In today’s highly competitive and global environment, companies already work hard to distinguish themselves from one another. Simply convincing consumers to purchase their main product is no longer sufficient, according to The Connected Consumer, Affinion’s research.
To create high levels of engagement, companies must increase their reach into their customers’ lives, says the report. “The businesses that successfully achieve this can build an engaged core of loyal customers who become the brand’s biggest advocates.”
Finding the right mix of products and channels, at the right moment for the customer, is the greatest challenge companies’ face for customer engagement.
According to KPMG’s Now or never: 2016 Global CEO Outlook survey, almost 90% of CEOs list customer loyalty as their top priority. In order to achieve their goal, however, companies must first gain customer engagement, which is an essential step on the path to loyalty.
Emotionally connected customers more engaged
There are many reasons why a business should seek customer engagement and, ultimately, loyalty. According to Alan Zorfas and Daniel Leemon, “emotionally connected customers are more than twice as valuable as highly satisfied customers” to a company. They:
The results of The Connected Consumer point in the same direction. After analysing the factors that lead to advocacy, it found that as “the customer moves towards recommendation, emotional elements play a much more significant role.”
This might explain why “more than half of the advocates choose to do business with a company because their friends and family use it,” which can create a lucrative trickle effect.
These customers also have some of the highest scores on the Customer Engagement Index. The index measures the impact of rational and emotional factors on a customer’s level of engagement and loyalty towards a company.
Putting loyalty on its head
Many companies have been seeking customer loyalty for years with mediocre results so what can they do differently? Some CEOs argue it’s time to rethink the way they look at the problem, which is normally viewed as an issue with customers.
Instead, he says, they should focus on the fact that companies are the ones that are “too slow to understand the signals customers are sending in data and social media”.
One of the key findings of The Connected Consumer is that the best way for a company to obtain engagement is to integrate into the lives of customers and add touchpoints where they matter most.
The more, the merrier
According to KPMG’s Now or never survey:
Number and type of products is key factor in engagement
Finding the right mix of products and channels can be a challenge in a fast-evolving environment. This can, in turn, have significant ramifications on a company’s success, according to The Connected Consumer.
The report found a strong correlation between the number and type of products and channels used by a customer and their level of engagement towards a company.
Results show customers who only use a provider’s core offering score between 6% and 8% below average on the Customer Engagement Index. However, the score starts increasing as customers adopt additional products. This is especially true when these products provide them with peace of mind (+9%) or offer them assistance and protection (+13%).
“Additional products and services such as travel services or credit score improvement help customers get more out of life”. Customers who hold these services represent the highest scores across all three industries (banking, retail, and telcos) surveyed.
Mix of traditional and digital channels offers best results
This is also true of channels. When interactions are multiplied across several channels, a mutually beneficial relationship is created, says Accenture’s Seamless Lifestyle Experiences: Moving from transactional moments to top of mind report. As a result, businesses “will have an advantage over competitors by always being at the top of their customer’s mind.”
The Connected Consumer found that a mix of traditional and digital channels yields the highest engagement scores.
Traditional channels can include in-store or in-branch interactions, as well as the telephone. Digital channels can include websites, apps, and social media.
Interestingly, although websites are used extensively, they have average scores on the index. This is in comparison to social media and apps that score the highest but have the lowest usage.
Ultimately, the report recommends that companies choose their channels carefully in order to reach the right consumers.
It’s clear that companies can benefit from increasing their reach into their customers’ lives but how should they go about doing that? Should they simply multiply the number of products and channels? Each industry is different but in general, consumers don’t just want more products and channels; they want the right ones, at the right time.
Focus should be on solutions that connect emotionally
Companies able to craft solutions, rather than products, that resonate with consumers and fit into their daily lives can win big. “The customer ceases to see the business as the product provider, and instead sees it as an ally in achieving his lifestyle,” points out Accenture’s report.
The New Science of Customer Emotions cites many examples of companies that greatly benefitted from designing products that connected with customers emotionally and led to engagement.
One of the products they mention is a credit card specifically aimed at Millennials’ core beliefs. The company focused on some of their key daily concerns such as “caring for the environment” and “being their own person” to trigger engagement. This approach led to the company being handsomely rewarded with a 70% increase in credit card use and 40% rise in the number of new accounts in that age group.
Products must evolve with consumers
The New Science survey also shows that in order to succeed, products must be constantly re-evaluated and evolve along with the changes inherent in people’s lives.
In the banking sector, for example, a customer might initially be interested in a provider that gives them a sense of security. But they might eventually require products that help them ensure their future.
In the telco industry, some customers might be more interested in data and roaming fees initially only to become more focused on cyber security, as their children get older.
Ultimately, the key, according to Affinion’s report, is to anticipate consumers’ needs and be there at the right moment to offer the right products.
This can only be achieved by “embracing an emotional-connection strategy. Requiring deep customer insights, analytical capabilities, and, above all, a managerial commitment to align the organisation with the new way of thinking,” says the New Science survey.
Customer engagement through partnership
Experts agree that to build a strong and lasting bond with their customers, one that leads to loyalty and advocacy, companies must become meaningful partners in their everyday lives. This is one of the main recommendations of The Connected Consumer report.
Customer engagement can happen when a company creates products and channels that help customers accomplish their daily tasks more easily and help them stay true to their principles and expectations of themselves.
In the end, the “number of products and services a customer buys, how frequently the company “speaks” with the customer all add to the depth of the relationship,” that is developed between a company and its customers, found The Connected Consumer.”