1.4th Annual Online Customer Engagement Survey Report 2010

2. 4th Annual Online Customer Engagement Survey Report 2010 3. 4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 Econsultancys reports, events, onlinethe Peer Summit, roundtables, briefings and cScape is an award-winning, full service digital CIMs Course Director for Social Media, as part resources and training help an internationala range of social events. agency that ranked number 14 in NMAs design of its exceptionally qualified team. community of more than 80,000 digital and build 2009 top 100 poll. Based in the UK marketers make better decisions, buildEconsultancy also runs the prestigiousbut operating internationally, cScape is part of Weve won multiple awards for our information business cases, find the best suppliers, look Innovation Awards where pioneering work the AIM-listed cScape Group Limited whicharchitecture, user experience and creative smart in meetings and accelerate their careers. carried out in the world of digital marketing has over 110 staff. We offer digital marketing/work. In addition, cScape is technically strong and e-commerce is judged by an internationalcustomer engagement campaign strategy, across the board, with particular expertise Econsultancy, which has offices in London panel of experts from companies themselvesplanning, management and training (including in Microsoft SharePoint technologies, and New York, is an award-winning onlineknown for innovation. social media governance); graphic design and holding Gold Partner status with a Microsoft publisher of reports covering best practice,rich media services including app developmentMost Valuable Professional as our Chief user experience benchmarking, market data,The Econsultancy site now attracts 175,000 Technical Officer. unique users per month where they accessand video, and technical health checks/build trends and innovation, and supplier selection.(intranet, extranet, website and mobile) for Econsultancy is an invaluable resource forresearch, read the blog and take part in Weve an exciting programme of events discussions in the forums. And as a portal to customers such as Aviva, Sony, Barclays, the planned for 2010 and hope you will be able internet professionals who want practical British Council, ExxonMobil, Tesco, Carbon advice on all aspects of e-business.the digital marketing community, Econsultancyto join us. For more information about these members can also link up with other members Trust and the Chartered Institute of Personnel events, cScapes CEU and other services Econsultancy also operates a highly popular and digital suppliers through the directories,and Development. contact Theresa Clifford: t.clifford@cscape. training division, used by some of the worldsas well as find a new job or new digital talent We practice what we preach in terms of com. most prominent brands for staff education,using the job listings. engaging our own clients, many of whom have both in-house and via public courses. Some of Econsultancys members include: retained cScape to help them with their digitalFind out more about cScape: Econsultancy provides training across all marketing for many years. So what made these Google, Yahoo, Dell, BBC, BT, Shell, Vodafone,www.cscape.com areas of digital marketing and at all levelscustomers choose us? The main reason cited Yell.com, Oxfam, Virgin Atlantic, Barclays, www.customer-engagement.net from one-day courses to an MSc in Digital is our unique blend of strategic, technical and Marketing.Carphone Warehouse, IPC Media, Deloitte, T-Mobile and Este Lauder.creative services, combined with our ability toFollow us on Twitter: In addition, Econsultancy hosts more than 100 draw on multi-disciplined engagement experts @cscape conferences and events a year, including theJoin Econsultancy today to learn whats from around the globe. @cscapeCEU Online Marketing Masterclasses, the annualhappening in digital marketing and what works. Call us to find out more on +44 (0)20Our Customer Engagement Unit (CEU) countsJoin the debate: Future of Digital Marketing Conference, Dr Dave Chaffey, recognised by the Chartered 7269 1450 (London) or +1 212 699 3626www.customer-engagement-network.com (New York). You can also contact us online. Institute of Marketing (CIM) as one of the 50 marketing gurus worldwide that have shaped www.econsultancy.comdigital marketing, and Richard Sedley, the2 4. 4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 20104th Annual Online Customer Engagement Report 2010 3 Introduction 4Comments on the findingsExecutive summary and highlights7 Andy Beal 13 Ron Shevlin, Monica Hart 14 Methodology and sample 9 Dr Dave Chaffey 17 Findings 12 Rob Killick, BJ Cook, Guy Stephens 18 Customer engagement strategy 12 Linus Gregoriadis19Importance of customer engagement to the organisation 12 BJ Fogg20Interest in online customer engagement12 Adam Hibbert, Amanda Davie 25Attributes of an engaged customer 15 Theresa Clifford, Paul Blunden 26Success of customer engagement strategy 16 Jay Cooper 29 Tactics, behaviours and attitudes16 Jim Sterne, Pete Mortensen 30Improving customer engagement 16 Rich Wand, Bruno Ancona Lopes 31Investment to drive increased customer engagement 20 Eric T. Peterson 33Changing behaviour and attitudes20 Hugh Gage, Janet Grimes34 Enterprise 2.0 22 Martha Russell, Ian Jindal 35Adoption of technology for product development and innovation 22 Clare OBrien, David Dodd36Adoption of technology for internal (employee) communications 23 Marc Sibley, Aurlie Pols37Adoption of technology for customer service improvement 23 Zia Zareem-Slade, Steven Woods 38Resourcing social media and customer engagement 23 Stphane Hamel, Lucy Conlan39Barriers to cultivating customer engagement 27 Becky Caroll, Richard Sedley 40 Mobile 28Investing in the mobile channel 28 Survey partners41Mobile and customer engagement strategy 28Using mobile marketing to build engagement29Barriers to a more focused approach to mobile 30 Mapping and measurement323 5. 4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010The definition of customer engagement: Repeated interactions that strengthen the emotional, psychological or physicalinvestment a customer has in a brand (product or company).Introduction Welcome to the 2010 Online CustomerPredictably the big winners in this report customer service and employee engagement, So it is slightly surprising that the number Engagement Survey Report. Now in its are social media and micro-blogging toolsall areas of increasing importance to customerof companies planning to step into mobile Organisations fourth year, this annual report has become like Twitter. These are the technologies engagement. customer engagement is not larger. to need focus on a regular benchmark for organisationsthat companies see as worthy of increasedquality, simplicity wanting to assess their customer engagementattention and financial investment. If 2009 wasIf I were to make any recommendations based More than any other channel, mobile has and customeron the results in this years report it would be strategies. With over 1,000 participants the the year that saw the main-streaming of many the ability to connect emotionally with us. service in the next that organisations need to focus on quality,The mobile phone is omnipresent and highly survey continues to be the largest of its type of these social technologies, then 2010 will be12 months. anywhere in the world. Indeed this year thethe year that social technologies get serious. simplicity and customer service in the next personal I spend more time with mine than survey gained the largest number of non-UK This will manifest itself not only in terms of 12 months. These are three key areas that can I do my family. This poses both challenges participants in its history. marketing investment, but also in the wayfoster an understanding of value and emotionaland opportunities in equal measure. Whilethey begin to impact the internal structure andconnection within the customer. 2010 appears to be the year when many more The number of you who consider customerculture of organisations both large and small. organisations are preparing to get their toes engagement essential to your organisation Since the conception of this survey we have wet with mobile, it appears most are waiting continues to grow slightly, but what I feelThe reorganisation required to take advantagestressed the importance of an emotional for someone else to start swimming. If thats this years survey reveals best is the extent to of these social technologies should not be connection as part of engagement our you, youll probably have a healthy lead by the which the last 12 months have changed howunderestimated. It is worth recognising that the definition has it at its heart (see above) and time the others dive in. we will do business in the future. In many introduction of these tools is unprecedented.this has never been more important than today. ways this was to be expected. The worldTechnologies like fax, email and the telephone Indeed strengthening emotional investment in What the 4th Annual Online Customer has just experienced the toughest economic had all first established themselves (andyour brand showed the biggest year on year Engagement Report reveals to me is that we environment since the 1930s and any companytheir associated behaviours) within business increase of all the reasons why organisations find ourselves firmly placed in an interregnum not looking to change the way they operate isbefore making their way into society asare interested in customer engagement. a period between the close of one era of likely to be suffering the consequences already. a whole. Today we are seeing the reverse business and the opening of another. This isnt Underlying much of this years results isas enterprises struggle to adjust and embracesomething created by the current troubled But how to change and into what, have beenan expressed desire to get closer to ourthe pre-established attitudes and behaviours ofeconomy but what our economic woes have the hardest questions for most organisations. customers, to understand them better and tocustomers and employees while trying to bringdone is focus our attention on the changes become a more integral part of their lives.these social tools in-house. happening. This year weve added a new section to the While customer engagement is no panaceareport entitled Enterprise 2.0. This touches onfor a troubled economy, or changes within theissues of product development and innovation, 4 6. 