3rd Annual Online Customer Engagement Survey

Report 2009
3rd Annual Online Customer Engagement Survey

Report 2009
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
Introduction
Welcome to this, the Third Annual Online
Customer Engagement Survey Report.
This year the survey was translated into four
different languages and attracted the largest
number of participants ever with nearly 1300
companies and supplier agencies taking the
survey. This makes it the biggest survey of
its type anywhere in the world.
Half of you now classify customer engagement
as essential to your organisation and your
answers indicate that an increasingly
large number of you understand customer
engagement as an activity that delivers value
to both customers and businesses. After all
this is the defining feature of engagement, its
true value lies in the development of mutually
beneficial relationships.
4
Those organisations able to grasp the changes in our customers’ behaviour and
psychology, while placing an emphasis on delivering increased value, will be able
to reap the rewards of customer engagement.
This year’s report provides insights into the
way companies and agencies are continuing
to use the online space to develop stronger and
more intimate bonds between our organisations
and our customers. A year ago we might
all have accurately predicted that email
newsletters would remain a staple technique
for improving online customer engagement,
but far fewer might have predicted that 13%
of companies would look to be investing in
micro-blogging utilities like Twitter.
There have been a number of constants across
the years that the survey has been running but
this report is published into a very different
world than the previous ones. The shadow
of a credit crunch in 2007/2008 has already
turned into full blown recession in some
countries and the impact of international
economic woes are predicted to reach well into
the next decade. The instability that the market
economy creates for all organisations means
that it is increasingly difficult to think beyond
the short term and even the best laid business
plans can be unhinged at a moment’s notice.
So what is the role for customer engagement psychology, and ultimately their behavioural
within this climate? patterns. For example, in previous economic
If we assume
downturns escapism made the cinema,
that sensitivity to To effectively engage we must endeavour to
gambling and cosmetics relatively ‘recession
price is the sole, understand and provide relevance and this
or indeed the proof ’. Will they continue to be or will
year’s report provides insights into how we
most important are targeting and segmenting our customers,
alternative forms of escapism predominate?
motivating quality, What role will the expanding secondhand
as well as what methods we are using to learn
we will have market online play and how can we take
how our customers are changing in this new
missed the more advantage of this? As tightened purse strings
world.
subtle interaction encourage conservative purchasing how will
between the Nearly 50% of you recognise that sensitivity a recessionary focus on the family unit express
changing economic to price will be a key customer behaviour itself online?
environment and
in the coming year. But if we assume that
our customer’s it is the sole, or indeed the most important
In our First Online Customer Engagement
psychology. Report published in 2006 I made the point that
motivating quality, we will have missed the
“customer engagement is the best measure of
more subtle interaction between the changing
current and future performance; an engaged
economic environment and our customer’s
relationship is probably the only guarantee
for a return on your organisations’ or your
clients’ objectives”. I still hold this to be true.
Indeed in a troubled economy the emphasis
on engagement is one of the few activities
that can deliver value to both customer and
business alike, over both the short and the
long term.
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
E-consultancy is the leading source of
independent advice and insight on digital
marketing and ecommerce.
Their reports, events, online resources and
training programmes help a community
of over 75,000 registered marketers make
better decisions, build business cases, find the
best suppliers, look smart in meetings and
accelerate their careers.
E-consultancy is an award-winning online
publisher of reports covering best practice,
user experience benchmarking, market data
and supplier selection aimed at internet
professionals that want practical advice on all
aspects of e-business.
E-consultancy also operates a highly popular
training division, used by some of the world’s
most prominent brands for staff education,
both in-house and via public courses. We
provide training across all areas of digital
marketing and at all levels from one day
courses to diplomas to Masters in Digital
Marketing.
2
In addition, we host more than 100 events
a year, such as The Online Marketing
Masterclass, regular Supplier Showcases and
Roundtables, an annual Future of Digital
Marketing event, Digital Cream and a range of
social events.
The E-consultancy site now attracts
175,000 unique users per month where they
access research, read the blog and take
part in discussions in the forums. And as a
portal to the digital marketing community,
E-consultancy members can also link up with
other members and digital suppliers through
our directories, as well as find a new job or
new digital talent using the job listings.
Some of E-consultancy’s client-side members
include: Google, Yahoo, MSN, MySpace, BBC,
BT, Shell, Vodafone, Yell.com, Dell, Oxfam,
Virgin Atlantic, TUI, Barclays, Carphone
Warehouse, IPC Media, Deloitte and Touche,
T-Mobile and Estée Lauder.
Join E-consultancy today to learn what’s
happening in digital marketing – and what
works.
Call us to find out more on
+44 (0)20 7681 4052 or contact us online.
e-consultancy.com
cScape, the research sponsor, is an award-
winning interactive agency and a certified
Microsoft Gold Partner. An emphasis on
customer engagement underpins cScape’s
integrated consultancy, creative design and
technical development services.
The cScape Customer Engagement Unit
(CEU), launched in November 2006, is a team
of individuals with decades of experience in
digital marketing and communications, design
and technology development.
cScape combines in-depth research into the
science of persuasion with the development
of practical online engagement strategies. Our
priority is to enable clients to align business
goals with the needs and interests of their
customers. cScape works with a diverse range
of organisations from the corporate, charity
and government sectors.
The CEU has continued to grow over the last
year and has now developed an international
base of partners. This allows the CEU to
provide wider services to global companies,
many of whom have contributed to the success
of the survey this year.
Since the launch of the CEU and the world’s
First Annual Online Customer Engagement
Survey, the idea of customer engagement
has been widely adopted by companies and
agencies alike. cScape continues to be at
the forefront of developing the concept of
engagement, with the book Winners and Losers
in a Troubled Economy; how to engage customers
online to gain competitive advantage published
in early 2008 and a continual programme of
thought leadership events which have informed
professional and informal online debates about
engagement and persuasive design.
cScape is also a Microsoft SharePoint Server
2007 (MOSS) Centre of Excellence and has an
award-winning design team.
We have an exciting programme of events
planned for 2009 and hope you will be able to
come along. Please contact Sarah Woodbridge
to find out more about events, the Customer
Engagement Unit and cScape’s other services
(s.woodbridge@cscape.com +44 (0)20 7689
8800).
Find out more about cScape
cscape.com
Join the debate
customer-engagement-network.com

3rd Annual Online Customer Engagement Report 2009
Introduction 4
Executive summary and highlights 7
Methodology and sample 9
Findings 12
Customer engagement strategy 12
Importance of customer engagement 12
Do you have a defined customer engagement strategy? 13
Interest in customer engagement 14
Behaviour of an engaged customer 16
Mapping customer experiences 18
Customer engagement and the troubled economy 18
Impact of the economic downturn 18
Customer data collection 20
Changing customer behaviour and attitudes 21
Tactics and Initiatives 22
Ways of improving engagement and areas of investment 22
Areas of increased interest 22
Mobile marketing to enhance customer engagement 24
Segmentation of audience to identify quality customers 24
Issues around customer engagement and key principles 26
Barriers to better online customer engagement 26
Key principles of customer engagement 28
Migration of marketing budgets 29
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
Comments on the findings
Andy Beal – Customer engagement takes center stage in economic 13
downturn
Jim Sterne – Online marketing working. Senior managers sleeping 14
Pete Mortensen – When the customer talks back 15
Ian Jindal – Sustaining profitability in a challenging retail climate 16
Martha Russell – Engagement pinball 17
Eric Peterson – We (still) need a standard measure for engagement, 19
perhaps more than ever!
Becky Carroll – Creating customer engagement on their turf 25
Matthew Bailey – Striking a balance 26
Stéphane Hamel – When engagements rhymes with commitment 27
Alex Smith – Invest in the right blend 29
Thoughts on customer engagement
Lucy Conlan – Tread carefully – the customer is not always right 32
Clare O’Brien – It’s a meatball sundae Jim, but not as we know it 34
Hugh Gage – Meeting expectations is the first step to engaging 36
with your customers
David Dodd – Can rich content mean rich customer experience? 38
Richard Sedley – Can I tell you a story? 40
Amanda Davie – But I still haven’t found what I’m looking for 40
Lynda Rathbone – Oh the humanity! 43
Dave Chaffey – Learning to slice and dice 44
Survey partners 48
3

Those organisations able to grasp the changes
in our customers’ behaviour and psychology,
while placing an emphasis on delivering
increased value, will be able to reap the
rewards of customer engagement and will
be best placed to emerge winners from the
current economic situation, those that can’t
have a lot to lose.
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
It just remains for me to thank all those who
made this the most successful survey to date.
Thanks to everyone who participated. To Linus
and Aliya at E-consultancy. To our partners
who promoted the survey around the globe:
Patrick, Lance, BJ, Ria, Theo and Anne-
Kathrine. To our contributors: Amanda, Jim,
Andy, Pete, Clare, Alex, David, Hugh, Dave,
Becky, Ian, Eric, Lynda, Stéphane, Matthew
and Martha. And finally to my colleagues
at cScape: Sarah W, Magda, Sarah B, Tom,
Steven, Lucy, Theresa and Rob.
We hope you find the Third Annual Customer “Why the focus on customer
Engagement Report interesting and useful and satisfaction and not sales?”
that you’ll share your thoughts on its content.
Andy Beal, p13
Richard Sedley
cScape Customer Engagement Director
r.sedley@cscape.com
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3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009

Executive summary and highlights

6

Customer engagement
is widely seen as a way
of  deepening and enriching
a product or service offering
and a method for gaining
customer insight.
Executive summary and highlights
The Third Annual Online Customer
Engagement Report is based on a survey of
1,291 respondents carried out in September
and October 2008.
Whilst the importance of customer
engagement is widely acknowledged, the
research found that fewer than half of
organisations (42%) have a defined customer
engagement strategy in place.
It is clear that whilst companies understand
that customer engagement is important,
many are still unsure about how to implement
a coherent and practical plan of attack.
Tellingly, less than half of respondents (41%)
said that the deteriorating economic climate
had resulted in a greater focus on customer
engagement.
The essence of customer engagement is seen
as being about creating relationships which
result in value both for customers and for
organisations. Asked about their organisation’s
interest in online customer engagement,
38% of respondents said that it was about
increasing long-term customer value while 34%
said that it was about increasing value delivered
to the customer.
Customer engagement is also widely seen
as a way of deepening and enriching a product
or service offering and a method for gaining
customer insight.
At a time of economic crisis, organisations
need to be clear about how customers are
modifying their behaviour and how this could
impact them.
Sensitivity to price is the type of customer
behaviour which responding organisations feel
that they will most likely need to address over
the next 12 months. Nearly half of companies
surveyed (48%) said that this would be a
behavioural trait which was significant for them
next year.
Other report highlights
Email newsletters are the tactic most likely
to have driven a tangible improvement
in customer engagement, with 59% of
respondents saying that their organisations
will increase their spending in this area.
Areas associated with Web 2.0 and social
media such as user ratings & feedback (41%),
user-generated content (37%), blogging (36%)
and brand presence on social networks (36%)
are also expected to attract significant sums
of  investment even though it is not always
easy to track return on investment (ROI) in
some of these areas.
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
Despite the relative novelty of micro-blogging
utilities such as Twitter, it is interesting to note
that 7% of companies say they have improved
their customer engagement through this
channel.
Despite the growing importance of customer
empowerment, only 13% cite participation
in innovation and design as an important
customer attribute.
Only 5% of companies have a customer
engagement strategy which embraces the
mobile channel.
Lack of resources continues to be a major
barrier to successful customer engagement,
although encouragingly, slightly fewer
companies now find this to be a major problem
compared to last year (52% compared to 60%
in last year’s survey).
Just under a third of companies (31%)
say that problems with technology are
a significant barrier to cultivating better
customer engagement.
7
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
The value of the survey
In a time when the internet is rapidly taking
over traditional media, there is no question that
online customer engagement is essential. Over
the past few years, cScape has taken great
strides towards becoming thought leaders in
the field of engagement, helping companies of
all sizes recognise and understand the benefits
of online customer engagement to their
business.
Over the past three years the Annual Online
Customer Engagement Survey has shown
that recognition of customer engagement has
been rising steadily. In this current economic
climate, companies are finding that their online
strategy will be vital in keeping their customers
engaged. Increasing long-term customer
value and providing them with quality rather
than quantity will be of highest importance.
Finding a way to speak to your customers
on a more individual level will mean greater
satisfaction and loyalty.
8
There is a whole range of possibilities to “It’s time to rally the troops and bring
engage your audience online. From social
networks to user generated content to rapidly
the fight to the C-Suites.”
expanding mobile technologies, there are Jim Sterne, p14
more and more ways to reach your customers.
Many of these are still largely untapped, and
are perfect opportunities to invest in for a
long-term competitive advantage.
The most valuable customers you can have
are those who know you have made an effort
to speak to them directly, and will happily
recommend your product/service to their
friends, colleagues and family.
Scott Dodds
General Manager Small and Midmarket Solutions
and Partners Group
Microsoft
Methodology and sample
 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009

Methodology and sample

Methodology Geography Figure 2

Almost 1,300 respondents took part in an
online survey1 over a five-week period in
September and October 2008.
Survey participants came from E-consultancy’s
user base, through our network of partners,
clients and agencies and via promotion across
a range of social media.
The majority of respondents are based in
the UK although there are also significant
numbers of respondents from the United
States, the rest of Europe and beyond.
Company (client-side or in-house):
The geographical spread of respondents is In which country/region are you based?
shown in Figure 2 and Figure 3 (right). More Base – all client-side respondents
than two thirds of company respondents (71%)
are UK- based. UK: 70.91% (273)
Europe (outside UK): 9.61% (37)
The agency sample is slightly more global,
North America: 9.61% (37)
with 37% of these respondents based
outside the UK. The survey was available in China: 1.04% (4)
four languages: English, Spanish, Greek and Other: 8.83% (34)
Chinese; in an attempt to make this research
as global as possible.

