The path to engagement: A new perspective

There are many differing views on what creates a more engaged customer. It is also a concept that can be underplayed in organisations which all too often place more importance on bringing in new customers than building longer-lasting, more fruitful relationships with existing ones. With that in mind, we were keen to explore the psychological journey that consumers go on when building relationships with companies and have been working with Oxford Brookes marketing and consumer psychology professor Janine Dermody to conduct primary research in the financial services, telecommunications and retail sectors around this issue.

The research

The aim of the research was to develop a model for mapping the path to customer engagement and measuring the extent to which a company has become a meaningful part of a consumer’s life. The calculated index helps companies understand the rational and emotional attitudes of their customers which can then inform the development of product propositions, marketing programmes and user experiences to increase their connection with the customer.

It’s interesting to hear from Janine directly on this: “This is the first model of its kind to map the engagement process in this manner. Its credibility is not only derived from rigorous testing but also the robustness of the dataset underpinning it. The model clearly shows a pathway from initial consumer awareness of a brand, to someone becoming a customer, the building of a relationship between brand and consumer and increasing engagement which finally leads to the ultimate goal for businesses – to create a loyal customer base.”

A questionnaire was developed for the industries examined for this study: banking, retail and telecommunications. The results provide a huge amount of insight into how consumers interact with their bank, mobile phone provider and favourite retailer. Variation among different demographics clearly indicates that there is not a one size fits all approach. Companies need to work hard to build relationships with their customers, using tactics that tap into emotion to drive engagement and will lead to consumers staying longer and spending more.

Interestingly, Gartner Group research showed that 80% of a company’s future revenue will come from just 20% of a business’ existing customer base, and that’s not surprising when you consider that it actually costs less to retain a customer than it does to attract a new one.

The reality is that engaging with customers in a meaningful way has never been more important. In a world where there is so much choice, businesses must invest in strategies for building long-lasting relationships – the statistics clearly indicate that this will deliver a greater return on investment. Creating the vital ‘pull’ factor that keeps consumers coming back for more is, ultimately, what will make or break a business. It is no longer sustainable to simply satisfy a customer during a single transaction.

The logic of emotion

While the banking, retail and telecommunications industries are all different, the research indicated that the drivers for selecting a provider in the first place are similar and grounded in rational decision, such as value for money, brand reputation and security. More than 80% of respondents agreed with these being their primary influencers. Logically, the least compelling reasons for choosing a brand were emotional in nature, such as organisational advertising, peer group influences and access to exclusive offers – only around 35% of participants stated these as reasons to select a company.

This all points to the fact that consumers are initially indifferent towards an organisation when they enter into that first transaction, be it opening a bank account, choosing a mobile phone provider or retailer. It appears that it is difficult for an organisation to influence the initial entry point with anything other than hard facts, such as a mobile phone provider having the best network coverage where an individual lives.

However, it is after this initial ‘entry point’ that the organisation itself must work hard to increase interest and validate a customer’s original decision making process through customer experience. Companies can move people to being ‘engaged’ quickly if they deliver on basics like customer experience, trust, satisfaction and peace of mind. There is a logical journey from entry point to consumer loyalty which is underpinned and driven by both emotion and participation. Customer attitude towards a brand is ultimately a reflection of the interaction between the initial rational evaluation process and emotional impressions. Companies that understand the role of emotion in the customer engagement journey are the ones that will develop deeper, and more profitable, relationships with their customers.

More is more

What’s clear from the research is that minimising the effort a customer exerts in interacting with a company and delivering against service promises will build trust and satisfaction between brand and customer. This establishes a company’s position in a person’s psyche but it is ultimately the emotional connection that is a prerequisite for driving engagement.

The study also proves that customers who buy additional products or services that fall outside the core transactional relationship are more engaged and the company consequently becomes an integral part of a customer’s everyday life. Quantity matters. Companies who persuade consumers to buy more and interact using multiple channels more frequently will have a more engaged customer base. And a more engaged customer will ultimately become a more loyal one.

Advocacy is the ultimate goal

The study establishes that there is a clear path to advocacy and there is a progressive relationship between the decision to stay with a company, to purchase goods and finally to recommend to others. The highest engagement scores were seen among customers who said that they would always recommend a company.

Whether there is a contractual relationship, as is the case with the banking and telecommunications sectors, or an ‘open’ one, as for retailers,   each industry has its challenges. Telecommunications companies need to do more to draw customers in and retail customers are fickle. The entry point to the path to advocacy for banks and telecommunications companies is based on satisfaction and trust, with emotional drivers tipping customers to recommend. The purchasing entry point for retail customers has emotional drivers and a mixture of both rational and emotional factors is required to tip them towards recommendation.

This cannot be achieved with a ‘one size fits all’ approach and businesses must place greater emphasis on building longer-lasting, emotional and personal connections with their customers. This is the only way that they will be able to extend their reach into a consumer’s life – and it is this which will drive advocacy, loyalty and business growth.