4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 business environment, what it does offer is It just remains for me to thank all those whove grounding an opportunity to stabilise and continued to help make this a successful reap the benefits of increased predictability report. in our customer relationships. As I wrote back in 2006 in the introduction to the first To all those who took the time to complete of these surveys; customer engagementthis, the longest survey to date, we salute you. is the best measure of current and future Thanks to Linus and Aliya at Econsultancy performance; an engaged relationship is great job guys. To our partners who promoted probably the only guarantee for a returnthe survey around the globe, particularly on your organisations or your clients Bruno. To our report contributors over objectives.30 experts this year thanks for sharing your time and intellect. And finally to my colleagues There are many interesting observations at cScape: Monica, Theresa, Sal, Sarah A and insight within this report, probablyand Rob. With the latest set of results we can more than any previous report wesee the clear, common benefits that have produced. I really do hope you find it useful and stimulating, and look engagement can offer Richard Sedley forward to any feedback you carecScape Customer Engagement Director Dr Dave Chaffey, p17 to share. E: r.sedley@cscape.com T: @richardsedley 5 7. Executive summary and highlights6 8. 4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 Executive summary and highlights This is our fourth annual Customer Engagement Report. There were Thetacticswhichhavecometotheforefrontfordrivingcustomer Only17%haveprocessesandworkflowsinplacetoencouragestaff more than 1,000 respondents to our research request, which took the engagement are social networking and Twitter activity. Presence use of social media, and only 13% actually incentivise staff to use form of an online survey sent out in October 2009.on social networks has almost doubled from 23% to 44%, while thesocial media to engage with customers online. percentage of respondents saying that micro-blogging (i.e. Twitter) has tangibly improved customer engagement has, remarkably, gone up MobileThis is a summary of the key findings:five-fold (from 7% to 35%). Alargeproportion(41%)of companiesarenotplanningany Themajorityof companies(61%)saythattheywillincrease investment at all in the mobile channel in 2010, and a further 49% are Customer engagement strategyplanning only limited investment. Only 11% are planning to invest investment in their social network presence and 44% will spend more Theproportionof companyrespondentswhoregardcustomeron micro-blogging.significantly but this increases significantly for the largest companies.engagement as essential for their organisation has increased to 55%, Whenitcomestobuildingcustomerengagement,companieshaveup from 52% in 2008 and 50% in 2007. The number of agency Intolerance of poor customer service is the type of behaviour or attitude that company respondents are most likely to expect to increase over been quickest to use the mobile channel for increased dialogue withrespondents who regard this as essential for their clients has jumpedcustomers. A fifth of company respondents say they are doing this andsignificantly from 43% to 55%. the next year. Well over half of respondents (61%) say that they expect people to become less tolerant about poor service, and this percentagea further 36% say they plan to do this. Customerengagementisseenasbeingaboutcreatingrelationships has almost doubled since last year. Athird(34%)of companiesareplanningtocreateapplicationsforwhich result in value both for customers and for companies.mobile phones, in addition to the 16% who say they already do this.Company respondents are most likely to indicate that increasing Enterprise 2.0long term customer value (37%) and increasing value delivered to the Justoverathirdof organisations(36%)saytheyareusingsocial Nearlytwothirdsof companies(62%)havenoplansformobilecustomer (35%) describe their interest in customer engagement most networks and email newsletters for product development andcommerce. Only 10% of companies are using transactional mobileappropriately. innovation but only a quarter (25%) of companies tap into user ratingsactivity to build customer engagement. A further 28% are planning to and feedback. Even fewer (17%) are using discussion forums to feeddo this. Thebiggestareaof increasedinterestsincelastyearisinstrengtheningemotional investment in your brand. The percentage of respondentsinto development. Companieswhoareeitherusingorplanningtousemobileaspartsaying their interest in customer engagement relates to this has Manycompaniesarealsoneglectingtoshareinformationinternally.of their customer lifecycle marketing, for broader CRM, for user-jumped from 25% last year to 31%.Very small percentages of respondents are using employee blogging generated content or location-based marketing are also in the minority. Comparedtolastyear,respondentsreportincreased participation in (17%), internal social networking tools (13%), intranets (10%) or social Companiesgenerallyattributetheirinertiawhenitcomestoonline communities or support groups (+9%), giving regular feedbackknowledge sharing (8%) to help drive development and innovation.integrating mobile to a lack of resources (51%), although there are(+8%) and participation in innovation and design (+7%). Marketers are Emailnewslettersandinternalsocialnetworkingareusedbyaroundaother widely cited reasons including lack of skills/experience/benefiting more from the relationship-building aspects of customer third of companies (32%) for internal communications. understanding and lack of business case.engagement rather than being exclusively focused on the more directlyfinancial benefits such as sales. Theincreasedprofileof socialmediaisalsoreflectedbythefactthata Mapping and measurement third (34%) of companies have increased their social media budget in Webanalyticsplayapivotalroleingatheringintelligence,withover Tactics, behaviour and attitudesthe last 12 months. half of companies surveyed (51%) saying this is useful for online Aswasthecaselastyear,emailnewslettersarethetacticmostlikely Companieswhourgetheirstaff toengagewithsocialmediaarestillengagement.to have resulted in a tangible improvement to an organisations online very much in the minority. Some 29% say senior staff members arecustomer engagement. Two thirds of respondents (67%) indicate that Despitethegrowingawarenessaroundsocialmediametricsand urged to use social media to build customer dialogue, while a fifth measurement, only a fifth of companies (21%) say buzz monitoring isregular email bulletins have had a positive effect, down very slightly (19%) say this applies to junior staff.from 69% a year ago. useful for engaging customers online.7 9. 4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010Mobile is a healthy media, yielding good results for those who know how to use it. Jay Cooper, p29 Methodology and sample8 10. 4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 Methodology and sampleMethodologyFigure 1 Figure 3Which of the following best describes your job role? All respondents: In which business sector is your organisation? This is our fourth annual Customer Base all respondents (1198) Engagement Report. Over 1,000 respondents 20 Fina took part in an online survey conducted over 33% of respondentsPart of an in-house team a five week period from October 2009*. are client-side,(client-side) 33%Ret Econsultancy and cScape promoted thewhile 55% are External agency / supplier survey via Twitter, Linkedin, Email newsletters agency-side./ consultant 55%Pub and other channels. The incentive for takingOther 12% 15 part was access to a complimentary copyTrav of the report just before its publication on Econsultancy.Tele cScape and Econsultancy would like to thankCha 10 those who took the time to complete the20 Financial services: 16% questionnaire. If you have any questions about Ent the research, please email Econsultancys Retail: 10% Research Director, Linus Gregoriadis (Linus@Publishing: 8% Pub econsultancy.com). Figure 215 5 Travel: 7%ConWhat is your annual company turnover? Respondent profiles Telecoms / Mobile phones: 6% 10 Charity: 6%Oth The vast majority of survey respondents work 5050Companies Companies Entertainment: 4% either for in-house teams (i.e. client-sidePro organisations), or for external agencies 42% 42%Agencies Agencies 0 Public Sector: 4% (including consultants and technology4040 5 Consultancy / Marketing Services: 4% Hea suppliers). A third (33%) of respondents work20Financial services: 16%Other manufacturing: 3% client-side, while just over half (55%) areAut3028% agency-side. 30 27% 28%Retail: 10%Property: 2%27%0Publishing: 8% Healthcare: 2% FMC For the purposes of this report, we have 15 carried out separate analysis for both these 2018% 18% Travel: 7% Automotive: 1%20 18% 18%Gam groups and the distinction is abbreviated14% Telecoms / Mobile phones: 6% FMCG / CPG: 1% to companies (including not-for-profit 14%109% 10%10Charity: 6%Gaming: 0% Pha organisations) and agencies.9% 10%7%10Entertainment: 4%Pharmaceuticals: 0% 3%7% Util In total, 401 company respondents took Public Sector: 4%Utilities / Energy: 0%0 3% part in the survey, compared to 657 agency< 1m 1-10m 10-50m 50-150m 5>150m Consultancy / Marketing Services: 4% participants. Company respondents were 0< 1m1-10m10-50m 50-150m>150mOther manufacturing: 3% asked to comment in respect of their ownProperty: 2% 0 * Clicktools was used for the survey. 9Healthcare: 2% Automotive: 1% 11. 4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 organisations, while agencies were typically Figure 4 Figure 5 asked to comment in terms of a typical client. What types of business have you focused on in the last Company: In which country are you (personally) based?12 months? Annual company turnover Figure 2 shows the range in the size of6058%UK 71% Companies participating organisations, as defined byEurope (outside UK) 6% company turnover. Approximately a third of52% 58% Agencies60 North America 9%Respondents are Companies respondents (32%) work for companies with50spread across52%Agencies Other 13% annual revenues of 10 million or less.numerous50 Over half of companies (56%) taking part havebusiness sectors or 40 a turnover of more than 10 million, of whichverticals, reflecting 40the universal31% more than a quarter of respondents (28%) 30 work for companies with a turnover in excessimportance31%of customer 3022% of 150 million. 20%engagement. 20 18%22%20% Agency respondents typically work for smaller2018% organisations. Some 42% of responding10 agencies have a turnover below 1 million. 10Business sector 00Figure 6 Mainly B2BMainly B2B Mainly B2C Mainly B2C Both B2B and andBoth B2B Agency: In which country are you (personally) based? Respondents are spread across numerousB2C equally B2C equally business sectors or verticals, reflecting the universal importance of customer UK 51% engagement. The best represented sectors are Europe (outside UK) 11% financial services (16%), retail (10%), publishing (8%) and travel (7%).Geography North America 10%Other 29%The majority of respondents (71%) in this survey are UK-based, but this Business focus is very much a global survey. Some 9% of respondents are located inNorth America, and 6% are based in mainland Europe. The majority of companies in this survey (52%) are B2C-focused businesses, whilst 58% ofOther countries or regions represented include Brazil, India, Australia, agencies have a B2C focus. Just under a thirdand South-East Asia. of companies (31%) and a fifth of agencies (20%) have a B2B focus.Half of the agency respondents are based in the UK (51%), witha higher proportion of respondents (29%) coming from the US, Europeand beyond. 10 12. 