Respondent profiles
The vast majority of survey respondents Figure 1 Figure 3
work either for in-house teams (i.e. client-side What type of organisation do you work for? Agency (including consultants and technology suppliers):
organisations), or for external agencies Base – all respondents (1291) In which country/region are you based?
(including consultants and technology Base – all agency respondents
suppliers).
Part of an in-house team (client-side): 44.54% (575) UK: 63.05% (256)
For the purposes of this report, we have
External agency / supplier / consultant: 45.39% (586) Europe (outside UK): 11.08% (45)
carried out separate analysis for both these
Other: 10.07% (130) North America: 14.53% (59)
groups and the distinction is abbreviated
China: 0.99% (4)
to company (including not-for-profit
organisations) and agency. Other: 10.34% (42)

In total, 575 company respondents took

part in the survey, compared to 586 agency
participants. Company respondents were
asked to comment in respect of their own
organisations, while agencies were asked to
comment in terms of a typical client.

1
E-consultancy uses Clicktools for its online surveys.
9
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009

Company turnover Figure 4 Figure 6

Company: What is your annual company turnover? All respondents: In which business sector is your organisation?
Figure 4 shows the range in the size of
participating organisations, as defined by
Under £1 million: 11.08% (42) 20 A
company turnover. Approximately a third of
£1 -£10 million: 17.68% (67)
respondents (29%) work for companies with
Ch
annual revenues of £10 million or less. £10-£50 million: 12.40% (47)
£50-£150 million: 9.23% (35) Co
39% of those companies taking part have >£150 million: 29.55% (112)
a turnover of more than £50 million, of
Not relevant / don’t know: 20.05% (76)
15 En
whom nearly a third of respondents work
for companies with a turnover in excess of Fi
£150 million. FM
Agency respondents typically work for smaller G
10
organisations, with 45% of them representing
agencies with a turnover below £1 million H
[Figure 5].
20 Automotive: 1.30% (5) Ph
Charity: 5.71%(22)
Figure 5 5 Consultancy / Marketing Services: 3.64% (14)
Pr
Business sector Agency: What is your annual company turnover? 15 Entertainment: 5.19% (20) Pu
Financial services: 15.06% (58)
The best represented sectors are financial Pu
FMCG / CPG: 1.56% (6)
services, retail, travel and publishing [Figure 6]. Under £1 million: 45.14% (181)
10 Gaming: 0.26% (1)
£1 -£10 million: 29.93% (120) Re
0 Healthcare: 1.56% (6)
£10-£50 million: 8.23% (33)
Pharmaceuticals: 0.52% (2) Te
£50-£150
20 million: 2.74% (11)
5 Automotive: 1.30% (5) Property: 0.52% (2)
>£150 million: 4.74% (19)
Charity: 5.71%(22) Public Sector: 5.71% (22) Tr
Not relevant / don’t know: 9.23% (37) Publishing: 8.83% (34)
Consultancy / Marketing Services: 3.64% (14)
U
15 Entertainment: 5.19% (20) Retail: 12.99% (50)
0
Financial services: 15.06% (58) Telecoms / mobile phones: 4.16% (16) O
FMCG / CPG: 1.56% (6) Travel: 9.35% (36)

10 Gaming: 0.26% (1) Utilities & Energy: 1.30% (5) O

Healthcare: 1.56% (6) Other manufacturing: 3.38% (13)
Pharmaceuticals: 0.52% (2) Other: 18.96% (73)

5 Property: 0.52% (2)

Public Sector: 5.71% (22)
Publishing: 8.83% (34)
Retail: 12.99% (50)
0
Telecoms / mobile phones: 4.16% (16)
Travel: 9.35% (36)
10 Utilities & Energy: 1.30% (5)
Other manufacturing: 3.38% (13)
 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009

Findings

11
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
Findings
Customer engagement strategy
Importance of customer engagement
Figure 7 shows that customer engagement
continues to be of key importance, with
slightly more respondents saying that it is
essential than last year. The overwhelming
majority of client-side respondents say that
customer engagement is important (35%) or
essential (52%) to their organisations.
Only 1% of respondents feel that it is not
important, reflecting the growing shift
towards putting the customer at the heart of
business strategy.
From the agency perspective, approximately
84% of agencies (compared to 82% last year)
feel that customer engagement is essential
or important, emphasising the underlying
message that customer engagement
continues to be a critical component of
organisational strategy.
12
Figure 7
Company: How important is customer engagement to
your organisation? (2008)
Essential: 52.27% (242)
Important: 34.77% (161)
Nice-to-have: 11.45% (53)
Not important: 1.30% (6)
Don’t know / not relevant: 0.22% (1)
Figure 8
Agency: Typically, how important is online customer
engagement for your clients?
Essential: 43.27% (196)
Important: 40.62% (184)
Nice-to-have: 13.47% (61)
Not important: 2.21% (10)
Don’t know / Not relevant: 0.44% (2)
The overwhelming majority of client-side
respondents say that customer engagement
is important (35%) or essential (52%) to their
organisations.
From the agency perspective, approximately
84% of agencies (compared to 82% last year)
feel that customer engagement is essential or
important.
Do you have a defined customer
engagement strategy?
Whilst the importance of customer
engagement is widely acknowledged,
less than half of organisations (42%) have
a defined customer engagement strategy in
place. It is clear that whilst brands understand
that customer engagement is important,
many companies are still unsure about how
to implement a coherent and practical plan
of attack.
From the agency point of view, fewer than
a third (just 26%) say that their clients have
what they would call a defined customer
engagement strategy in place, suggesting
a difference of opinion between companies
and agencies about what constitutes
a defined strategy in this area.
 COMMENT

Andy Beal
Customer engagement takes center stage
Figure 9 in economic downturn
Company: Does your organisation have a defined
customer engagement strategy? Over the last 12 months, a lack of budget and time (45%) was cited
as the biggest barrier to starting a customer engagement campaign.
Ironically, as budgets have tightened further – ahead of tougher
Yes: 42.30% (195)
economic times – those same businesses are increasing their focus in
No: 51.41% (237)
this area, with 41% naming the worsening economy as the catalyst for
Don’t know / not relevant: 6.29% (29)
spending more resources on customer engagement.
Less than half
of organisations It is worth noting exactly which channels businesses have the most
(42%) have a faith in to help them achieve their customer engagement goals. While
defined customer 37% of respondents plan to invest in blogging, user-generated content,
engagement and social networks, it’s email newsletters that will receive the greatest Andy is considered
strategy. investment (59%) over the coming year. Not that other channels aren’t one of the world’s
valuable at building customer engagement, it’s simply a case that leading experts in
email marketing shows the highest ‘tangible improvement’ in customer
online reputation
engagement – with 69% of respondents able to measure a benefit
management. He
from the use of email. Perhaps this is more of a statement about the
effectiveness of measuring customer engagement using social media, is the co-author
Figure 10 than a statement about social media itself. of Radically
Agency: Do your clients typically have a defined Transparent:
online customer engagement strategy? Ensuring customers are satisfied with Monitoring
their experience is the most important metric and Managing
Yes: 26.00% (117) to follow over the coming months. Reputations Online
No: 68.44% (308)
and founder of
Don’t know / not relevant: 5.56% (25) So what data points will businesses find most valuable in measuring the
online media
success of their customer engagement efforts? Not surprisingly, almost
47% of respondents favour ‘customer satisfaction’ as the most important
monitoring service
metric to measure – easily beating the 37% who keep a close eye on the Trackur.com
actual transactions that take place on their web site. Why the focus on
customer satisfaction and not customer sales? As customer purse strings andybeal.com
are tightened all around the world, few companies will have the luxury
of reporting increases in customer sales. Instead, ensuring customers
are satisfied with their experience is the most important metric to
follow over the coming months. Those companies that can keep their
customers happy during these difficult times will be well placed to enjoy
tremendous growth, once our economy starts to recover.

13
COMMENT
Jim Sterne
Online marketing working. Senior managers sleeping
It’s a love hate relationship. We love the
technology, we love the results, but we hate the
fact that upper management still doesn’t get it.
87% of companies found customer
engagement essential or important and
11% thought it would be nice to have. The
other four people must work for (fill in your
least-liked brand here). But even with 98%
agreeing that customer engagement is a good
Jim has written
thing, 57% have still not defined their online
eight books on engagement strategy. We know the house is
using the Internet burning, we just can’t be bothered to call the
fire brigade. The fault? Mid-level committees
for marketing,
and senior management.
produces
the eMetrics Not knowing how your
Marketing customers perceive you is
Optimization
almost as bad as not knowing
Summit and is
how they acquire those
Chairman of the
perceptions.
Web Analytics
Association.
55% of companies don’t know how many
touch points they have, ‘need to start’ mapping
emetrics.org customer experiences to obtain a single view
of the customer or didn’t understand the
question. Customer engagement happens
through customer touch points. Not knowing
how your customers perceive you is almost as
bad as not knowing how they acquire those
perceptions. The fault? Corporate silos and
insulated departments acting independently.
14
It’s reassuring to see that email is still king
(60% anticipate an increase in email spend
in the next 12 months). It’s also reassuring
to have one’s beliefs confirmed that mobile
is still very young (77% don’t do and /
or are not planning on doing any mobile
marketing). It is nevertheless infuriating
that we are so late to the adoption game.
How many more ROI stories, case studies
and actual results are required to push past
our lack of budgets to do the job decently?
52% said budgets were the problem
compared to 31% (the next highest
category) who suggested technology was
problematic.
It’s time to rally the troops and bring
the fight to the C-Suites. This time, it’s
not about faith and conviction but about
demonstrable results and competitive
edge. We now have the means to
show how online marketing lifts brand
awareness, brings more customers to the
table, lowers costs and increases customer
satisfaction.
Interest in customer engagement
Organisations focus on customer engagement
for a variety of reasons, but it is clear from
Figure 11 that the essence of customer
engagement is about creating relationships
which result in value both for customers and
for organisations.
Asked about their organisation’s interest
in online customer engagement, 38% of
respondents said that it was about increasing
long-term customer value while 34% said that
it was about increasing value delivered to the
customer.
Respondents, who were able to check up to
three options, were also likely to indicate that
customer engagement is a way of deepening
and enriching their product or service offering
(29%) and a method for gaining customer
insight (28%).
Only 2% of responding organisations said
a major interest was insulating against a
troubled economy. This shows that very few
companies are seeing improved customer
engagement explicitly as a way of dealing
with the economic downturn. This may partly
be because companies have not yet been
severely affected by the credit crunch, but
also because protection against recession is
a possible benefit of customer engagement
rather than a principal driver of their
endeavours in this area.
Long-term customer value also emerged as
the benefit of customer engagement most
likely to be of interest to agencies’ clients.
Slightly more agency respondents (32%
compared to 28% of company respondents)
mentioned gaining customer insight as a key
reason for their clients’ interest.
Increasing market share was mentioned by
30% of agencies, although this was lower
down the list of priorities for responding
organisations (cited by 25% of company
respondents).
Similarly, the use of customer engagement to
increase short-term conversions was cited by
just over a quarter of agencies (26%) but only
16% of company respondents.
38% of respondents
said that it was about
increasing long-term
customer value while
34% said that it was about
increasing value delivered
to the customer.
 COMMENT

