply those products and services.  Smart marketers will work now to tap into this social behavior, engage customers’ participation, and encourage customers to advocate – openly and transparently – on their behalf to the community.

Q. How do you measure the success of your customer engagement efforts, with these new realities?

This is a problem most B2B marketers struggle with right now, and I can’t say that we’ve cracked the case.  To help, however, Forrester introduced a model for measuring engagement that we call “the Four I’s.” We see engagement defined as the deep connection a company creates with its customers that drives purchase decisions, interaction, and participation over time. It’s measured by the level of involvement, interaction, intimacy, and influence with the brand over time.

Q. How will customer reference programs adapt to the new realities?

I think the scope of customer reference programs will increase from meeting tactical goals – like percentage of customer base that is referenceable – and service levels with sales TO providing direct and tangible value to the customers who choose to give references. Right now a lot of customer reference participation is driven by good will. I think customer reference programs need to give back more value than recognition and appreciation without sacrificing social currency — things like trust and credibility — that make for good references. This is where the social groundswell and community building come in.

While I don’t think customer reference managers will lead the charge into social media, they must participate because their perspective – “here are our most valuable customer advocates and what can we give back to them?” is so important to shifting the focus in marketing from campaigns and leads to ongoing customer relationships.

Q. What are your thoughts on the ability of firms to meaningfully engage with senior level decision making customers?

I think many firms over-estimate their ability to engage with and sell to the C-level suite. Just by putting marketing materials together that say we are going to be more engaged at the strategic level doesn’t make it a reality.

It reminds me of this quote I use to kick off the conversation I often have with Forrester clients about the value of  product positioning. It is part of Forrester lore and reportedly said by a frustrated CIO to a very large software vendor at that vendor’s customer summit.  He said:

“If you call yourself a ‘Strategic Business Partner’ one more time, I’m going to throw you out of your own building. You are not a strategic partner to my business just because your marketing department gave you slides that say you are. You are a vendor, selling us technology, and until you tell me exactly what business value you bring to my business, that’s all you’ll ever be to us.”

It’s a harsh statement, but I think it brings into sharp focus the problems that happen when marketing focuses too much on message, communication, and channel and loses touch with what customers really value – which is a problem-solving relationship that has commercial benefit to both parties.

Engaging with senior level decision makers takes time and skill to develop. You don’t send your sales rep straight in with a marriage proposal, you have to date – woo them with the equivalent of candlelight dinners.  In real terms, that means giving senior decision makers – and their influencers and information collectors – relevant, timely reasons to engage with you. It means useful, usable information and experiences that satisfy their needs, motivations or aspirations. And the degree to which you can foster this kind of relationship with customers on THEIR terms, not on yours, will mean the difference between success and failure at engaging at the senior level.

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