4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 Findings11 13. 4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010Findings Customer engagement strategyInterest in online customer engagement Figure 8 Company: Which of the following best describes your organisations interest in onlineAs was the case last year, it is clear thatImportance of customer engagementcustomer engagement?customer engagement is seen as being aboutThe proportion of company respondents who creating relationships which result in value 40 40 Increasing long-term customercustomer value:Increasing long-term value: 37% 37%regard customer engagement as essential both for customers and for organisations. Increasing value delivered to the customer: 35%Increasing value delivered to the customer: 35%The biggest shift35 35for their organisations has increased to 55%,since last year Company respondents are most likelyDeepening and enriching your product or service offering: 31%up from 52% in 2009 and 50% in 2008. More 30Deepening and enriching your product or service offering: 3is the emphasis to indicate that increasing long-term30Strengthening emotional investment in your brand: 31%striking is the significant jump (from 43% to Strengthening emotional investment in your brand: 31%placed on customer value (37%) and increasing value 25 Gaining customer insight: 29%55%) in the number of agency respondentsstrengthening delivered to the customer (35%) describe 25 Gaining customer insight: Increasing market share: 26%29%who regard this as essential for their clients. 20emotional their interest in customer engagement mostThis jump may be because companies are 20 Enhanced public profile: 22%Increasing market share: 26%investment in yourappropriately.15doing a better job of communicating itsReducing acquisition costs: 18%brand.Enhanced public profile: 22%importance to their agencies. The biggest shift since last year is the 1510 Reduced customer service costs: 16%Reducing acquisition costs: 18%emphasis placed on strengthening emotional 5 Increasing short-term conversions: 15% investment in your brand. The percentage 10Adjusting to the increased importance/power 16%Reduced customer service costs: of customer: 9%Figure 7 0of respondents highlighting this factor hasImproving business predictability: 6%Company: How important is customer engagement to your 5 Increasing short-term conversions: 15%jumped from 25% last year to 31%.Improving employee satisfaction: 5%organisation? Adjusting to the increased importance/power of customer: 9 Insulating against a troubled economy: 1%Fewer respondents (18% compared to 21%0Improving business predictability: 6% 100last year) see reduced acquisition costs as Figure 9something which defines their interest in Improving employee satisfaction: 5% Agency: Which of the following best describes your clients interest in online customercustomer engagement. Since the recession80 engagement?Insulating against a troubled economy: 1%took hold, companies have been much morefocused on customer retention, rather than on356035Increasing long-term customercustomer value: Increasing long-term value: 30%30%acquisition.Increasing value delivered to the customer: 30% Increasing value delivered to the customer: 30%30 30According to agencies, the most significant Deepening and enriching your product or service offering: 21%40 Deepening and enriching your product or service offering: 21factor driving client interest in customer25Strengthening emotional investment in your brand: 31%engagement is gaining customer insight,25Strengthening emotional investment in your brand: 31%Gaining customer insight: 34%20mentioned by a third (34%) of respondents.20 Gaining customer insight:Increasing market share: 24% 34%Agencies also report an increased focus (+9%)2015Enhanced public profile: 22% Increasing market share: 24% 0on strengthening emotional investment.20102009 2008 Reducing acquisition costs: 18% 15 10 Enhanced public profile: 22% 2008Supply-side respondents have also seen more Reduced customer service costs: 16%Notinterest driven by the increased importance NotEssential Important Nice-to-have important 5 Reducing acquisition costs: 18%Increasing short-term conversions: 23% Essential Important Nice-to-have 10 important 201055%and power of the customer. The proportion of33% 11%1% Adjusting to the increased importance/power16% Reduced customer service costs: of customer: 21% 02010 55% 33% 11%1% 200952%agency 35%respondents who say this is a primary11%1% Improving business predictability: 6%2009 52% 35% 11%1% 5 Increasing short-term conversions: 23% 200850%driver of interest has increased from 11% last41% 8% 1% Improving employee satisfaction: 5%2008 50% 41% 8% 1%year to 20%. Adjusting to the increased importance/power of customer: 2Insulating against a troubled economy: 5% 0 Improving business predictability: 6% 12 Improving employee satisfaction: 5%Insulating against a troubled economy: 5% 14. COMMENT Figure 10 increasing their focus on social networks, whileAndy Beal Company: Interest in online customer engagement difference between 2010 agencies are even more bullish, expecting their and 2009 resultsclients to spend more on social networking (66%) than even email newsletters (41%).66 Increasing long-term customercustomer value:Increasing long-term value: -1% -1% 5 Increasing value delivered to the customer: 1% Perhaps the most stunning statistic is the5 Increasing value delivered to the customer: 1% percentage of companies that plan to invest in 4 Deepening and enriching your product or service offering: 2%4 Deepening and enriching your product or service offering: 2% Twitter as a channel for customer engagement. Strengthening emotional investment in your brand: 6% 3Strengthening emotional investment in your brand: 6% In last years report, Twitter barely registered3Gaining customer insight: 0% 2Gaining customer insight: Increasing market share: 1% 0%Twitter and Facebook steal with survey participants with just 7% of companies realizing improved customer21 Enhanced public profile: 2%Increasing market share: 1% the spotlight from email engagement from Twitter, hence only 13% 0 Reducing acquisition costs: -3% planned to invest in Twitter in 2009. What1 Enhanced public profile: 2% The 2nd Customer Engagement Survey saw -1Reduced customer service costs: -2% a difference a year makes! Twitter has seen0 Reducing acquisition costs: -3% businesses focusing their efforts on using email -2 Increasing short-term conversions: -1%massive growth and companies are scramblingnewsletters to improve customer engagement. -1Adjusting to the increased importance/power-2%Reduced customer service costs: of customer: -1% to make the micro-blogging channel a key part -3 An incredible 69% of companies stated that Improving business predictability: 0% of their customer engagement efforts. In fact,Increasing short-term conversions: -1%they had measured a tangible improvement -2Improving employee satisfaction: -1%with 35% of companies seeing an improvementAdjusting to the increased importance/power of customer: -1%through their e-newsletter campaigns so Insulating against a troubled economy: 0% in their customer engagement from Twitter -3 Since the it was not a surprise that 59% planned toImproving business predictability: 0%in 2009, almost 44% of companies plan torecession tookinvest heavily in email marketing by the time Figure 11 increase their investment in Twitter in 2010.Improving employee satisfaction: -1%hold, companies we came to the third survey. By contrast, Agency: Interest in online customer engagement difference between 2010Thats a three-fold improvement over last year!have been muchinvestment in social networks such as and 2009 results Insulating against a troubled economy: 0%more focused on Facebook was down on the list of prioritiesWhat conclusions can we draw from this? Well, 10 customer retention, with only 36% of companies planning to its apparent that companies are realising that 10Increasing long-term customercustomer value: -2% Increasing long-term value: -2%rather than onincrease their investment in that area.customers expect engagement to be a two-way 88Increasing value delivered to the customer: 2% acquisition. Increasing value delivered to the customer: 2%dialogue. Email newsletters are a great waySo, what happened now we are on survey Deepening and enriching your product or service offering: -1%Deepening and enriching your product or service offering: -1% to keep customers updated but they dont6 four and looking at 2010? Those that took a6Strengthening emotional investment in your brand: 9%really engage them. Instead, companies areStrengthening emotional investment in your brand: 9%chance and invested in social networks saw a4Gaining customer insight: 2%seeing measurable benefits of actually having4 big return on investment. For companies, email2 Gaining customer insight: Increasing market share: -5%2%a conversation with their customers be it vianewsletters still rated as the tactic offering Enhanced public profile: -3%Facebook, Twitter or whatever, making them2 0 Increasing market share: -5%the highest tangible improvement (67%) but a Reducing acquisition costs: -3% willing to invest more of their marketing/PREnhanced public profile: -3%whopping 44% almost double the percentage -2Reduced customer service costs: -3% budgets to reap the fruits of that engagement.0 from 2009 have discovered that socialReducing acquisition costs: -3% Increasing short-term conversions: -3% networks helped increase their online customer -4Andy is the CEO of Trackur, a powerful, yet -2Adjusting to the increased importance/power -3%Reduced customer service costs: of customer: 9% engagement. That return on investment hasaffordable, social media monitoring solution. With -6 Improving business predictability: -2% clearly caught the attention of both companies over 10 years of internet marketing experience, -4 Increasing short-term conversions: -3% Improving employee satisfaction: 1%and their agencies. In 2010, the survey predicts Andy specialises in online reputation managementAdjusting to the increased importance/power of customer: 9% that 61% of company executives will be and is the co-author of Radically Transparent. Insulating against a troubled economy: -1% -6Improving business predictability: -2%Improving employee satisfaction: 1% 13Insulating against a troubled economy: -1% 15. COMMENT The message is clear; engaging customers around the world is key and it is not just about translating copy. like Twitter and Facebook strengthens the behaving like good international citizens. ForRon Shevlinrole of email from a both a personal and Monica Hart example, Citroen recently ran an online advert business perspective. With alternative meansin Spain showing Mao, which was extensively of communicating, email can and should(often negatively) blogged about and was be used for the messages that are mostpulled down due to Chinese disapproval (China appropriate to the channel. being a big potential market for Citroen). Japan, a nation where relationships are key The range of tools used for customer andto business, has also committed expensive employee engagement prove that the critical cross-cultural marketing faux