Pete Mortensen
When the customer talks back
Figure 11 Figure 12
Company: Which of the following* best describe your Agency: Which of the following* best describe your Years from now, I think we’ll look back and remember 2008 as the
organisation’s interest in online customer engagement? clients’ interest in online customer engagement? year when big business realised that pretending to be interested in its
customers wouldn’t cut it anymore. As so often happens with change,
40 35 it seems that
Strengthening one minute
emotional no one
investment understood
in their the point
brand: 21.78% (98) of connecting
Strengthening emotional investment in your brand: 24.78% (113)
directly to consumers, and the next, everyone was doing it.
35 Increasing value delivered to the customer: 33.77% (154) Increasing value delivered to the customer: 28% (126)
30 Just consider how laughable it would have been a year ago if
Reducing acquisition costs: 21.05% (96) Reducing acquisition costs: 21.56% (97)
I had proclaimed that the biggest breakthrough in online customer
30
25
Increasing short-term conversions: 16.45% (75) engagement
Increasing would
short-term be the tax
conversions: preparation
26.22% (118) company H&R Block
25 launching a Twitter feed. Or how unlikely it would have looked to predict
Deepening and enriching your product or service offering: 28.95% (132) Deepening and enriching their product or service offering: 22.22% (100)
that a source of a turnaround at Starbucks would come from a high-tech Pete is the
20
20 Adjusting to the increased importance and power of the customer: 10.53% Adjusting to the increased
suggestion
(48) box. Couldimportance
anyone andhave
powerannounced
of the customer: 10.67%
without (48)
smirking that communications
15
Increasing long-term customer value: 38.16% (174)
companies outside of the technology sector would not only create social
Increasing long term customer value: 32.67% (147) lead for Jump
networking strategies, but that they would become essential components
15
Gaining customer insight: 31.78% (143)
Associates and is
Gaining customer insight: 28.29% (129) to their competitive approach?
10 the co-author of
10 Insulating against a troubled economy: 1.75% (8) Insulating against a troubled economy: 6.00% (27)
The driving force here is the eroding effectiveness of traditional Wired to Care: How
5
Increasing market share: 24.78% (113) advertising.
Increasing marketInshare:
an always-on
29.56% (133)world, multi-million dollar spots on TV don’t Companies Prosper
5
have anywhere near the power that a zero-budget viral video could.
Improved employee satisfaction: 5.48% (25) Improved employee satisfaction: 3.78% (17) When They Create
People have learned to tune out ads that are imposed upon them, and
0 0
Enhanced
seek outpublic profile: 18.89%
corporate (85)connect with them. What we are seeing in
ideas that Widespread Empathy
Enhanced public profile: 19.96% (91)
the slow emergence of electronic connections between producers and from FT Press.
Strengthening emotional35investment in your brand: 24.78% (113) Strengthening
Reduced customer emotional
service investment
costs: 17.98% in their
(82)brand: 21.78% (98) Reduced customer service costs: 18.00% (81)
consumers is the dawning realization that the best way to build customer
Increasing value delivered to the customer: 33.77% (154) Increasing value delivered to the customer: 28% (126)
Improving
loyalty business predictability:
ideas7.78% (35) new products – is to really
30 Improving business predictability: 5.48% (25) – and discover for great jumpassociates.com
Reducing acquisition costs: 21.05% (96) Reducing acquisition costs: 21.56% (97) understand who customers are as people.
Other: 2.85% (13) Other: 1.78% (8)
Increasing short-term conversions:
25 16.45% (75) Increasing short-term conversions: 26.22% (118)
In other words, these electronic seedlings that have grown up into
Deepening and enriching your product or service offering: 28.95% (132) Deepening and enriching their product or service offering: 22.22% (100)
20 mighty oaks in the last year are a starting point and a call to action.
Adjusting to the increased importance and power of the customer: 10.53% (48) Adjusting to the increased importance and power of the customer: 10.67% (48)
H&R Block has very rapidly become a beloved brand online because its
Increasing long-term customer
15 value: 38.16% (174) Increasing long term customer value: 32.67% (147) tax specialists are now available to help anyone with their tax questions
Gaining customer insight: 28.29% (129) Gaining customer insight: 31.78% (143) free of charge. Now, just imagine what the company could do if it really
10
Insulating against a troubled economy: 1.75% (8) Insulating against a troubled economy: 6.00% (27) knew what was going on in the lives of the people asking beyond what
Increasing market share: 24.78%
5 (113) Increasing market share: 29.56% (133) they can fit into a 140-character tweet.
Improved employee satisfaction: 5.48% (25) Improved employee satisfaction: 3.78% (17) Business today is reconnecting with people in ways big and small to
0
Enhanced public profile: 19.96% (91) Enhanced public profile: 18.89% (85) propel through the tough economic times we find ourselves in. They
Reduced customer service costs: 17.98% (82) Reduced customer service costs: 18.00% (81) would do well to focus increasingly more on the big. Because in a few
Improving business predictability: 5.48% (25) Improving business predictability: 7.78% (35) years, you might look up, and see that everyone else is doing it too.
Other: 2.85% (13) Other: 1.78% (8)

* Respondents could check up to three options

15
COMMENT
Ian Jindal
Sustaining profitability in a challenging retail climate
Retail appears a simple business, in which
the extent of a customer’s ‘engagement’
can be measured by their spend with you.
The challenge – especially in the current
climate – is conversion: converting browsers
to purchasers (without simply ‘buying their
customer with ever-deeper discounts’), and
thereafter purchasers to retained, profitable
customers.
Ian is a consultant,
There is a fundamental trinity at the heart
corporate advisor of ecommerce: product, price and service.
and publisher, No sales are possible if you don’t have an
focusing upon appropriate product for a customer. Once the
product is presented, the customer will balance
eCommerce
price and service promise (for example,
in retail and preferring a slightly more expensive ‘in-stock’
publishing. item to a piece of out-of-stock ‘vapourware’, or
the implied reliability of a multichannel retailer
with a reputation and return-to-store).
ianjindal.com
Customer engagement:
wrapping your activities around
a conception of a profitable
and sustained interaction.
So much for the first purchase. The second
purchase will be driven by the same
criteria, but with the important overriding
consideration of ‘performance’. Did the
product match its claims? Was your service
level as promised? How did your team
deal with queries? Did follow-up marketing
match the tone and offer to the customer’s
experience, expectations and desires?
16
Here we have the difference between
old-school marketing (persuading the
customer to empty your warehouse)
and customer engagement (wrapping
your activities around a conception of
a profitable and sustained interaction).
customer engagement should inform the
design and operation of every facet of
your activities – from planning through
‘conversion’ to reactivation, or ‘continuing
service’, as we should term it.
The survey response illustrates the rich
range of mechanisms and initiatives in
this field, but it’s heartening to see a trend
towards customer engagement as a way
of integrating marketing approaches
to a customer and a convergence upon
measures such as profit and ROI rather
than ‘engagement’ as some end in itself.
Customer engagement can provide a
framework to focus activity upon sustained
profitability, and in a challenging retail
climate one could ask for no better goal.
Behaviour of an engaged customer
Participants were asked to indicate up to three
attributes of an engaged customer which
they considered most important to their
organisations over the next year.
The attribute seen as most important
is recommends product, service or brand,
deemed to be a top-three descriptor by 58%
of company respondents and 54% of agency
respondents [Figure 13 and Figure 14].
As Fred Reichheld argues in The Ultimate
Question2, the propensity of a customer
to make a recommendation provides
marketers with a valuable metric which
can be correlated to business performance,
allowing organisations to view customer
recommendation as a driver of growth and
profitability. The Net Promoter Score (NPS) is
a good example of this.
Other attributes of engaged customers
regarded as very important are:
• They are more likely to convert
more readily (44%)
• They purchase regularly (36%)
• They are less likely to switch supplier (30%)
Companies are also recognising the
importance of engaging in dialogue with their
customers. Just over a quarter of respondents
(26%) say that participating in online
communities and support groups will be an
important attribute over the next 12 months,
while 23% acknowledge the importance of
getting regular feedback.
2
The Ultimate Question by Frederick F. Reichheld. www.theultimatequestion.com/
It is clear that Web 2.0 has led to increased
customer empowerment and amplified the
voice of customer more than ever before. But
despite the growing importance of customer
empowerment, only 13% cite participation
in innovation and design as one of the three
most important attributes.
Co-creation (as first coined by C.K. Prahalad
to describe collaboration by organisation
and customer for the creation of mutual
value) provides a lucrative opportunity to
drive innovation and creativity, yet it is clear
that too many companies are still adopting a
top-down approach. Whilst more companies
are starting to employ crowdsourcing
techniques as a means to drive innovation,
this approach has not yet hit the mainstream.
Only 10% of company respondents say that
the propensity of an engaged customer to
be less reactive to a troubled economy is a key
attribute. It seems that not many companies
are seeing customer engagement as a crucial
attribute for shielding them against the
impact of the recession.
On the same theme, 17% of respondents
believe that less focus on price is a crucial
attribute. Given that many organisations will
not want to compete through price-slashing,
an alternative strategy is to create sustainable
competitive advantage and long-term value
by differentiating through the customer
experience.
The extent to which companies will actually
need to cut their pricing depends on a
company’s positioning in the marketplace and
the price elasticity of their product or service.

Figure 13
Company: Which of the following attributes* of an engaged customer are likely to be most
important to your organisation in the next 12 months?
60
Purchases regularly: 35.89% (164)
Provides feedback regularly: 22.76% (104)
50
Recommends product, service or brand: 58.21%
(266)
40 Participates in innovation and design: 12.69% (58)
Participates in online communities or support
30 groups: 25.60% (117)
Is less focused on price: 17.29% (79)
20 Is more tolerant of mistakes: 5.03% (23)
Converts more readily: 43.98% (201)
10 Is less likely to switch supplier: 29.98% (137)
Is less reactive to a troubled economy: 10.28% (47)
0 Other: 3.50% (16)
Figure 14
Agency: Which of the following attributes* of an engaged customer are likely to be most
important to your clients in the next 12 months?
60 Purchases regularly: 46.99% (211)
Provides feedback regularly: 20.49% (92)
50
Recommends product, service or brand: 53.90%
(242)
40 Participates in innovation and design: 10.91% (49)
Participates in online communities or support
30 groups: 20.94% (94)
Is less focused on price: 18.26% (82)
20 Is more tolerant of mistakes: 4.01% (18)
Converts more readily: 48.33% (217)
10
Is less likely to switch supplier: 37.64% (169)
Is less reactive to a troubled economy: 8.24% (37)
0
Other: 1.34% (6)
* Respondents could check up to three attributes of an engaged customer
Martha Russell
Engagement pinball
A political parody racked up a big score
in engagement pinball when Tina Fey
portrayed US Republican Vice Presidential
candidate, Sarah Palin, on September
26, 2008 on the American comedy show,
Saturday Night Live. Overnight, video clips
of the comedy skit were posted by both
consumers and CBS, generating millions of
downloads through YouTube. Like a silver
ball shooting through a pinball machine,
the fusion of topics, events, and people
scored engagement at contact points
on television, blogs, social media, email,
phone calls, hallway chats, and dinner
conversations.
The silver ball must be
kept in play by continually
providing another round of
experiences.
The ‘ball’ hit the payload when 9.7 million
people watched the NBC Saturday Night
Live skit. Over 25 million YouTube
downloads were accompanied by millions
of blog postings in the first few days
following the TV broadcast. By the time
Governor Palin appeared in the Vice
Presidential Debate on October 2nd, TV
audience for the debate across all channels
topped 70 million.
The challenges for engagement architects
include gaining management support as
well as customer attention. Both the Third
Annual cScape Customer Engagement
Survey and my spring 2008 study of
experiential marketing, point to a desire
COMMENT
for marketing efforts to produce personal
experiences that give customers knowledge of
a brand’s relevance to their life. Both agency
and company professionals expect engaging
experiences will produce attention, affection
and actions that will endure to produce trial
and sustain loyalty. The wild cards are the
risks. These include the risks of off-target
or negative word-of-mouth in consumer-
generated-content, as well as uncontrollable
Martha is Associate
and hard-to-control factors in implementing
interactive experiences. In truth, engagement Director of Media X,
scores multiply when customers act on and and Senior Research
speak about their involvement. Influence is an Scholar in Human
active process. Many decision makers want to Sciences Technology
minimize risks.
Advanced Research
Institute, at Stanford
It turns out there is no shortcut to trust, loyalty
or reputation. However, personal involvement University. She
and experiential marketing can provide high- studies innovation
scoring plays in the engagement pinball game.
diffusion and digital
To leverage this, the silver ball must be kept in
play by continually providing another round of content as context
experiences that sometimes activate the same, for associated contact
sometimes activate new customer contact points.
points. And, importantly, the message must be
consistent and relevant in context.
mediax.stanford.edu
Competitive marketers who want to play
engagement pinball must do more than
periodically punch the flippers on the board.
There are many ways to build score. Keeping
the ball in play requires understanding the ball
(the customer), the board (relative value of
available contact points) and, importantly, fast
response to keep the play active. All senses
must be activated! Relevance is a multiplier.
High score still wins!
17
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009

Over a third of agencies (35%) report that their clients are not very advanced
at mapping customer touch-points.