pas, ironically inWords of wisdom from task for marketers in the next few years will Its a big virtual worldNorth America. Panasonics US Touch Woody be one of right channelling determining The Internet Pecker campaign for a newMonty Python which are the right messages for each of theAlthough this years Customer Engagement PC received the wrong kind of publicity and many channels (and tools) marketers have to Survey is internationally focused, itsIn an article titled Why Email No Longerhad to be withdrawn when the Touch Woodys communicate through.interesting to count the number of referencesRules, the Wall Street Journal recently opinedPecker slogan spread virally. to Facebook and Twitter from contributors.that email has had a good run as king of Emails reign is communications. But its reign is over. In The critical task for marketers The key to engagement lies in relevance The message is clear; engaging customers to the consumer. In many places, including over?its place, a new generation of services is in the next few years will be around the world is key and it is not just about geographies with GDPs that are growingtranslating copy. Campaigns must embrace the Its reign overstarting to take hold services like Twitterone of right channelling what? as quickly as social network usage such associal nuance of separate markets. This meansand Facebook and countless others vying forChina, the major US and UK social networksincluding the use of appropriate channels fora piece of the new world. In addition, the results of this years surveybarely capture market share. Believe it orexample, vkontakte.ru, smortri.ru, moikrug. demonstrate that marketers must take a broad, not, Facebook and Twitter do not rule theEmails reign is over? Its reign over what? ru and liverjournal.ru instead of Facebook in multi-channel view of customer engagement.world. And if you are doing business with anOver inane, mindless, useless, idiotic, time-Russia (currently the worlds largest user of Simply focusing on time spent viewing ads international audience, you wont either unlesswasting messages like thx, or k, and got it? social networks) and mobile for geographies or web pages will mean that we will missyou think about cultural and linguistic specifics like Africa where PC usage is comparativelyThe results of the 2010 Customer Engagementthe other behaviours and dimensions thatwhen planning your engagement campaigns.low. Culturally tailored, sensitive imagerySurvey recall the words of Monty Pythoncharacterise strong customer relationships. One size most certainly does not fit all. and rich media, appropriate inter-personalfrom their movie Monty Python and the Holy communications and the right jargon or slang Ron is a senior analyst at Aite Group, LLC. I cut my marketing teeth arguing withGrail. In the scene where someone is walking all help as well. You may argue that it all He specialises in retail banking issues including colleagues in North America about thethrough the town crying bring out yourtakes extra resource (something the survey sales and marketing technologies, customer andrelevance of content to other markets (or lackdead!, one man resists: Im not dead yet. highlights as an issue) but just ask yourself marketing analytics, loyalty management, P2Pof it). This lack of awareness still exists in thisAnd neither is email. While growth has beenif you can really afford not to engage the lending, personal financial management, socialonline age, a fact that is highly ironic givenslower this year than last, email newsletterstremendous buying power of the non-English computing, online banking, customer experiencethat over one third of the North Americanstill reign as the most commonly used agencies speakers who will drive nearly 70% of the and consumer behaviour. audience belongs to an ethnic group. However,and client tool for product development/ worlds economy in 2010?innovation, employee communications andAite Group is a leading independent research andwhile many international marketing gaffs docustomer support improvement.advisory firm focused on business, technology and emanate from the worlds leading economy, Monica is an Account Director at cScape, She has regulatory issues and their impact on the financial some of the most heinous cultural errorsover 20 years of marketing experience workingWhat the Wall Street Journal failed to slip from countries such as France wherewith companies such as Sony, Aviva, BAA, Adobe, services industry.recognise is that the rise of social networksmarketers can actually be fined for not Logica, William Grant & Sons and Getty Images. 14 16. 4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 Attributes of an engaged customerFigure 12Figure 13Company: Which of the following attributes of an engaged customerCompany: Attributes of an engaged customer difference between 2010 and As with last years Customer Engagementhas your organisation benefited from most in the past 12 months? 2009 results Report, we asked which attributes of an engaged customer organsations had50 50 Recommended product, service or service or Recommended product, brand: 42%10brand: 42% 10Recommended product,product, brand:Recommended service or serviceor brand: benefited from in the past 12 months.-16% -16%Participated in online communities or support Participated in online communities or support5groups: 34% 5Participated in online communities or The type of behaviour which is most likely to40 40groups: 34%Participated in online communities support groups: 9%orHas improved feedback regularly: 30%support groups: 9% have helped responding organisations is still Has improved feedback regularly: 30%0 Has provided feedback regularly: 8%Less likely to switch supplier: 25% 0 the recommendation of product, service or 30Less likely to switch supplier: -5%regularly:Has provided feedback8%Converted more readily: 23%supplier:Less likely to switch 25% -5 brand. However, the proportion of companies30 -5 Less likely to switch supplier: Converted more readily: -21%-5% who have seen benefits from this has HasConverted more readily:purchased regularly: 22%23%-10 20Has purchased regularly: -14% decreased from 58% last year to 42%. Participated in innovation and design: 20% Has purchased regularly: 22%Converted more readily: -21%-10-15 Participated in innovation and design: 7%20Less focused on price: 16%Has purchased regularly: -14% There has been an even bigger drop10Participated in innovation and design: 20%Less focused on price: -1%Less reactive to troubled economy: 13% (from 44% to 23%) in the percentage of -15 -20Participated in innovation and Less reactive to troubled economy: 3% design: 7%Less focused on price:More tolerant of mistakes: 9% 16% customers who say that engaged customersMore tolerant of mistakes: 4% Less focused on price:-1%100-25 convert more readily. Similarly, purchasedLess reactive to troubled economy: 13%-20 more readily is down 14% from 36% last Less reactive to troubled economy: 3% More tolerant of mistakes: 9% year to 22%. More tolerant of mistakes: 4% 0-25 The behaviour which has become moreFigure 14Figure 15 prevalent is around participation in onlineAgency: Which of the following attributes of an engaged customer do youAgency: Attributes of an engaged customer difference between 2010 and communities or support groups (+9%), givingfeel your clients will have benefited from most in the past 12 months? 2009 results regular feedback (+8%) and participation in innovation and design (+7%). 6015 60 Recommended product, service or service or Recommended product, brand: 53%brand: 53% 15Recommended product,product, brand:Recommended service or service or brand: -1%-1% Recommendation of products, customer Participated in online communities or support Participated in online communities or support 1010 50 groups: 32%Participated in online communities or conversion and sales remain as important 50 groups: 32%Participated in online communities support groups: 11%or5 as ever to businesses, but marketers Has improved feedback regularly: 29% Has improved feedback regularly: 29% 5 support groups: 11% 40Has provided feedback regularly: 8% are benefiting more from the relationship- Less likely to switch supplier: 29% 040 Less likely to switch supplier: -8%regularly:Has provided feedback8% building aspects of customer engagementConverted more readily: 33%supplier: 29%Less likely to switch 0 30 -5Less likely to switch supplier: Converted more readily: -15%-8% rather than the more direct, financial benefits. HasConverted more readily:purchased regularly: 24%33%30 -5Has purchased regularly: -23%Participated in innovation and design: 17% -10Converted more readily: -15% The recession may have had an impact on the 20Has purchased regularly: 24%Participated in innovation and design: 6%Less focused on price: 23% number of customers recommending and -10 -15Has purchased regularly: -23% Participated in innovation and design: 17%Less reactive to troubled economy: 7% Less focused on price: 5% buying products or services, but this trend20 10 -20Participated in innovation and Less reactive to troubled economy: -1%design: 6%More tolerant of mistakes: 11%23%Less focused on price: also reflects a shift in the perception of what-15 More tolerant of mistakes: 7%0-25 Less focused on price:5% customer engagement is about.10 Less reactive to troubled economy: 7%-20 Less reactive to troubled economy: -1% More tolerant of mistakes: 11% 0-25 More tolerant of mistakes: 7% * Respondents could check up to three options 15 17. 4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 Success of customer engagement strategyTactics, behaviours and attitudesFigure 17 Company: Have any of the following resulted in a tangible improvement in your Encouragingly, almost three-quarters ofTactics for improving customer organisations online customer engagement? responding organisations (71%) say that their customer engagement strategy has been Presence on social engagement 8080 Email newsletters:Email newsletters: 67%67% Personalised messaging on messa Personalised either very successful (8%) or quite successful networks has As was the case last year, email newsletterssite: 11%site: 11% 70 Presence on social networks: networks: Presence on social (63%).almost doubled are the tactic most likely to have resulted in a 70 44% On-site branded communities 44% On-site branded com from 23% to 44%tangible improvement to their organisations 60 Microblogging utilities: 35%/ forums: 11% / forums: 11% This compares to 28% of companies who 60Microblogging utilities: 35% on-page interactiveRichonline customer engagement. Two thirds of On-site video (brand-created): say they have been not very successful or 50 experiences: 10% on-page intera Richrespondents (67%) indicate that regular email 33% On-site video (brand-created): unsuccessful. 50 On-site videoexperiences: 10%(user-created):bulletins have had a positive effect, down very4033%Blogging: 32%10% The supply-side results tell a similar story.slightly from 69% a year ago.40 Focused micro-sites: 27% On-site video (user- 30Blogging: 32%Rich media advertising: 9% 10% The majority of respondents (61%) say theirUser ratings and feedback:Mobile communications: 9%As we noted last year, well-established20 23%Focused micro-sites: 27% clients have been quite successful, which 30Rich media advertisindustry metrics for email marketing (suchSMS service alerts: 9% again suggests there is ample room for10 User-generated content: User ratings and feedback: Mobile communicaas open and click-through rates) mean that17% Desktop-based application improvement.2023%and widgets: 7%marketers can quantify and appreciate the 0 Social knowledge sharing: SMS service alerts: 914%User-generated content: On-site audio: 5%impact of their efforts in this area.1017%Web-based widgets and User on-pageDesktop-based app customisation: Figure 16In a year when social media sites have rarely badges: 11% 3%and widgets: 7%0 Social knowledge sharing: Company: How successful has your organisations customer been out of the news, it is not surprising that 14%On-site audio: 5% engagement strategy (or initiatives) been within the last 12 months? the tactics which have come to the forefront Figure 18for driving customer engagement are social Agency: Have any of the following resulted in a tangible improvementand your clients on-page custo Web-based widgets inUser badges: 11% 3% Very successful: 8%networking and Twitter activity. online customer engagement? Quite successful: 63%After email newsletters, these tactics are now 60 60 Email newsletters: Email newsletters: 60% 60% Personalised messaging on messaginPersonalised Not very successful: 27%seen as having the biggest impact. Presence site: 19% site: 19% Unsuccessful: 1%Presence on social networks:Presence on social networks:on social networks has almost doubled5050 51%On-site branded communities51% On-site branded commfrom 23% to 44%, while the percentage of Microblogging utilities: 39%/ forums: 17%/ forums: 17%respondents saying that micro-blogging40Microblogging utilities: 39% on-page interactive On-site video (brand-created):Richexperiences: 24% on-page interactivRich(i.e. Twitter) has tangibly improved customer4039%On-site video (brand-created):On-site video experiences: 24%(user-created):engagement has, remarkably, gone up 3039% Blogging: 40%12%five-fold (from 7% to 35%).30Focused micro-sites: 31% On-site video (user-creBlogging: 40% Rich media advertising: 18%20 User ratings and feedback:12%Social networking sites have not suddenly32%Focused micro-sites: 31%Mobile communications: 17%Rich media advertisingappeared in the last 12 months but what20 10 User-generated content:SMS service alerts: 12%User ratings and feedback:has changed in that time is the appreciation 29%Mobile communicationDesktop-based application32%by many businesses that social media0Social knowledge sharing:and widgets: 12%SMS service alerts: 12% 10activity represents an excellent opportunity 14%User-generated content: On-site audio: 5%for dialogue with customers and building29% Web-based widgets and User on-page Desktop-based applicacustomisation: badges: 16% 7% and widgets: 12%relationships.0 Social knowledge sharing:14%On-site audio: 5%16 Web-based widgets andUser on-page customisbadges: 16%7% 18. COMMENTFigure 19 themselves well to communities on their Dr DaveCompany: Tangible improvements difference between 2010 and 2009 results own sites, but participation beyond your own Chaffeysite, for example through self-help supportservices like www.getsatisfaction.com should Social media30 30Email newsletters:Email newsletters: -2% -2%Personalised messaging onPersonalised messaging on also be reviewed. activity Presence Presence on social on social networks:site: 1% networks:site: 1%25 represents25 20% 20%On-site branded communitiesOn-site branded communities Feedback participation. an excellent/ forums: -4%20Microblogging utilities: 29%/ forums: -4%30% of companies and 29% of agencies opportunity 20Microblogging utilities: 29%Rich on-page interactiveOn-site video (brand-created):experiences: -6% Rich on-page interactive said they received benefits from regular for dialogue153%experiences: -6% Reviewing opportunities for On-site video (brand-created):customer feedback, for example through with customers15 On-site video (user-created):10 3%Blogging: 7%6% satisfaction surveys, Net Promoter Score and building Focused micro-sites: -3% audience participationOn-site video (user-created):or product feedback (there is some overlap 10Blogging: 7% Rich media advertising: N/A relationships.56%User ratings and feedback: with the first category).0 -7%Focused micro-sites: -3% communications: -1%Mobile In each of the four years of the cScape-5 Rich media advertising: N/ASMS service alerts: -2%User-generated ratings and feedback: Econsultancy customer engagement surveys,More intriguingly, 20% of companies had User content:-5-4% Desktop-based application communications: -1%Mobile I have been struck by the diversity of aimsseen benefits from customer participation0-7%and widgets: 2%-10 Social knowledge sharing: SMS service alerts:of organisations in managing customer-2% in innovation and design. For me, this is5% User-generated content: audio: -3%On-site engagement. But with the latest set of results -5 one of the most exciting forms of online -4%Web-based widgets and Desktop-based applicationUser on-page customisation: we can see the clear, common benefits that engagement gaining direct feedbackbadges: 2%-4% and widgets: 2%-10Social knowledge sharing: engagement can offer. The survey also showsin a structured way through customer 5% On-site audio: -3% that these benefits are greatest where activepanels is tremendously powerful. I haveFigure 20 Web-based widgets andUser on-page customisation: or customer participation occurs. audience compiled a list of some of the free and paidAgency: Tangible improvements difference between 2010 and 2009 results badges: 2% -4%The three main types of participation are: services that can be used for gaining directfeedback on website experiences at Recommendations participation.http://bit.ly/feedback-tools 30 30Email newsletters:Email newsletters: 0%0%Personalised messaging on Personalised messaging on of companies and 53% of agencies 42% site: 1%site: 1%reported that recommendations of product,25Presence Presence on social networks:on social networks: Benchmarking methods of achieving active 25 21%On-site branded communities 21% On-site branded communities or brand had been a benefit of serviceparticipation within and beyond your sector / forums: 2%20Microblogging utilities: 29% / forums: 2%engagement initiatives. It seems that many can help you develop a participation strategy. 20Microblogging utilities: 29% Rich on-page interactive15On-site video (brand-created): experiences: -6% Rich on-page interactive customers love to participate! This is shown Another aspect of participation strategy is to9% On-site video (brand-created): 15experiences: -6% by the success of UK retailer Argos who On-site video (user-created):put in place measures which show the degree10 9%Blogging: 9% -1% received over two million customer reviews of participation.Focused micro-sites: -2% On-site video (user-created): 10 5Blogging: 9%Rich media advertising: N/A in a post-Christmas email campaign run -1%Dave is a member of the cScapeUser ratings and feedback: Mobile communications: 1% earlier this year to prompt participation.0 -6%Focused micro-sites: -2% Customer Engagement Unit specialising in digital5Rich media advertising: N/A SMS service alerts: -3%User-generated ratings and feedback: User content: Community participation. channel strategy and analytics. For his work-5-4%Desktop-based application communications: 1% Mobile0-6% and widgets: 2% 34% of companies and 32% of agencies as an author and commentator, Dave has beenSocial knowledge sharing:reported benefits from audience SMS service alerts: -3%-10 recognised by the Chartered Institute of Marketing2% User-generated content: audio: -2% On-site -5participation in online communities or as one of 50 marketing gurus worldwide who -4%Web-based widgets andDesktop-based application User on-page customisation:badges: -2%-4% and widgets: 2% support. Only certain types of brand lendhave shaped the future of marketing.-10Social knowledge sharing: 2%On-site audio: -2% Web-based widgets andUser on-page customisation:17 badges: -2%-4% 19. COMMENT Communication comes in many forms, but the key thing to bear in mind moving forward is that planning and persistence are invaluable.COMMENTFortunately in the end most of us can only beare the nervous system of your organisation. ways to address these issues is through Rob Killick manipulated up to a point. Experience tells us In an economy where people are moreco-development. Whether that is co-creation, when something is not right. Good customer cost-conscious, focused on quality productsco-product development, co-working; making engagement has to go beyond trickery. It and the security of their jobs, organisationscustomers part of your organisation brings the should encourage people to connect with andcannot afford to play Big Brother with brand closer to their heart. fully appreciate the product, but no amounttheir employees. If you can tap the inner of behavioural manipulation will make up for customer within your organisation, empower Who wouldnt want to have some small the weaknesses of something which is sub employees to be brand advocates and armpart in how one of their favourite brands is standard.them with appropriate tools, you are destineddesigning, developing or positioning a new Nudging no substitute forfor success. product? Put the co back into company and Rob is CEO of cScape. He is author of the blogmake customers part of yours. For the 28% quality UK After The Recession which deals with howThe happiness of your employees has a direct of the companies that stated organisational the UK can develop a dynamic economy onceeffect on your external customer community.incoherence, culture or (lack of) will as the Behavioural economics is the next big thing. again. http://postrecession.wordpress.comIn the latest survey 61% of companies andbiggest barrier for cultivating better customer The idea that we can be manipulated into57% of their agencies stated that intoleranceengagement, I hope this helps. spending and/or saving through the human equivalent of what Barbara Woodhouse used BJ Cookof poor customer service was expected toclimb in 2010. Whether they set up customerBJ is the CEO and co-founder of Digital Operative to do to dogs is now very much in fashion.Inc., a digital marketing agency passionate aboutcommunities based around forums, chat Books like Nudge by Richard Thaler encouragehelping brands create new products, services andgroups or customer feedback solutions, the view that we are there to be manipulatedtools to enrich the lives of their customers.organisations that embrace engagement into doing things rather than making our ownfor customer service can ensure that their rational decisions. Experience tells uscustomers have the level of information andinteraction they expect to continue to be loyal.Guy Stephens What does this mean and why is it important when something for the way we think about engagement?is not right. The four Cs of customerCommunication comes in many forms, but the Advertising has long worked on the principleGood customerkey