Mapping customer experiences Figure 15 Customer engagement and the

Figure 15 shows the extent to which
companies are mapping customer
experiences in order to obtain a single view
of the customer.
There hasn’t been a radical improvement
since 2006 but the proportion of companies
who are either not very advanced or not doing
this at all has decreased from 60% to 52%.
But this still remains a problem area for more
than half of the organisations surveyed.
Only 3% of companies report that they are
very advanced at mapping while 41% say that
they are quite advanced.
For a variety of political, cultural and technical
reasons, many organisations have struggled
to provide a seamless experience for the
customer. The ability of some companies to
do this well, sometimes because they have
started from scratch with the customer at
the heart of their proposition, has increased
pressure on other organisations to get
this right.
Agency responses to this question, show that
over a third of agencies (35%) report that their
clients are not very advanced at mapping
customer touch-points to obtain a single view
of the customer, and a further 18% say that
they need to start doing this.
Company: How advanced are you at mapping customer
experiences to obtain a single view of the customer?
Very advanced (we know all our customer
touch-points): 3.29% (15)
Quite advanced (we know most of our customer
touch-points): 41.45% (189)
Not very advanced (we don’t even know how many
Companies are
touch-points we have): 35.31% (161)
either taking an
We need to start doing this: 17.11% (78)
‘ostriches’ or ‘owls’
approach to the Don’t know / not relevant: 2.85% (13)
current economic
climate.
Figure 16
Agency: Typically, how advanced are your clients at mapping
customer experiences to obtain a single view of the customer?
Very advanced (we know all our customer
touch-points): 3.29% (15)
Quite advanced (we know most of our customer
touch-points): 41.45% (189)
Not very advanced (we don’t even know how many
touch-points we have): 35.31% (161)
We need to start doing this: 17.11% (78)
Don’t know / not relevant: 2.85% (13)
troubled economy
Impact of the economic downturn
The sample of organisations surveyed for
this report is split in terms of whether they
are paying more attention to customer
engagement as a result of the economic
situation.
Under half of respondents (41%) said that
their organisations were now placing more
emphasis on customer engagement, but 41%
said this was not the case.
It is apparent that companies are either taking
an ‘ostriches’ or ‘owls’ approach3 to the current
economic climate, with some companies
seemingly in denial about the increased
importance of customer engagement during
a recession.
Forward-thinking organisations will need to
gain greater insight around how customer
behaviour will be shaped by the current
economic situation and what they can do to
strengthen customer relationships.
Differentiating the customer experience
will enable companies to secure sustainable
long-term competitive advantage, and this
necessitates placing more emphasis on the
importance of customer engagement.

3
www.e-consultancy.com/news-blog/366490/owls-will-beat-the-recession-ostriches-won-t.html
18
 COMMENT

Eric Peterson
We (still) need a standard measure for
engagement, perhaps more than ever!
Figure 17 The fact that Third Annual cScape Customer Engagement Survey
Company: Has a worsening economic situation caused your reports that 42 percent of companies have a defined online customer
organisation to place more emphasis on customer engagement? engagement strategy is great news but is somewhat troubling given
the diversity of opinions regarding how customer engagement should
actually be measured. In last year’s survey my good friend, Mr Jim
Yes: 40.52% (171)
Sterne, commented on the difficulty we have as an industry defining
No: 41.71% (176)
what we mean by the term ‘engagement’ and was spot on. Some
Don’t know / not relevant: 17.77% (75)
of us don’t believe that engagement can be measured at all, others
believe engagement is similar to U.S. Justice Potter Stewart’s view on
Differentiating pornography (“I know it when I see it.”), while still others believe that
Eric is a strategic
the customer engagement can be measured using a combination of qualitative and
experience quantitative input readily available in the digital channel. business consultant
will enable advising businesses
If we as an industry struggle to define the basis for measurement, how is
companies to around the globe
secure sustainable it possible that so many companies are able to think strategically about
improving customer engagement? More than likely the hype surrounding on their use of
long-term
web analytics
competitive the subject has driven companies to cobble together plausible sounding
advantage. initiatives but they have done so in a measurement vacuum. If this is technology, as
the case, it is even more interesting that so many companies are able to well as the author
Figure 18 report tangible improvements in online customer engagement associated
of Web Analytics
Agency: Has a worsening economic situation caused your with specific tactical efforts like micro-blogging, user contributed
clients to place more emphasis on customer engagement? Demystified, Web
content, and rich interactive applications.
Site Measurement
Yes: 41.19% (180) Hype... has driven companies to cobble together Hacks and The
No: 35.01% (153) plausible sounding initiatives but they have done Big Book of Key
Don’t know / not relevant: 23.80% (104) so in a measurement vacuum. Performance
Indicators.
My hope for the coming year is that the measurement industry can come
together and adopt a standard definition of engagement, one that can be webanalytics
practically applied so that when we ask ‘what drives engagement?’ the
demystified.com
answers are grounded in such a way that we can compare results across
sites, across technologies, and across audiences. Nobody questions the
need to engage our customers and prospects, but the time has come for
a common context when doing so.

19
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009

Satisfaction metrics together with transactional data are viewed as critical

for developing customer insights.

Customer data collection Figure 19 Figure 20

Company: Which of the following types of customer data* Agency: Which of the following types of customer data* do
Respondents were asked to indicate up to three do you believe will be most useful for developing customer you believe will be most useful to your clients for developing
sources of data which they thought would insights during an economic downturn? customer insights during an economic downturn?
be useful for developing customer insights
during an economic downturn [Figures 19 &
20]. Almost half of company respondents (47%) 50 50 complaints : 19.67% (83)
Customer Custome
said that customer satisfaction information Offline behaviour
would be useful for this purpose. data was deemed Customer praise: 7.58% (32) Custome
to be among
Transactional data was cited by 37% of 40 Customer
40 satisfaction: 47.39% (200) Custome
the three most
companies surveyed. Its relatively high important Customer feedback on competitors Custome
importance comes as no surprise as companies information
products or services: 19.67% (83) products
will be closely monitoring how the economic sources by only
30 30
situation impacts on customer spending. 9% of respondents. Customer-generated ideas for Custome
Previous online behavioural data was reported 50 50(83)
Customer complaints : 19.67% products / services: 22.99% (97) Customer complaints: 19.77% (86) products/
as being useful by 30% of companies surveyed. Customer praise: 7.58% (32) Customer praise: 5.06% (22)
20 Lifestyle
20 data: 20.14% (85) Lifestyle d
This information can enable organisations
40 Customer satisfaction: 47.39%
40(200) Customer satisfaction: 40.23% (175)
to analyse how customer behaviour evolves Data on customers’ personal values Data on c
Customer feedback on competitors Customer feedback on competitors
during the downturn and respond accordingly. and beliefs: 15.40% (65) and belie
products or services: 19.67% (83) products or services: 24.37% (106)
30 10 30 10
In contrast, previous offline behaviour data was Customer-generated ideas for Previous online behaviour data: Customer generated ideas for Previous
deemed to be among the three most important products / services: 22.99% (97) products/ services: 22.99% (100)
29.86% (126) 28.74%
information sources by only 9% of respondents. 20 Lifestyle data: 20.14% (85) 20 Lifestyle data: 17.01% (74)
0 Demographic
0 data: 18.72% (79) Demogra
Declared customer preferences and customer- Data on customers’ personal values Data on customers’ personal values
generated ideas for products / services were and beliefs: 15.40% (65) and beliefs: 22.99% (100)
10 10 Transactional data: 36.73% (155) Transacti
cited as being useful by 27%50and 23% of Customer complaints : 19.67%50
(83) Previous online behaviour data: Customer complaints: 19.77% (86) Previous online behaviour data:
respondents respectively. Customer praise: 7.58% (32)
29.86% (126) Declared customer preferences: 28.74% (125) Declared
Customer praise: 5.06% (22)
0 Demographic data: 18.72% (79)
0 26.54% (112) Demographic data: 17.47% (76) 28.74%
The agency perspective on 40
the relative Customer satisfaction: 47.39%40
(200) Customer satisfaction: 40.23% (175)
importance of different types of data during Customer feedback on competitors
Transactional data: 36.73% (155) Previous Customer
offline behaviour data:
feedback on competitors
Transactional data: 35.40% (154) Previous
an economic downturn was similar to that of products or services: 19.67% (83) Declared customer preferences: 9.24% (39)
products or services: 24.37% (106) Declared customer preferences: 13.79%
companies themselves. 30
Customer-generated ideas for
30 26.54% (112) 28.74% (125)
Customer generated ideas for
products / services: 22.99% (97) Previous offline behaviour data: Other: 1.66% (7)
products/ services: 22.99% (100) Previous offline behaviour data: Other: 2.
It is clear that satisfaction metrics together 9.24% (39) 13.79% (60)
with transactional data are20 viewed as critical Lifestyle data: 20.14% (85) 20 Lifestyle data: 17.01% (74)
Other: 1.66% (7) Other: 2.99% (13)
for developing customer insights. Data on customers’ personal values Data on customers’ personal values
and beliefs: 15.40% (65) and beliefs: 22.99% (100)
10 10
Previous online behaviour data: Previous online behaviour data:
29.86% (126) 28.74% (125)
* Respondents could check up to three options
20 0 Demographic data: 18.72% (79)0 Demographic data: 17.47% (76)
Transactional data: 36.73% (155) Transactional data: 35.40% (154)