thing to bear in mind moving forward is that there are ways of appealing to anengagement has to engagement that planning and persistence are invaluable. audience which hit our psychological sweetgo beyond trickery. The latest Annual Customer EngagementWhen implementing new marketing tools, spots. Ever since Vance Packards Hidden Study showed that only 17% of organisationsfeedback solutions, mobile applications or Persuaders in the 1950s, debate has raged about have processes and workflow to encourage Intranets, engaging customers in true (e.g. how ethical such manipulation is.two-way) conversation should be the approach. staff to use social media. For the 83%Customers are inundated at so many touch Customer [service] Businesses looking for competitive advantageof organisations that do not have these will always try to present their products inprocesses and workflows in place, here ispoints, that targeted, authentic engagements is king the best light and make them as appealing a solid foundation for you to build from.will provide more long-term value. Listen. Ask I call it the four Cs of Customer Engagement questions. Respond. Let them know when they2009 saw the emergence of a new type of as possible. There is no doubt that many of culture, community, communication andhave a good idea.customer service spearheaded by the use of us can be flattered into thinking that we can co-development. Twitter social media customer service. The look like the supermodel if we wear the sameStaying competitive and increasing customerfirst poster child of social media-led customer clothes as her, or be a babe magnet if we drive Lets start with culture. Any senior manager lifetime value should be goals of anyservice was Frank Eliason of Comcast. Then a fast car. knows that internal customers, e.g. your staff organisation worth its salt. One of the best came Tony Hsiehs slogan informing us that 18 20. COMMENT Zappos is a service company that happensThe proliferation of this multi-platformIn this latest survey, we have tried toLinus to sell shoes, BestBuys (r)evolutionaryapproach is reflected in the fact that 30% of understand the extent to which companies are experiment,Twelpforce and the rise of companies are looking to deepen and enrich Gregoriadismoving towards an Enterprise 2.0 environment third-party complaint/aggregator sites such astheir product or service offering through and focusing on what we describe as their Complaint Community, Plebble and Amplicate. the use of social networking, videos, email social business design. All of these confirmed that this new type ofnewsletters, discussion forums, blogging, More enlightened customer service was redefining the ways in micro-blogging, on-site branded communities/business leadersA great example of a company reaping the which companies engaged with not just their forums, content tagging, SMS service alerts are promoting rewards of customer engagement is the online customers, but people in general. and social knowledge sharing. processes and retailer Zappos, which has 380 people in its employee Be like Zappos not customer loyalty department and now gets At the same time, there were signs of a moreThe indications are that experimentationbehaviour which 75% of its business from repeat customers. open, honest and at times even empathetic will gradually turn into a more confident reward attempts to American Airlines conversation taking place between companies mainstreaming of social media-led engage customers, Its employees routinely send hand-writtenThe importance of customer engagementthank you cards and flowers to customers by and their follower-friends. On the one hand,customer service. while also minimizing the is becoming increasingly well understood.way of thanks. Zappos management team Twitter provided customers with the ability Although only 9% of the companies surveyedrisk of social media This was well illustrated recently by theencourages employees to make decisions and, to vocalise their intent to companies willing and a fifth of agencies have seen more interest fails. uproar which followed the decision byin stark contrast to a company like American to listen; on the other hand, companies found in customer engagement driven by increased American Airlines to fire a web designer Airlines, doesnt punish them when they show themselves engaged in a real-time feedback importance and power of the customer, 61%who sympathised politely with a disgruntledinitiative in the use of new communication loop with customers happy to let them know of companies and 57% of agencies believe customer who made some criticisms about thetechniques. exactly what they thought of their products or that intolerance of poor customer service will airlines website. service. Never before had 140 characters been Our research shows that companies who have so well and, at times, so cleverly used:increase in the next 12 months. Almost half ofIts good to see customer engagement in theprocesses and workflows to use social media respondents also realise there is more desiremainstream news, even if it wasnt quite for to build customer dialogue, or who urge staff Customer: what the ****, [insert company for real-time interaction.the right reasons. The employee had broken to use sites such as Twitter and Facebook to name] you lied to me! In short, whether you believe that sociala non-disclosure agreement around thebuild customer dialogue, are still very much Company: Hi I work for [insert company media has changed the rules of engagementairlines internal workings but his employersin the minority. However, we predict that in a name]; sounds like we got it wrong sorry. and customer service, or think instead thatshould have handled the matter a little less years time significantly more companies will How can I help?nothing has changed, everything is still to play clumsily. After all, the designer was driven be embracing social media activity, whether for for. The main difference is that companies are by a desire to engage with the customer andcustomer service, internal communications or UK companies such as ASOS, BT, Virgin increasingly more willing to listen. improve his companys website by offeringfor product development and innovation. Trains and EasyJet recognised that customerconstructive criticism. service was beginning to move towards a Guy is the founder of the LinkedIn Group Where While everyone is talking about social more de-centralised micro-interaction (in the social media meets customer service. He is aThankfully, many companies are now seeingmedia, we shouldnt lose site of the fact that words of David Armano) paradigm. Taking passionate advocate of social media, particularlythe bigger picture and are trying to bring about customer engagement is about much more the lead from their customers, they explored, Twitter (@guy1067), and how it can be used toa cultural shift. More enlightened businessthan an employee with a Twitter account or an appropriated and experimented with howenhance the customer service experience. leaders are promoting processes and employee executive with a blog. Customer engagement customer service was delivered. They not onlybehaviour which reward attempts to engageneeds to be effective and consistent across did this in real-time, but also on the go viacustomers, while also minimising the risk of offline and digital channels. There are also the increasingly ubiquitous smart phone. social media fails.tremendous opportunities created by mobile19 21. COMMENT and this is reflected by a dedicated section onthough more than 500,000 people each dayInvestment to drive increased customer Changing behaviour and attitudes this topic in this years report.joined Facebook, and Twitter really took off. engagement Intolerance of poor customer service is theFurthermore, although online video is nearly As weve been saying since the first CustomerFigure 21 shows that the emphasis on type of behaviour or attitude that companya universal for consumers, most companies Engagement Report three years ago, it is social media in the context of customerrespondents are most likely to expect todid nothing with this dynamic channel. important to map customer experiencesengagement is set to continue. The majorityincrease over the next year.The reason, I would say, was fear. They worry across different touch points. The researchTheres a hugeof companies say that they will increasethat rich media may be too much for theirAlthough the equivalent question was shows that organisations that are doing this party going oninvestment in their social networkcustomers and that using Facebook or Twitter phrased slightly differently last year, it is clear are significantly more likely to have successful in social media presence (61%) and 44% will spend moreor the like would lead to brand-damaging that this has become much more of an issue. customer engagement strategies.and everyoneon micro-blogging.mistakes. I would suggest that their biggestseems to Over half of respondents (61%) say that they Linus is Research Director at Econsultancy where mistake was failing to explore these newbe there Figure 23 provides evidence that many more expect people to become less tolerant about he oversees much of its award-winning content. avenues for customer engagement.everyone, companies than a year ago are gearing up poor service; and this percentage has almostthat is, except for investment in social networking anddoubled since last year.The flip side of brand risk is brand value.brands sittingTwitter. This also shows that there will be lessA few individuals at every major brand We attribute this to two main factors.BJ Fogg at home emphasis on micro-sites as we move intounderstand this. In 2009, these individualsFirstly, the recession has led to even moreand merely2010. This may be due to a reduced focus onlearned to navigate the new worlds ofcompetition between businesses and thiswatching thecustomer acquisition which often involvesFacebook, Twitter, and online video. They party on TV. means that the desire to retain customers ischampioned these channels internally hoping campaign micro-sites. Companies are thinking even stronger.to increase brand value. But the path forward more strategically about how they can buildhas often been blocked by organisational fear.engagement on their principal web properties The second factor is the rise of social mediaThats why I wager that 2009 has been a yearrather than tactical landing pages.which means that companies are more awareof frustration.when there is dissatisfaction about productsIt should be noted that the increased focus Your customers are waitingor services. Disaffected consumers can nowTheres certainly a growing gap between whaton social media is not coming at the expense name and shame instantly in full view ofordinary people do and what established of email investment. More than half of Heres a bet I would make; the bigger yourdozens or even thousands of people.brands dare to do.companies (58%) are still planning to increase brand, the more likely you have felt frustratedtheir investment in email newsletters over the Consequently, many companies have raised in 2009. This is not just because the economyTheres