Over a third of respondents (36%) say that the desire for simplicity
needs to be addressed in the next 12 months.
Changing customer behaviour
and attitudes
Perhaps predictably, sensitivity to price is the
type of customer behaviour which company
respondents feel that they will most likely
need to address over the next 12 months
[Figure 21].
Nearly half of companies surveyed (48%) say
that this is among the five most significant
behavioural traits. This is consistent with
other research4 by E-consultancy which shows
that customers will increasingly turn to price
comparison sites in the next few months.
As the global economic crisis worsens,
thriftiness in spending will no longer be a
choice, but rather a necessity for many people.
Coupled with price sensitivity, prolonged
decision-making will also become a significant
type of behaviour which needs to be
addressed, as suggested by 31% of companies
and 38% of agencies.
However, not everyone will want to spend
all their time making decisions about the
cheapest things to buy, or whether they
actually need to make a purchase. Focus on
quality is also seen as something which will
become more evident, with 45% of company
respondents saying they need to address this.
4
Online Shopping and Credit Crunch Report 2008.
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
Even more than they want to buy cheaply, Some believe that the luxury sector will Figure 21
more customers will ensure they are getting face a temporary downturn as consumers Company: Which of the following behaviours and
the best value, even if that means paying cut back spending on high-end goods and attitudes* do you expect your organisation will need to
more for products and services. services. A large swathe of people working in address in the next 12 months?
financial services will not have the same levels
Companies also need to consider how more of disposable income – and bonuses – as in
people are likely to be “trading up and down”, previous years.
50 Sensitivity to
and how this will affect them.
On the other hand, the downturn is Prolonged de
Although some consumers will take a longer unexpected to affect the super-rich, who
31.12% (131
term view about what represents value, will continue to indulge as normal while, 40
others will be in crisis mode and live more on counter-intuitively, others who can’t really Focus on qua
a hand-to-mouth basis. Just over a quarter of afford it could also indulge in luxury
Intolerance of
respondents (27%) say that their organisations purchases as a way of denying that they are
30
will need to address an increased focus on affected by the crisis.
32.07% (135
short-term needs.
50
From the agency perspective, sensitivity to
Sensitivity to price: 48.22% (203) Sacrifice (fam
Just over a third of respondents (36%) say that price is seen as being even more important,
20
Prolonged decision-making:
Lack of suppl
the desire for simplicity needs to be addressed reported as a significant behaviour by 62% 31.12% (131)
40 30.17% (127
in the next 12 months. The desire for simplicity of respondents.
Focus on quality: 44.89% (189)
is shaped by the need for consumers to
Intolerance of poor customer service: Desire for sim
establish a feeling of control, both over their Slightly fewer agencies (34%) than companies
30 10 32.07% (135)
finances and their long-term future. (30%) report that a lack of brand loyalty will Buying and se
shape the next wave of consumer behaviour, Sacrifice (family first etc.): 7.36% (31)
Customers will seek out brands that they can 4.75% (20)
as customers increasingly choose price 20 Lack of supplier/brand loyalty:
trust to deliver goods and services reliably. over brand loyalty as a basis to differentiate
0 30.17% (127) Purchase of lu
Companies will need to ensure that they are between rival competitors.
Desire for simplicity: 36.34% (153) items: 8.79%
focused on best-in-class customer service, and
50
10
it can be seen that 32% of respondents say Sensitivity to price: 48.22% (203) Buying and selling second-hand:
Buying own-b
4.75% (20)
that increased intolerance of poor customer Prolonged decision-making: 7.13% (30)
service is prominent on their radar. 0 31.12% (131) Purchase of luxury and indulgent
40
items: 8.79% (37)
Focus on quality: 44.89% (189) Focus on shor
Just 9% of company respondents believe that
Buying own-brand products: 27.08% (114
the purchase of luxury and indulgent items Intolerance of poor customer service:
7.13% (30)
30 32.07% (135)
within the next 12 months will be a significant Other: 4.28%
Focus on short-term needs:
factor for them. Sacrifice (family first etc.): 7.36% (31)
27.08% (114)
20 Lack of supplier/brand loyalty:
Other: 4.28% (18)
30.17% (127)
Desire for simplicity: 36.34% (153)
10
Buying and selling second-hand:
4.75% (20)
* Respondents
Purchasecould checkand
up indulgent
to three options
0 of luxury
items: 8.79% (37)
21
 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009

Figure 22 Tactics and initiatives In spite of the questions raised over the engagement, 38% of companies anticipate
Agency: Which of the following behaviours and attitudes* do you profitability or return on investment from greater investment in this area in the future.
expect your clients will need to address in the next 12 months? Ways of improving engagement and Web 2.0 features and functionality, a quarter
of company respondents (25%) and just under In terms of spending over the next 12 months,
80 areas of investment there will be most investment in email
Sensitivity to price: 61.84% (269) a third of agencies (31%) report that blogging
The overwhelming majority of companies has tangibly improved customer engagement. newsletters, with 59% of respondents saying
surveyed (69%)decision-making:
Prolonged agree that email newsletters that their organisations will increase their
70 Similarly, 23% of company respondents and spending in this area [Figure 24].
have resulted(164)
37.70% in a tangible improvement in
customer engagement [Figure 23]. 30% of agencies report improvement in
engagement through brand presence on social Other components of Web 2.0 and social
60 Focus on quality: 37.47% (163)
This can partly be attributed to the fact that networks, whilst 21% of organisations mention media such as user ratings & feedback (41%),
industry-wide metrics for email marketing user-generated content. user-generated content (37%), blogging (36%)
50 Intolerance of poor customer service: and brand presence on social networks (36%)
(such as open rates and click-throughs) have
41.84%
been (182) enabling marketers to
long established, Despite the relative novelty of micro-blogging are also expected to attract significant sums
understand the impact of their efforts to the utilities such as Twitter, 7% of companies of investment in spite of oft-heard complaints
40 Sacrifice (family first etc.): have improved their customer engagement that it is not always easy to track ROI in some
80 Sensitivity to price: 61.84% (269) bottom line.
Prolonged decision-making:
11.49% (50) through this channel. This is a small of these areas.
70
30 37.70% (164)
Just under a third of respondents (30%) say percentage but a not insignificant number
that focused
Lack micro-sites,
of supplier on-site
/ brand video (brand-
loyalty: of businesses. In terms of the agencies surveyed,
60 Focus on quality: 37.47% (163)
created) and (147)
user ratings and feedback have respondents also rank email newsletters
33.79%
50 20 Intolerance of poor customer service:
resulted in better engagement. highly, with 60% of these respondents saying
41.84% (182) Areas of increased investment
Desire for simplicity: 36.55% (159) that this tactic has resulted in tangible
40 Sacrifice (family first etc.): Given that user reviews not only enhance It is interesting to note that percentages customer engagement improvement. Slightly
10 11.49% (50)
credibility
30 Buyingfor online
and retailers,
selling but have also
second-hand: in Figure 24 are generally higher than in more agencies than clients (38% compared
Lack of supplier / brand loyalty:
been shown to boost conversion rates and Figure 23. Although there is a correlation to 30%) report better engagement resulting
33.79% (147) 4.83% (21)
average order values, it is not surprising that
20
0 between demonstrably improved customer from user ratings and feedback.
Desire for simplicity: 36.55% (159)
ratings and reviews feature prominently here5. engagement and increased spending, there
10
Sensitivity to price: 61.84% (269) Buying and selling second-hand: Purchase of luxury and indulgent Lucrative areas of growth within the next
are significant numbers of companies who
4.83% (21) Similarly,
items:in8.74%
the blink of an eye, on-site
(38) 12 months, from the agency perspective,
0 Prolonged decision-making: are investing in various areas without having
37.70% (164) Purchase of luxury and indulgent video has also quickly gone from being a include increased investment in brand
experienced a tangible uplift in customer
Focus on quality: 37.47% (163)
items: 8.74% (38) Buying own-brand products:
compelling differentiator to something which presence on social networks, online video and
engagement. This must be either because
Buying own-brand products: consumers expect.
8.74% (38) rich on-page interactive experiences.
Intolerance of poor customer service:
8.74% (38) they can’t measure the uplift or because they
41.84% (182)
are expecting benefits other than increased
Sacrifice (family first etc.):
Focus on short-term needs:
32.64% (142)
Focus on short-term needs: customer engagement.
11.49% (50)
Other: 2.07% (9)
32.64% (142)
Lack of supplier / brand loyalty: For example, although only 16% of
33.79% (147)
Other: 2.07% (9) respondents report that rich on-page
Desire for simplicity: 36.55% (159) interactive experiences have resulted in
Buying and selling second-hand: a tangible improvement in customer
4.83% (21)

Purchase of luxury and indulgent

items: 8.74% (38)
* Respondents couldproducts:
check up to three options 5
See also E-consultancy’s Social Commerce Report
22
Buying own-brand
8.74% (38)
 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009

Figure 23 Figure 24
Company: Have any of the following resulted in a tangible Company: In which of the following do you anticipate investment
improvement in your organisation’s online customer engagement? to increase online customer engagement over the next 12 months?

80 60 networks (e.g.Facebook):
Brand presence on social Brand presence on social ne
23.27% (84) 35.79% (141)
70
Just under a third 50
On-site video (brand-created): 29.92% (108) On-site video (brand-created
of respondents
(30%) say that 60 On-site video (user-created): 3.32% (12) On-site video (user-created):
focused micro-sites,
40
on-site video 50 Focused micro-sites: 30.19% (109) Focused micro-sites: 37.82%
(brand-created) 80
60 Brand presence on social networks (e.g.Facebook):
and user ratings
Brand presence on social networks (e.g.Facebook):
23.27% (84)
Email newsletters: 69.25% (250) 35.79% (141)
Email newsletters: 58.63% (
and feedback have 4070 30
50 On-site video (brand-created): 42.64% (168)
resulted in better
On-site video (brand-created): 29.92% (108)
On-site audio: 8.03% (29) On-site video (user-created): 14.21% (56) On-site audio: 12.94% (51)
engagement.
60 On-site video (user-created): 3.32% (12) 40 Focused micro-sites: 37.82% (149)
30 Focused micro-sites: 30.19% (109) Blogging: 24.65% (89) Blogging: 35.79% (141)
50
20 Email newsletters: 58.63% (231)
Email newsletters: 69.25% (250) 30

20
40 Micro-blogging utilities, e.g. Twitter: 6.65% (24) On-site audio: 12.94% (51) Micro-blogging utilities, e.g.
On-site audio: 8.03% (29)
Blogging: 35.79% (141)
30 20
Blogging: 24.65% (89)
Desktop-based applications
10 / widgets / gadgets: Desktop-based applications
Micro-blogging utilities, e.g. Twitter: 13.45% (53)
1020 Micro-blogging utilities, e.g. Twitter: 6.65% (24)
4.16% (15) 10 Desktop-based applications / widgets / gadgets:14.72% (58)
Desktop-based applications / widgets / gadgets: 14.72% (58)
10 4.16% (15)
Web-based widgets / 0badges / gadgets: 9.70% (35) Web-based widgets / badges / gadgets: 25.89% Web-based widgets / badge
0 Web-based widgets / badges / gadgets: 9.70% (35)
0 (102)
0 (102)
Brand presence on social networks (e.g.Facebook): Rich on-page Rich on-page interactive experiences:
60interactive experiences: 15.79% (57) 15.79%
Brand presence on social (57)
networks (e.g.Facebook): Rich on-page interactive experiences: 37.56% (148)
35.79% (141)
23.27% (84)
User ratings and feedback: 29.64% (107) User ratings and feedback: 40.86% (161) Rich on-page interactive exp
On-site video (brand-created): 29.92% (108) 50
Personalised messaging throughout the site:
User ratings and feedback: 29.64%
On-site (107) 42.64% (168)
video (brand-created):
Personalised messaging throughout the site:
On-site video (user-created): 3.32% (12) 10.53% (38) On-site video (user-created): 14.21% (56) 27.16% (107) User ratings and feedback: 4
User-generated
Personalised messaging throughout
40 content ( e.g. reviews, imagery): the site:
Focused micro-sites: 37.82% (149) User-generated content ( e.g. reviews, imagery):
Focused micro-sites: 30.19% (109)
21.05% (76) 10.53% (38) Email newsletters: 58.63% (231)
36.55% (144) Personalised messaging thro
Email newsletters: 69.25% (250)
30
Mobile communications: 10.25% (37) Mobile communications: 18.27% (72) 27.16% (107)
On-site audio: 8.03% (29)
User-generated content (On-site
User on-page customisation, e.g. BBC home page:
e.g. audio: 12.94% (51)
reviews, imagery): User on-page customisation, e.g. BBC home page:
Blogging: 35.79% (141)
Blogging: 24.65% (89) 3.88% (14) 20 21.05% (76) 14.97% (59) User-generated content ( e.g
Micro-blogging utilities, e.g. Twitter: 6.65% (24) Micro-blogging utilities, e.g. Twitter: 13.45% (53)
On-site branded communities / forums: 14.68% (53) 36.55% (144)
On-site branded communities / forums: 23.86% (94)
Desktop-based applications / widgets / gadgets: SMS service10
alerts: 10.53% (38) Mobile communications: Desktop-based
10.25% (37) applications / widgets / gadgets:
SMS service alerts: 14.97% (59)
4.16% (15) 14.72% (58)
Social knowledge sharing, e.g. wikis: 8.31% (30) Mobile communications: 18.
Social knowledge sharing, e.g. wikis: 16.24% (64)
Web-based widgets / badges / gadgets: 9.70% (35) 0 User on-page customisation, e.g.widgets
Web-based BBC/ badges
home/ gadgets:
page25.89%
:
Other: 2.22% (8) (102) Other: 2.79% (11)
Rich on-page interactive experiences: 15.79% (57) 3.88% (14) User on-page customisation
Rich on-page interactive experiences: 37.56% (148)
User ratings and feedback: 29.64% (107) 14.97% (59)
Personalised messaging throughout the site:
On-site branded communities / forums:
User ratings 14.68%
and feedback: (53)
40.86% (161)
23
10.53% (38) Personalised messaging throughout the site: On-site branded communitie
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009