a huge party going on in social course of the next year. Many companies aretheir game, recognising that provision of an tanked; the frustration came from seeing newmedia and everyone seems to be there now tying up email activity with social media. excellent customer experience has never been ways to engage customers but being unable toeveryone, that is, except brands sitting ata better way of marketing a business. take action.home and mere ly watching the party on TV.Increased use of behaviourally targeted emailHow long will customers wait for those brands does not seem to be coming at the expense of Almost half of respondents (48%) say there is 2009 was the year that Facebook and Twitterto catch up?email newsletters, even though it is becomingmore desire for real-time interaction. clearly emerged as channels for brands toharder for companies to get the attention of engage their customers. And some brands Sensitivity to price is still prominent forBJ is a social scientist and innovator described by customers through generic newsletters. dazzled, with millions of followers and fans. companies and agencies but it can be notedFortune Magazine as one one the 10 New Gurus But by and large, most brands sat on theYou Should Know. Hes also the author of bookMarketers are having to make their that it is no longer most likely to be front of sidelines. Over half of the companies surveyedPersuasive Technology: Using Computers to e-newsletters relevant by personalisingmind. Compared to a year ago, companies last year did nothing to engage customersChange What We Think and Do.content and, in some cases, by inserting now have a better understanding of how on Facebook or Twitter in 2009, even event-triggered dynamic content. elastic their pricing is. 20 22. 4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 The recession has led to even more competition between businesses and this means that the desire to retain customers is even stronger.Figure 21 Figure 23Company: In which areas will you increase investment to drive online customer Company: Which of the following behaviours and attitudes do you expect yourengagement over the next 12 months? organisation will need to address in the next 12 months?80 8080 Presence on social networks:networks: Presence on social On-site brandedOn-site branded communities communities 80Intolerance of poor customer service: 61%service: Intolerance of poor customer 61% 61%61% / forums: 27% / forums: 27%Focus on quality:quality:Focus on 53% 53% Many companies 7070 70 70 Email newsletters: 58% Mobile communications: Email newsletters: 58% Mobile communications:Desire for simplicity: 53% have raised their60 On-site video (brand-created):25% 60Desire for simplicity: 53% 25% game, recognising60 49%On-site video (brand-created): knowledge sharing: Social 60Desire for more real-time interaction: 48%Desire for more real-time interaction: 48% that provision of an50 25%5049% Microblogging utilities: 44%Social knowledge sharing:Sensitivity to price: 47%excellent customer 5040 UserMicroblogging utilities: 44% ratings and feedback: 25% Web-based widgets and5040 Sensitivity to price: 47%Prolonged decision-making: 23% experience has badges: 25% 44%Lack of supplier / brand loyalty: 22%40 Web-based widgets and40Prolonged decision-making: 23% never been a better30User ratings and feedback: Rich media advertising: 21% Blogging: 43% badges: 25%30Focus on short-term needs: 17% way of marketing 2044% User-generated content: 35% SMS service alerts: 17%20Lack of supplier / brand loyalty: 22%Buying and selling second-hand: 13%3030 Rich media advertising: 21% a business. Rich Blogging: 43%on-page interactive On-site video (user-created):Focus on short-term needs:17%10 13%10Buying own-brand products: 12% experiences: 31%SMS service alerts: 17%20User-generated content: 35%Desktop-based applications20Sacrifice (family firstselling second-hand: Buying and etc.): 9% 13% 0 Focused micro-sites: 29%0 and widgets: 13%On-site video (user-created):Purchase of luxury and indulgent items: 6%10Rich on-page interactive10Buying own-brand products: 12% Personalised messaging13% On-site audio: 12%experiences: 31% throughout the site: 29% Desktop-based applications User on-page customisation:Sacrifice (family first etc.): 9% 0Focused micro-sites: 29% 11% 0 and widgets: 13% Purchase of luxury and indulgent items: 6%Figure 22 Personalised messaging On-site audio: 12% Figure 24Company: Areas for increased investment difference between the site: 29%2009 resultsthroughout 2010 and Company: Behaviours and attitudes difference between 2010 and 2009 results User on-page customisation: 11% 35 35Presence on social networks: social networks: Presence on30 On-site branded communities On-site branded communities30Intolerance of poor customer service: 29% service: 29%Intolerance of poor customer25%25% / forums: 3%/ forums: 3% 3030 2525FocusFocus on quality: 9% on quality: 9%Email newsletters: -1% Email newsletters: -1% communications: Mobile Mobile communications: Desire for simplicity: 17% 7% 20 25 On-site video (brand-created): 7% 20Desire for simplicity: 17% 25 7% On-site video (brand-created): Social knowledge sharing:Desire for more real-time interaction: N/A 20 15 7%9%Social knowledge sharing:Desire for more real-time interaction: N/AMicroblogging utilities: 31%15Sensitivity to price: -1% 20 15Web-based widgets and9%10Sensitivity to price: -1% Microblogging utilities: 31%User ratings and feedback: badges: -1%Prolonged decision-making: -12% 15 103%10 Web-based widgets and 5Lack of supplier / brand loyalty: -8%Prolonged decision-making: -12% User ratings and feedback: advertising: N/A Rich media5Blogging: 7% badges: -1% 0Focus on short-term needs: -10% 103%SMS service alerts: 2%5Lack of supplier / brand loyalty: -8%User-generated content: -2%0Rich media advertising: N/A On-site video (user-created):-5Buying and selling second-hand: 7% Blogging: 7%Rich on-page interactive 0Focus on short-term needs: -10%5-1%Buying own-brand products: 5% -5 experiences: -6% SMS service alerts: 2% -10 User-generated content: -2% applications Desktop-basedSacrifice (family first selling second-hand: 7%Buying and etc.): 2%0 -10 Focused micro-sites: -9%-5 and widgets: -2%On-site video (user-created): -15 Rich on-page interactive Purchase of luxury and indulgent items: -3%Buying own-brand products: 5%Personalised messaging -1% -5experiences: -6% On-site audio: -1%throughout the site: 2%-10 Desktop-based applications User on-page customisation:Sacrifice (family first etc.): 2%-10Focused micro-sites:-4%-9%-15 and widgets: -2%Purchase of luxury and indulgent items: -3% Personalised messaging On-site audio: -1% throughout the site: 2% User on-page customisation:21 23. 4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010Companies increasingly need to think about their social business designEnterprise 2.0Figure 25 Figure 26 Company: Has your organisation adopted any of the following for Company: Has your organisation adopted any of the following for This years research covers what we describeproduct development and innovation? internal communications? as Enterprise 2.0, a phrase we use to refer to how organisations are equipping themselves 40 50S Social networks: 36% internally to embrace social media andThe aim is to customer engagement in a world where Email newsletters: 36% Eunderstand35 the traditional business paradigm hasmore about how 40User ratings and feedback: 25% been disrupted. Ucompanies aretaking a more30 Companies increasingly need to think about Employee blogging: 17% E their social business design, and how they holistic approach organise themselves to take advantage of to customer 25 30Discussion forums: 17%D unprecedented opportunities for facilitating engagement.40 50 Social networks: 12% Social networks: 36% communication with, and between, customers 20Content tagging: 17% C Email newsletters: 36% Email newsletters: 32% and employees. 35 30 User ratings and feedback: 25%40 20Video sharing: 16%User ratings and feedback: 9%V So we asked companies and agencies 15 Employee blogging: 17% Employee blogging: 16% whether they were using various types of 25 Discussion forums: 17%30 Internal or in-company social networking: 13% 15% Discussion forums:In Web 2.0 technology and features to drive Content tagging: 17% Content tagging: 10% the following: 2010 On-site branded communities / forums: 13% O Video sharing: 16%2010Video sharing: 9%15 Production development and innovation Internal or in-company social networking: 13% Podcasts: 12% Internal or in-company social networking: 32% P10 5 Internal communicationOn-site branded communities / forums: 13% 10On-site branded communities / forums: 7%5 Podcasts: 12%Mobile communications: 11%Podcasts: 6% M Customer service improvement0 0 Mobile communications: 11% Mobile communications: 6% 0 0Intranet: 10%In The aim is to understand more about 40Social networks: 36% 50 Intranet: 10%Social networks: 12%Intranet: 43% how companies are taking a more holistic 35Email newsletters: 36%Social knowledge sharing: 8% Social newsletters: 32% sharing: 8%Email knowledge Social knowledge sharing: 17%S approach to customer engagement, beyond 40 User ratings and feedback: 25%SMS service alerts: 7% User ratings and feedback: 9% SMS service alerts: 4% the use of technology and social media simply 30SMS service alerts: 7% S Employee blogging: 17%Instant messaging: 6%Employee blogging: 16%Instant messaging: 20% for marketing. 25Discussion forums: 17%30Internal microblogging utilities: 5% Discussion forums: 15%Internal microblogging utilities: 9%Instant messaging: 6%In Adoption of technology for product 20Content tagging: 17% Content tagging: 10%development and innovation 15 Video sharing: 16%20 Internal microblogging utilities: 5% Video sharing: 9% In Internal or in-company social networking: 13%Internal or in-company social networking: 32% Figure 25 shows the extent to which 10 companies are embracing a range of channels,On-site branded communities / forums: 13% 10On-site branded communities / forums: 7%features and technologies for product5Podcasts: 12%Podcasts: 6%development and innovation. Mobile communications: 11% Mobile communications: 6%00 Intranet: 10%Intranet: 43%Social knowledge sharing: 8% Social knowledge sharing: 17%22SMS service alerts: 7% SMS service alerts: 4%Instant messaging: 6%Instant messaging: 20% 24. 4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010 We will be starting regular staff social media boot camps forkey/enthusiastic staff.We are using YouTube heavily to show our customers different It can be seen that many organisations are missing an opportunity. Just over a third of organisations (36%) say they are using social networks and email newsletters for this purpose but only a quarter (25%) of companies tap into user ratings and feedback.limited in how they are approaching customerservice improvement beyond the traditionalroutes which companies have always adopted.(Figure 27) Some organisations are now using Twitter andFacebook for customer service because these Even fewer (17%) are using discussion forumsapplications of our product line. to feed into development.are excellent vehicles for customers who wantto engage in real-time. Just as they are failing to tap into customer We show Twitter feedback and mentions of our brand and content,feedback, many companies are also neglecting The use of social networks for customerservice is something that companies have toon our own site to be transparent about what others are saying to share information internally. Very small percentages of respondents are using consider carefully before adopting becauseabout us. employee blogging (17%), internal social such an approach can backfire unless anorganisation is properly geared up to deliver networking tools (13%), intranets (10%) or social knowledge sharing (8%) to help driveagainst expectations. But where a company We are reviewing our social media policy. Currently we havedevelopment and innovation.does this well, it can spread goodwill andimprove brand sentiment.limited presence but plan to increase that this year. Adoption of technology for internalResourcing social media and customer (employee) communications We send more personal messages via Twitter. e.g. we engage Although only 10% of companies are usingengagement on a one-to-one basis with people that catch our eye who are an intranet for product development andIn order to understand how companiesare resourcing social media and customer innovation, 43% are using this tool for internalmentioning the brand in some way and we do this publicly.communications. (Figure 26)engagement activity, we asked our companyrespondents whether a number of statementse.g. we might wish someone good luck if they say they are starting Email newsletters and internal socialwere true.one of our courses or hope it goes well if they mention theyrenetworking are used by around a thirdMore than half (55%) of responding of companies (32%). These tools can bespeaking at one of our events. This goes down very well and feelsparticularly helpful for larger organisationscompanies say there is a specific teamor individual internally to manage socialnatural. Over time it might become resource-intensive.which are divided up into numerous departments and physical locations.media. Exactly a quarter of companies havecommissioned an agency to use social mediaWe enable customers to share information with the company and for customer engagement. Adoption of technology for customer(Figure 28) service improvementtheir friends on Facebook and Twitter. The increased profile of social media is also As was the case with product development and internal communications apart from reflected by the fact that a third (34%) ofcompanies have increased their social media What company respondents said when asked how their organisationsusing email newsletters (55%) and social networks (36%), most companies are fairlybudget in the last 12 months. were innovating in the way they engage with their customers online.23 25. 4th ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2010Figure 27Organisations who urge their staff to engageFigure 28Company: Has your organisation adopted any of the following forwith social media are still very much in theCompany: Which of the following statements are true for yourcustomer service improvements? minority. Some 29% say senior staff are organisation? urged to use social media to build customer60Many businessesSocial networks: 36% dialogue, while a fifth (19%) say this applies to 60Tonly see socialjunior staff.media in terms ofEmail newsletters: 55% Wthe cost to their These low percentages reflect the50 50businessratings and feedback: 26%User becausetrepidation which companies feel about Sof time spent allowing staff to engage directly withby employeesblogging: customers online. There has been plenty ofEmployee17%W40socialising online. negative publicity about brand representatives 40 Discussion forums: 20% social media inappropriately; for using J 60Social networks: 36% example Habitats inappropriate use of hash30 Content tagging: 15% on Twitter and the Ryanair employeetags30W Email newsletters: 55% 50 who called a blogger a liar and an idiot. User ratings and feedback: 26%Video sharing: 17%W Employee blogging: 17% Many businesses only see social media 4020 Discussion forums: 20%Internal or in-companyterms of the cost to their businessin social networking: 5% 20W Content tagging: 15% because of time spent by employees 30 On-site branded communities / forums: 14% side of thesocialising online. The otherW Video sharing: 17%10story (unreported in newspapers) is that 10 20Internal or in-company social networking: 5%Podcasts: 11%many companies could be missing out On-site branded communities / forums: 14%on an opportunity to improve customer 10 Podcasts: 11% Mobile communications: 10% and enhance their brand, byengagement0Mobile communications: 10% empowering employees while giving the right 00Intranet: 4%Social networks: 36% Intranet: 4% guidance. However, only 17% have processes60 There is a specific team or individual internally to manage social media: 55%Email newsletters: 55% Social knowledge sharing: 9% and workflows in place to encourage staff Social knowledge sharing: 9%We have increased out social media budget in the last 12 months: 34%use of social media, and only 13% actually50User ratings and feedback: 26% SMS service alerts: 12% Senior staff are urged to use social media to build customer dialogue: 29%incentivise staff to use social media to engage SMS service alerts: 12%Employee blogging: 17% Instant messaging: 6% We have commissioned an agency to use social media for customer engagement: 25%with customers online.40Discussion forums: 20% Internal microblogging utilities: 5%Junior staff are urged to use social media to build customer dialogue: 19% Instant messaging: 6%Content tagging: 15% The agency data suggests even moreWe have processes and workflow to encourage staff use of social media: 17% 30Video sharing: 17% Internal microblogging utilities:in social media, with 44% of investment 5% We have dedicated social media budget: 17% agency respondents saying that clients haveInternal or in-company social networking: 5% 20We have hired extra staff to help with out social media efforts: 14% increased their budget for this type of activity.On-site branded communities / forums: 14%We incentivise staff to use social media to engage with customers online: 13%10Podcasts: 11% Mobile communications: 10% 0Intranet: 4% Social knowledge sharing: 9% 24SMS service alerts: 12% Instant messaging: 6% 26. COMMENTAs we approach 2010, we are now firmly entrenched in Search 2.0 Our new global intranet let us cut through Engaged employees need the ability to connectunderway with Twitter signing deals to put Adam Hibbertthat by demonstrating that the company can freely and to structure the information they see messages sent via its micro-blogging service respond to employee needs and so we mightaround their own, specific queries.into the Microsoft and Google search indexes really do the same for our customers. Crucially,(at the time of writing, its currently Microsoft The feeling ofits allowed us to enlist everyones feedback. Adam is Group Communications Manager for one, Google zero). And of course, there is stuckness is Aviva plc. His background is in UK-based print & Twitters own search tool (http://search. changing. SocialAn all-staff forum on our homepage isonline media, from radiotimes.com to The Sun.twitter.com), as well as some new entrants media seems to be slashing the social distance between frontlineto the real-time search market e.g. Scoopler acting like a socialand C-Suite, hiking up the transparency and Amanda Davie(http://www.scoopler.com). solvent; freeing Employee engagement accelerating feedback; cross-border, cross- value from places functional teams are springing up and solving So what will Search 3.0 look like? Well, if Web we hardly knew wesine qua non for customerproblems faster.3.0 is the Semantic Web, then Search 3.0 will had places. be all about, well, the semantics! As a linguist,engagement Employees see executives up close and I cant tell you how excited I am about personal in the forums; executives areSearch 3.0. There will be a shift away fromAt Aviva, were transforming from dozens of beginning to see the benefits of dialogue withbuilding keyword lists and a focus towardsancestor businesses and propositions to One employees; the sincerity and determinationunderstanding search psychology.Aviva. The proposition were cohering around behind the new brand are steadily gainingIs search ready for Web 3.0is all about attention to individual customers. credibility.Understanding search linguistics and semanticWere applying Net Promoter Score measures or is it just semantics? behaviour is a good start; brands will need toglobally to get our KPIs straight customer The feeling of stuckness is changing. SocialThis years survey confirms an even more get to grips with how searchers translate theirengagement is our Holy Grail.media seems to be acting like a social solvent;dramatic uptake in Web 2.0 strategies amongcomplex hopes, dreams and information needs freeing value from places we hardly knew we into sophisticated natural language searchThat demands effective feedback and process brands than last years version and forecasts had places. queries. Theyll have to learn how to respondimprovement, internally. All our colleagues more of the same to come. Social media need to see and understand our brand promise, specifically social media optimisation - is an in terms of the digital assets they provideagree that its important, believe that its Our biggest internal challenge important technique of search marketing; against searches and also look even morepossible and take responsibility for getting usfor 2010 will be to keep proving genuine (and non-commercial) conversations closely at how branded content is worded.there. We need every single employee to be our promise to employees,and links created between real people and Search is about to get really, really interesting,brands are the only real way search enginesalive to our brand promise.giving them ever more power changing from being the marketing channel forcan establish that a website is popular.Its an uphill battle in a complex multi-national, to deliver for our customers. geeks to the marketing channel for geniuses.stretched by relentless change in the lastAs we approach 2010, we are now firmly Or is the plural of genius genii? Find thedecade. Survivors have seen it all, taking Online, our biggest internal challenge for entrenched in Search 2.0. I would define this as answer in true Search 2.0 style by crowdtell and sell campaigns with a fistful of salt.2010 will be to keep proving our promise toa richer and more relevant search experience sourcing: http://bit.ly/35NZYDJunior just passing through employees grow employees, despite the maelstrom givingcombining video, audio, imagery and map Amanda is a member of the cScape CEU and thejaundiced when the legacy proves harder to them ever more power to deliver for ourresults. It includes the ever-increasingly founder of Reform, an independent search businessbudge than wed wish for. Thats corrosive customers. More powerful search and semantic important index of user-generated content, consultancy that builds practical solutions forfor engagem