Mobile marketing to enhance customer Figure 25 Figure 27

engagement
Only 5% of companies have a customer
engagement strategy which embraces the
mobile channel.
The results demonstrate that mobile
marketing continues to be the subject of
ongoing hype without much evidence of
investment.
The vast majority of respondents (78%)
report that their company is not doing any
mobile marketing. Of these, 42% say that
their company has no plans to implement any
mobile marketing, while 36% of companies
plan to do some mobile marketing in the
Company: How are you using mobile marketing to enhance Company: How do your segment your online audience to identify
customer engagement? “quality” customers / users?
Our customer engagement strategy seamlessly
120
embraces mobile marketing: 5.33% (21)
We do the occasional ad hoc piece of marketing via
the mobile channel: 17.26% (68) 100
We don’t do any mobile marketing, but we are
planning to: 35.79% (141) 80
We don’t do any mobile marketing, and we don’t
have any plans to do any: 41.62% (164)
60
120 120 40
100 100

future. 80 80 20
From the agency perspective, a higher 60 60
proportion of agencies (30%) than clients Figure 26
0
40 40 A B C D E F G H I J
(17%) report that their clients do the Agency: Typically, how are your clients using mobile marketing to
occasional ad hoc piece of mobile marketing. enhance customer engagement? 20 20

0 0
Segmentation of audience to identify
A B C D E FA GB HC ID JE F G H I J
Their customer engagement strategy seamlessly A Customer lifecycle 37.
quality customers embraces mobile marketing: 4.68% (19) Use now Next 12 Use nowDon’t use Next 12 Don’t know /
months not relevant Don’t use
A Customer lifecycle
B Value to
A Customer lifecycle
organisation 37.02% (134)
months
26.52% (96) 37.02% 22.10%
(134) (80)26.52% 14.36%
(96)
42.
22.10% (80)
(52)
In terms of segmenting users, both companies They do the occasional ad hoc piece of marketing
B Value to organisation B C ValueReferrer / channel 42.23% (155) 25.89% (95)
to organisation 42.23% 20.71%
(155) (76)25.89% 11.17%
(95) 20.71% 48.
(41) (76)
(49%) and agencies (47%) alike use referrers / via the mobile channel: 29.56% (120) C Referrer / channel C Referrer / channel 48.61% (175) 25.28% (91) 48.61% 17.50%
(175) (63)25.28% 8.61%
(91) 17.50% (63)
(31)
D Behaviour D Behaviour
D Behaviour 41.16% (149) 32.04% (116)41.16% 17.40%
(149) (63)32.04% 9.39%
(116) (34) 41.
17.40% (63)
channel as a key means of identifying quality They don’t do any mobile marketing, but they are
E Recency and
E Recency and / or frequency E Recency and / or frequency
/ or frequency
45.03% (163) 27.07% (98) 45.03% 17.96%
(163) (65)27.07% 9.94%
(98)
45.
17.96% (65)
(36)
customers. Slightly more agencies (52%) planning to: 34.24% (139) F Demographics F Demographics 45.15% (163) 23.82% 45.15%
(86) (163)
21.05% 23.82%
(76) (86)
9.97% 21.05% (76)
(36)
G FDegree
G Degree of emotional engagement Demographics
of emotional engagement 16.24% (57) 25.64% (90) 16.24% 41.31%
(57) 25.64% 16.81%
(145) (90) 41.31% 45.
(59) (145)
report that their clients use demographic data They don’t do any mobile marketing, and they Hdon’t
Other H Other 3.13% (4) 7.03% (9)3.13% 29.69%
(4) 7.03% 60.16%
(38) (9) 29.69% (38)
(77)
than the companies themselves (45%). have any plans to do any: 31.53% (128) G Degree of emotional engagement 16.
H Other 3.1
Less than a fifth of companies (16%) say that
they use degree of emotional engagement to
segment their online audience.

24
 COMMENT

Becky Carroll
Creating customer engagement on their turf
Figure 28 Building strong relationships with take place on the organization’s website but
Agency: How do your clients typically segment their online customers is critical to improving customer wherever our customers are already interacting
audience to identify “quality” customers / users? repurchase and recommendation rates. online. For some customers, this may be
If a customer feels connected to an through their favorite social network, such as
organization that understands and cares Facebook or MySpace. For other customers,
100 about them, they are much more likely this may be on a popular blog or forum. Still
to remain loyal and tell their friends. others may prefer to interact via their own
The results of the Third Annual Online content (videos, photos, etc.) or simply to
80 Customer Engagement Survey give an comment on the content created by others.
indication of where these customer
We need to look across the customer Becky is Director
connections need to take place: wherever
60 our customers like to “hang out” online. experience and see how customers are of Social Media at
interacting with both our organization as well Brickfish, a social
as with other customers. How can we help
Customer communication media advertising
40 them spread the word about us? An engaged
100 100 and the resulting network, and
customer can become our greatest evangelist.
conversation should not We should also ask ourselves why a customer author of the
80 80
20 just take place on the would want to engage with us. Often, the blog Customers
60 60
organization’s website but answer is for customer service purposes. Rock!, which
Engagement is strengthened when it occurs gives advice on
40 40 0 wherever our customers are throughout the customer lifecycle, not just
A B C D E F G H I J how businesses
already interacting online. when a customer needs something from us,
20 20
or when we have something to say. can make sure
Next 12 Don’t know / their customers’
0
A B C D E
0
FA GB HC ID JE F G H I J
Use now Online customer engagement hasDon’t
months use
entered not relevant
The answer to getting better results from
a new era, one of interaction with the experiences rock.
A Customer lifecycle Use now Next 12 Next 12 Don’t know / 36.93%
Use nowDon’t use months not relevant Don’t use
Don’t(147)
know / 23.37% (93) 24.12%
brand through conversation. The Report
(96) 15.58%
online engagement(62) isn’t just throwing our
months not relevant
A B Value to organisation 41.01%
15.58% (162) 26.08%
(62)indicates (103) 20.00% (79) message
12.91% out to (51)
any number of social media
A Customer lifecycle Customer lifecycle 36.93% (147) 23.37% (93) 36.93% 24.12%
(147) (96)23.37% 15.58%
(93) 24.12% (96)
(62) many organizations (69%) are customersrock.net
B Value to organisation B C ValueReferrer
to organisation/ channel 41.01% (162) 26.08% (103)41.01% 20.00%
(162) (79)26.08% 12.91%
(103) (51) 46.84%
20.00% (79) 12.91% (178)
(51) 22.89% (87) 15.00% (57) sites to see what
15.26% (58) sticks. Planning ahead, we
C Referrer / channel C Referrer / channel 46.84% (178) 22.89% (87) 46.84% 15.00%
(178) (57)22.89% 15.26%
(87) 15.00% (57)
(58) 15.26% (58)still trying to engage online through their
need
D Behaviour D D Behaviour
Behaviour 37.98% (147) 30.49% (118)37.98% 18.60%
(147) (72)30.49% 12.92%
(118) (50) 37.98%
18.60% (72) 12.92% (147) 30.49% and
(50)email newsletters (118)
plan to18.60%
continue to(72) 12.92% (50) to understand where our
to invest time
E Recency and / or frequency E Recency and / or frequency 45.26% (172) 23.42% (89) 45.26% 18.42%
(172) (70)23.42% 12.89%
(89) 18.42% (70)
(49) 12.89% (49) customers prefer to interact online. Then,
F Demographics Recency and / or frequency
F EDemographics 52.22% (200) 20.89% (80) 52.22% 14.36%
(200) (55)20.89% 12.53%
(80) 45.26%
14.36% (55)
(48) 12.53% (172)(48)do so in23.42%
the next 12(89) 18.42%
months (59%). (70)
This is 12.89% (49)
22.04% (82)fine for one-way communication; however,
in order to most effectively engage those
G
H Other
F
H Other
Demographics
G Degree of emotional engagement 11.56% (43)
Degree of emotional engagement
5.93% (7)
24.19% (90)
4.24%
11.56% 42.20%
(43)
(5)5.93% 26.27%
(7)
24.19% 22.04%
(157) (90)
4.24% 63.56%
(31) (5)
52.22%
42.20% (157)
(82)
26.27% (31)
(75)
(200)
63.56% (75)
20.89% (80) 14.36% (55) 12.53% (48)
customers, we need to go to those sites, watch
G Degree of emotional engagement 11.56% (43)true customer 24.19%engagement
(90) calls for more.(157)
42.20% and22.04% (82) for a while, and begin
listen intensely
H Other 5.93% (7) The best way to enable ongoing online
4.24% (5) 26.27% (31) to engage 63.56%our customers
(75) in conversation
engagement is to create ongoing online
where they are. By taking this approach,
customer conversations. This occurs when
we will understand how best to converse
we engage online on the customer’s terms,
with our customers, in the manner that they
as well as on the customer’s turf. In other
prefer, which will naturally increase customer
words, customer communication and the
engagement, and loyalty, with us.
resulting conversation should not just

25
COMMENT

Matthew Bailey
Striking a balance
One of the prime ways to drive an economy out of recession is to get Issues around customer Meanwhile, a third of agencies (33%) report that organisational
Joe Public back out on the high streets and on-line, spending their incoherence is typically a problem for clients but only 21% of
hard-earned money again. So it’s reassuring to note that 44.07 percent
engagement and key principles organisations say that this is actually an issue. This difference again
of the respondents to the Customer Engagement Survey were placing suggests that this problem is more evident to observers looking in.
more emphasis on customer engagement in the face of the economic
Barriers to better online customer
downturn. On the other hand, over a third seem to be burying their engagement
heads in the sand and not emphasising this important function. Lack of resources continues to be a major At a glance, the biggest obstacles* holding back companies from
To be fair, perhaps they already have fantastic customer engagement, barrier to successful customer engagement cultivating better customer engagement are as follows:
but experience tells us that there’s always room for improvement and although, encouragingly, slightly fewer
now is certainly no time for complacency. companies than last year now find this to be
Matthew is editor
a major problem (52% compared to 60% in
of Customer With reports that the budget end of the retail market is booming, it’s Lack of resources 52%
last year’s survey).
Magazine and perhaps no surprise then that the survey has pointed out a sensitivity Problems with technology 31%
its sister title
to price (61.76%) amongst respondents’ clients. Will this trend continue Similarly, although problems with technology Difficult proving ROI 28%
or will there be a ‘flight to quality’? A focus on quality was expected by cause difficulties for fewer respondents
VitAL. He is an Complexity of organisation 26%
37.96 % of the survey suggesting that they are in for the long haul not than last year, steps still need to be taken to
experienced the short term, although a focus on short term needs was predicted by address this. Almost a third of companies
business to 33.43%, so it appears to be a finely balanced situation. (31%) say that this is a significant barrier to
business journalist cultivating better customer engagement The most significant barriers reported by agencies on behalf of
There’s always room for improvement and now (compared to 35% last year). However, it can their clients are:
with over 13 years’
is certainly no time for complacency. be seen that only 17% of agencies report that
experience on a
problems with technology are holding back
range of technical their clients. Lack of resources 45%
Obviously, differentiating your offering through more effective customer
and industrial Lack of skills / experience / 42%
engagement has to be a key cost-effective method of boosting margins
periodicals. More than a quarter (28%) of companies still
in a cold economic climate. The government and many customer understanding
struggle with proving a tangible return on
relations insiders have been keeping up a chorus stressing the Organisational incoherence 33%
investment or providing a viable business case
31media.co.uk importance of training. While the temptation may be to slash the training
(difficulty proving ROI). Difficult proving ROI 31%
budget and go for an on-paper, cheaper, automated, IT-based approach,
it remains the case that most customers want to interact with other According to 42% of agencies [Figure 30],
humans and for these people to be effective they need knowledge and a lack of skills, experience or understanding is
training. I suspect that the savvy customer relations practitioners will holding back clients from cultivating better
cherry-pick the best from both approaches. customer engagement. Only a quarter
of companies surveyed said this was
a major barrier.

* Respondents could check up to three barriers

26
 COMMENT

Stéphane Hamel
When engagement rhymes with commitment
Figure 29 Everyone agrees that the concept of ‘customer engagement’ is
Company: Which of the following have been the most significant barriers important, but few have defined a strategy to support it. Without it, it’s
to cultivating better customer engagement in the last 12 months? hard to know and describe the attributes of an organisation’s customer
engagement. It’s even harder to drive long term commitment and
60 60 Organisational incoherence,
Organisational incoherence,culture
cultureoror(lack
(lackof)of)
will: 21.48%
will: (84)(84)
21.48% objectives: improving life-time value and truly being customer centric.
Lackof
Lack of skills
skills // experience
experience//understanding:
understanding:24.81%
24.81%(97)
(97)
The economic downturn might be the trigger companies were waiting
50 50 Customers or
or products
products unsuitable:
Customers unsuitable:5.37%
5.37%(21)
(21) for to justify a stronger focus on customer engagement. Those that have
Lackof,
Lack of, or
or difficulty
difficulty proving,
proving,ROI
ROI/ /business
businesscase: 28.39%
case: (111)
28.39% (111)
a good handle on their strategy – and measuring it – are seeing higher
40
40 outcomes. Despite economic troubles, they are more likely to pursue
Problems with technology: 30.69% (120)
Problems with technology: 30.69% (120) long term strategies. Simply put, they will come out of it stronger! Stéphane is
Lack of methodology or framework: 24.81% (97)
30
30 Lack of methodology or framework: 24.81% (97) an eBusiness
Complexity of organisation: 26.34% (103)
Complexity of organisation: 26.34% (103)
Pressured by the economy, customers will be Strategist &
20
20 Lack of resources (budget and time): 52.17% (204)
Lack of resources (budget and time): 52.17% (204)
more sensitive to price, extend their decision- Web Analytics
Difficulty in finding supporting agencies: 3.84% (15) making process, and become less loyal. Consultant. He
Difficulty in finding supporting agencies: 3.84% (15)
10
10
Focus on short-term benefits: 25.32% (99) is also Online
Focus on short-term benefits: 25.32% (99) Commenting on last year’s survey results, Avinash Kaushik said ‘it
Lack of senior management buy-in: 18.16% (71) instructor at The
0 shows that companies and marketers are only thinking of what to get
Lack of senior management buy-in: 18.16% (71) University of
0 out of me, the customer’. Have things changed? Maybe not, but at
least the bulk of analytical data is coming from a very clever source: British Columbia
Figure 30 listening to your customers! Here, we’re reaching a concept very and founder and
Agency: Which of the following have been the most significant barriers to common in web analytics: what are my visitors’ goals and objectives? Web Analytics
your clients cultivating better customer engagement in the last 12 months? Are they able to achieve it? Were they satisfied with their experience? Advocate at
Pressured by the economy, customers will be more sensitive to price,
50 Immeria: an
Organisational incoherence, culture or (lack of) will: 32.67% (131) extend their decision-making process, and become less loyal. At the
50 Organisational incoherence, culture or (lack of) will: 32.67% (131) immersion in
Lack of skills / experience / understanding: 41.65% (167) same time, quality and desire for ‘simplicity’ is increasing. ‘Simplicity’
Lack of skills / experience / understanding: 41.65% (167) goes far beyond offering a great online experience. Organisations that analytics.
40 Customers or products unsuitable: 5.74% (23)
40 Customers or products unsuitable: 5.74% (23) are embracing the concept of ‘competing on analytics’ to continuously
Lack of, or difficulty proving, ROI / business case: 31.17% (125)
Lack of, or difficulty proving, ROI / business case: 31.17% (125)
measure, analyse and improve all areas of their business will be immeria.net
much better positioned than those approaching the web as an online
30 30 Problems
Problems with technology:17.46%
with technology: 17.46%(70)
(70)
marketing silo.
Lack
Lack of
of methodology orframework:
methodology or framework:25.44%
25.44% (102)
(102)
Ultimately, to nurture customer engagement, you need the budget
20 20 Complexity
Complexity of organisation:
organisation:20.45%
20.45%(82)
(82)
and time to allocate scarce resources. Sadly, unless your organisation
Lack
Lack of
of resources (budgetand
resources (budget andtime)
time): 45.39%
: 45.39% (182)
(182) is already embracing a customer engagement strategy, this will
Difficulty in finding
Difficulty finding supporting
supportingagencies:
agencies:7.23% (29)
7.23% (29) remain the most pressurised area and it is likely this will worsen
10 10 in the coming months.
Focus on
Focus on short-term
short-term benefits:
benefits:31.17%
31.17%(125)
(125)
Lack of
Lack of senior
senior management
managementbuy-in:
buy-in:24.44%
24.44%(98)
(98)
0 0

27
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
Key principles of customer
engagement
In a free-form question, agencies and clients
were asked what principles they would urge
each other to adhere to, in order to improve
customer engagement.
Analysis of company answers showed that the
following themes emerged:
• The need for more focus on
customer service and the business
processes which drive this
• Maintaining a focus on demonstrating
clear return on investment (including
effective measurement and tracking
to understand what works)
• Embracing Web 2.0 technologies
(where appropriate)
• A clean and simple user experience
“Customer engagement initiatives are really just the next
evolution of marketing.”
28
Some client-side respondents felt that their
agencies should show a keener interest in
their businesses as a whole, including towards
their core market, products and customers.
One respondent mentioned that more time
should be given to talking to (and meeting)
their customers, in order to really understand
them.
Respondents also felt that simplicity, in
terms of focusing on a clean user experience
(simple, elegant and useful rather than
complex, technical and pretty) was an
important principle to adhere to. Analytics and
“Agencies/media owners still haven’t done enough to
justify non-ROI channels and [this] will just get worse as
the economy falters.”
“In the current economy, any marketer not looking
at where they can measure and deliver quantifiable ROI
is behind the pack.”
tracking are also widely seen as essential for
understanding how to manage and improve
business processes.
Respondents also mentioned implementing
Web 2.0 technologies and methods, including
working with social networking sites, viral
marketing and blogging.
Client-side respondents put more emphasis
on the importance of financial constraints,
and maintaining a focus on maximising ROI.
In summary, agencies said that clients should
take the following into consideration when
trying to improve customer engagement:
• Increase their understanding of the Analytics and
changing online environment and realise tracking are also
that customer behaviour is shifting widely seen as
essential for
• Understand how a customer
understanding how
reacts to an online experience
to manage and
• Increase customer engagement improve business
processes.
with the brand or product, to help
improve customer loyalty and trust
• Realise the need to balance hard
selling against soft engagement
• Try to understand the opportunities
that Web 2.0 can bring – and embrace
new media, rather than shy away from
it. Don’t be afraid of engaging the
customer in new or alternative ways
• Always consider what impact the user
experience will have upon the business.
“Measuring customer engagement is a time-consuming
job, and not something that can be done by existing staff
in their spare time. You need to hire good specialists,
but will soon notice a return on investment.”

Migration of marketing budgets
Respondents were also asked to share their
opinions about the migration of ‘traditional’
marketing budgets (for traditional marketing
activities) into customer engagement
initiatives.
Many respondents were highly positive about
the trend towards increased investment in
customer engagement methods including
blogging, forums, social media and viral
campaigns.
Although the importance of engagement
activities was generally recognised by most of
the agency respondents, issues surrounding
the difficulty of measuring such initiatives
were raised, alongside the view that for a
measurable ROI, traditional methods could
often be preferable for meeting certain
objectives.
Some respondents were sceptical about the
value of any type of marketing – particularly
social media – where return on investment
cannot be directly measured, and pointed
out that some initiatives would come under
greater scrutiny over the next few months.
“The traditional marketing activities are still best when
it comes to references, but customer engagement
initiatives are used to understand the customers better in
the broader sense of marketing.”
The attitude of respondents towards the
idea that customer engagement marketing
is replacing traditional marketing of course
depends on assumptions about definitions
of ‘traditional marketing’ and ‘customer
engagement’. Where customer engagement
was equated only with social media without a
clear ROI, there tended to be more negativity.
However, there is also an acceptance that
building deeper relationships with customers
is increasingly important, and that there has
been a change in how companies need to
address their marketing activity. Generally,
respondents believe that there is still a place
for traditional marketing activities but that an
increased focus on customer engagement is
essential.
Alex Smith
Invest in the right blend
In a time of economic downturn many
businesses tighten belts, prepare for
the fierce competition to retain their
customers and return to the focus on the
basics of sales, conversion and customer
affinity.
Those organisations that
invest and make the effort
to define the right customer
engagement blend for their
organisation will be those
which we will be looking
at, wondering “How do they
do it?”
At this time, businesses also keep one eye
out for the organisations that are easily
outperforming them and their competitors.
These annoying companies seem to have
success when everybody else is failing and
make light of a poor economic climate
leaving everybody to wonder “How do
they do it?”
Often this can be attributed to a simple
principle of competition: finding a
way to fundamentally change the way
that business is done. With the online
world growing up over the last decade
this is nothing new, as customer online
engagement has changed significantly with
social networks, blogs and so on.
COMMENT
In respect to this, the Third Annual Online
Customer Engagement Survey shows that
there is no silver bullet for improving customer
online engagement. Excluding email marketing,
most companies found that a combination of
customer engagement methods worked best
for them.
Looking to the future, the survey highlights
that a focus for many organisations next
year will be on engaging on-page interactive Alex is the Creative
Development
experiences. A similar focus will remain on the
customer engagement techniques that worked
Channel
well this year, such as social networks, blogging
Development
and immersive video content.
Manager for
It’s clear that there is no formula to prescribe Microsoft UK.
the right blend of techniques to significantly
Alex is focused on
increase the online customer engagement.
forming alliances
With the toughening economic environment with top web design
provoking the tendency to focus on customer and development
engagement basics and reducing costs,
agencies and works
perhaps those organisations that invest and
make the effort to define the right customer
with over 50 UK
engagement blend for their organisation will be web agencies.
those which we will be looking at, wondering
“How do they do it?” microsoft.com/web
29
“ Good email planning mirrors customer
preferences and behaviours. I have observed how
Amazon sends fewer emails when I am quiet and
then becomes prolific following one of my sporadic

”
online spending sprees.

Lucy Conlan, Tread carefully – the customer is not always right, p32

Thoughts on customer engagement

31
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
Lucy Conlan
Tread carefully – the customer is not always right
When it comes to email, customer centricity doesn’t mean being customer led
Do you know what you will be wearing, eating
or reading next week, month or over the next
year? I would anticipate (if you are like me)
you will have only the sketchiest of ideas.
Contemporary living offers so many choices,
and while choice is a good thing a lot of
options can be overwhelming. Sometimes
working out what we want now can be hard, let
alone being asked to anticipate future needs.
It is interesting then, that we ask consumers
to make decisions about what types of emails
they would like to receive from our businesses
and organisations. For most customers, they
will be asked to state their preference for email
communications early on in their relationship
with an organisation – either at their first
website visit or at the point of first online
purchase.
32
Many businesses and organisations as diverse
as Argos and the National Trust have made
the process easy by removing choice – asking
customers to sign up to only one list. However,
Many customers
others offer a lot more complex options. The
feel they should
sign up for IT business information website, Forester, has
over 20 types of emails and The Washington
everything so as
not to miss out. Post offers 15.
When signing up for these types of email
subscriptions, some customers may feel very
clear about what they would like, some may
make impulsive decisions and some may be
downright confused. I have observed that
many customers feel they should sign up for
everything so as not to miss out. More cautious
characters may decide to receive a simple
update to avoid being overwhelmed with too
many communications.
Communicating the diverse range of
cultural events at Europe’s largest arts and
conference centre, the Barbican (barbican.
org.uk), produced a significant challenge to
the marketing team. I discovered that most
customers thought they would like to hear
about ALL the artforms – music, theatre,
visual arts and film. This could mean that they
would hear about events as diverse as Philip
Glass concerts to James Bond films to Korean
productions of Shakespeare. It also meant that
by signing up to hear about everything, they
would be receiving one email on average a
day. However, our analysis showed that most
customers would actually purchase across only
one or two product areas. For most people
therefore, there was a definite gap between
what they thought they were interested in and
what they were actually prepared to buy.
Why is this a concern? Industry research and
analysis shows that the relevancy of content
is key to customers remaining engaged
with brands and products. Jupiter indicated
in a 2007 survey that 53% of consumers
unsubscribe when the offer and content in
emails is not interesting.
What should we do as marketers to help steer
customers closer to their true preferences so
that we keep their interest?
I would recommend observing customer
behaviour following the initial email
registration very closely. For all things in
life, the early stages in a relationship set the
scene for how things develop and email is no
exception. For example, if a customer always
opens emails for only one or two product areas
out of a total of five they have signed up for,
give them the option to reduce the volume
of emails received to eliminate the unwanted
content. You can offer the option to receive
less frequent emails and instead receive
a ‘catch all’ summary email.
But people are a fickle lot and do change their
minds!
Keep observing changes in the relationship –
what customers are interested in may change
suddenly or gradually over time. Revise your
email communication strategies to ensure
that they have the flexibility to grow and
be adapted for the majority of customers,
particularly the most lucrative ones. For
example, if a customer appears to suddenly
become avidly interested in one product
area can you increase the volume of relevant
emails? Are there extra incentives that you can
give them such as a special offer or provide
insider information such as advising of a
limited amount of stock in the product that
they are interested in?
 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009

Cautious characters may decide to receive

a simple update to avoid being overwhelmed.

Email checklist

Good email planning mirrors customer

preferences and behaviours. I have observed
Give customers an easy email sign-up
process
how Amazon sends less emails when I am
quiet and then becomes prolific following one
Keep observing
of my sporadic online spending sprees.
changes in the
relationship –
what customers
Amazon is taking the lead from me and Limit the options of emails offered
reflecting the changes I make. As a customer, I
are interested
in may change
find it more satisfying to be on the end of their
reactive communications than some e-tailers
initially
suddenly or
who appear to have more rigid frameworks.
gradually over
time. It is much more polite and satisfying for a Observe customer behaviour and then
customer to receive appropriate volume and
content despite their stated preferences. By increase or reduce email volume to reflect
reading the clues correctly we can satisfy
our customers while maintaining loyalty and
profitability.
their usage Lucy is a Digital Marketing Consultant for
the cScape Customer Engagement Unit.
Lucy helps clients to achieve strategic
Offer customers the opportunity to sign objectives and establish robust return on
investment models. Her clients include
up to specialised lists that they show an the Chartered Institute for Personnel and
Development (CIPD), Aviva and Sony.
affinity for

Exclude customers from email types that

they are not opening

33
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
Clare O’Brien
It’s a meatball sundae Jim, but not as we know it
How to engage with customers when both they and the online channel are moving at light speed
The overwhelming importance of online as an
engagement channel is plainly evident, and the
suddenness (and variety) with which this has
come about is, breathtaking.
So it’s inevitable that skill competencies are
‘under development’. Our understanding of
what customers want online, how this relates
to offline channels and how best to deliver
absolutely everything may be out of the
primordial slime but it’s still evolving.
So, why worry? We’ll get there in the end,
right? Rome wasn’t built in a day.
The problem with that approach is that
breathtaking speed. You’re building Rome
while a competitor over there is already
working on their first moon base. And your
web-using customers? Well, they’re flying at
light speed to Mars.
34
We’re already talking about Web 3.0 – broadly
the refinement of the application of all the
technical and social capabilities described by
Web 2.0 into more productive and intuitive
A meatball sundae
user experiences. We need to start paying
is the unfortunate
result of mixing a little more attention to our customers
so we can realistically address Customer
two good ideas.
Engagement.
Start by asking the following question and
choosing just one answer.
If a brand wants to engage its
customers online it should...
a) Pull together all its current marketing
material – TV ads, press ads, poster material,
brochures -, and republish it all online so
people can look at it on a computer.
b) Do a), PLUS spend a little bit more on
something digitally whizzy – say an online
game or two, an email newsletter, run some
polls, archive a few PR pieces, set up a
Facebook presence and invite comments and
anecdotes about the brand. (Remember the old
joke? “Enough about me, already. What about
you? Tell me what you think about me…”)
c) Invest heavily in a purely interactive
brand-based comms programme with lots
of cool (and expensive) digital stuff the web
agency is dying to build.
d) Completely revise its on AND offline comms
strategy, work out what’s being distributed
(including services), what its job is, how it’s
being received, consider what people want to
access, build the solution, test it, keep asking
people if it is or isn’t working and why and
over time, start to develop collaborative
relationships in territory that was strictly us
and them in days of yore.
In a way, these choices describe a brief
chronology (past, present and future) of how
marketers are working to harness online
channels for customer engagement. Brands
investing seriously in online comms are
probably producing customer experiences
described in b) or c) for example Pampers,
Bacardi, Innocent, Olay, Walkers, Persil,
Orange etc. Consumers are still being treated
to offerings from category a) and as yet
offerings from category d) are rare
Findings in the 3rd Annual Customer
Engagement Survey support this. Clients and
agencies more or less correlate when it comes
to the importance of strategy, the recognition
of objective areas of investment (media
application, function etc) and awareness of
current competencies. Everyone indicates
there’s a long road ahead. That’s why choice
d) is a rarity. We’re still learning how to use
online as a comms medium while coming to
terms with its functional role as an essential
operational platform (tax returns, online
banking, flight bookings, weekly shopping,
congestion charge payments and so on), to
figure out what engages people.
 3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009

We’re still learning how to use online as a comms medium while coming to terms with its functional
role as an essential operational platform (tax returns, online banking, flight bookings, weekly shopping,
congestion charge payments and so on).

To get there we need to really understand – the positive difference to their life. Useful content.
behaviour of people online as well as offline. Content they want to come back to, content
It means asking people what they expect and that makes the brand worth recommending to
would like, and creating it. It means keeping others.
close to people and reaching collaborative
conclusions that this service and that product Online needs to be an integral part not just of
and this way of doing something is going to marcoms planning, but business planning, so
engage people in a long-term relationship of we don’t end up creating meatball sundaes*.
genuine value to both brand and customer. We’ve never had the technical means to
It also means knowing how to blur divisions engage customers en masse in such a direct
between what’s on and offline. way before. There’s no reason we should be
expert at this, let alone even really understand
The thinking is that people will say what what needs doing. We’re learning at light
they’re really interested in online is speed, a new discipline which will rely on
doing something. For instance, having the changing the way we do everything.
conversation with the brand that helps deliver
the next generation of products and services, Clare is a member of the cScape
or managing something that makes life easier Customer Engagement Unit
in the real world. Something that relates to and co-founder and managing director of
who they are, what they need and makes a CDA, the interactive content consultancy.
Clare works with Anne Caborn to
* “A meatball sundae is the unfortunate result of mixing two good ideas. The meatballs are the foundation, the things deliver a range of content consultancy,
we need (and sometimes want). These are the commodities that so many businesses are built on. The sundae toppings creation and training services that
(hot fudge and the like) are the New Marketing, the social networks, Google, blogs and fancy stuff that make people all help organisations engage with their
excited. The challenge most organizations face: they try to mix them. They attempt to slap new marketing onto old and customers, by providing good online
end up with nothing but a failed website.”
experiences that meet expectations.
Seth Godin, Meatball Sundae: How new marketing is transforming the business world (and how to thrive in it).
webwordsworking.co.uk

35
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
Hugh Gage
Meeting expectations is the first step to engaging with your customers
Using analytics to better understand customer behaviour
One of the difficulties with identifying [online]
engagement is that the definition may change
depending on who’s being asked for it. Visitor
or customer engagement is quite an abstract
concept. A web analyst may talk about it in the
context of notional qualitative or quantitative
benchmark measurements, whilst the guy on
the virtual high-street (if you asked for his
opinion) might definite it completely differently
in the context of the site he’s visiting and his
own specific objectives.
Industry professionals charged with measuring
engagement will come up with formulae and
combined metrics. These can be benchmarked,
so it can be categorically said that either
“yes we have improved the level of positive
engagement” or, “er… positive engagement
seems to be slipping this month”.
36
I think the level of engagement is born
from the level of visitor satisfaction. That is
not to say they are the same, just that the
latter comes before the former. The idea of
Just because they
measuring satisfaction is not new. In fact, it
achieve their goal
does not mean has been dismissed by some as too limiting by
they did it in a itself, but assuming that many people know
satisfying way roughly what they want when they enter a site,
one who achieves that objective is likely to be
more satisfied than one who doesn’t.
Of course there are shades of grey here.
People will persevere with their task even if the
going is unnecessarily tough, and just because
they achieve their goal does not mean they did
it in a satisfying way. This being the case, one
would expect the associated data to reflect that
across the whole visitor population, including
those who were dissatisfied and gave up.
In other words, if steps were taken to improve
the quality of the visitor experience, more
would be able to achieve what they set out to
do and in a happier frame of mind. This in turn
would reflect well in the data and importantly,
a satisfied visitor is more likely to spread
the word about a service or website than an
unsatisfied one.
In an interesting study undertaken by the If the findings from the University of Warwick
University of Warwick in the UK, the concept research are to be believed, and people make
that people differ when deciding what goes associations in starkly different ways, then the
with what was explored. The idea being that process of meeting expectation and engaging
some people base their ‘similarity judgements’ visitors is potentially made more complex on
on physicality whilst others base them on the grounds that what’s good for the goose isn’t
themes. For example, many consider a bee to necessarily so good for the gander.
be more akin to a wasp or a fly, whilst others
may consider it to be more akin to honey. In the Customer Engagement report last year it
This can be related to the issues around was suggested that there is no such thing as an
meeting and managing differing expectations. engagement metric, but that there are a series
In circumstances where expectations are of metrics that can be used to measure specific
not met, the levels of satisfaction and actions which might, in themselves, indicate
corresponding positive engagement are likely some degree of engagement. That leads to the
to be lower. question of where we should be measuring
visitor expectation. Arguably, it should be at
In thinking about engagement we are in the actual point where engagement is likely to
many respects asking ourselves whether we be engendered. Some possibilities are:
are continuing to meet visitors’ expectations
as they are interacting with a brand online.
Because there are so many different points at
which expectations can be met, throughout
the process it would be difficult to measure
and benchmark engagement using one
or a few metrics. It may be possible to
combine associated metrics to produce an
index, but equally it might be simpler to
start by considering the key points at which
expectation needs to be met, and attempt to
understand how well it is being done.

With purse strings tightening, the web may be seen more than
ever as the place to research and get best value.
Point of entry
Where did visitors enter the site, how many
of them stayed and where did they come
from? This is perhaps one of the most critical
points in the whole process. Visitors from
different sources will have different levels of
expectation, and possibly different objectives
– e.g. research vs. completed action. Knowing
where they came from, which pages the
majority entered on and how many of them
stuck about, tells the site owner if they have
done a good job of welcoming the myriad of
different visitors to their site. If this initial level
of expectation is not successfully being met,
then the idea of engagement won’t even get
past first base unless it’s a one page site!
Progression
There will always be key areas of content that
are more central to a site’s objective. Reaching
this content, interacting with it and progressing
if required is another way of judging whether
the visitor’s expectations are being met. If
the visitor isn’t in the least interested in the
content then they may be in the wrong place,
or they may have come for a reason unrelated
to the primary objective of the site. In this
case, the standard benchmarks will not be
relevant.
The notion of
time spent on site,
pages viewed per Conversion
visit or recency This doesn’t have to reflect what the site stake
and frequency are holder wants from a visitor, but if people
nice, but only bear who visit a site knowing what they want are
relevance in the
delighted by what they find, they are more
right context.
likely to take an action that the site owner will
be happy about.
Duration
The notion of time spent on site, pages viewed
per visit or recency and frequency are nice,
but only bear relevance in the right context.
They’re like nursery fish metrics: they travel
with the big guys and help out where needed.
The above examples are familiar and the list
is by no means exhaustive. The intention is
to underline the idea that in thinking about
engagement, it helps as much to identify the
key areas of expectation as well as the metrics
for measurement.
People can be difficult to understand at the
best of times, so catering for tens or hundreds
of thousands is hard. Doing so in a rapidly
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
changing economic climate is harder still.
Although high street spending has been
suffering in the UK, online spending still grows.
With purse strings tightening, the web may be
seen more than ever as the place to research
and get best value. As a result, consumer
attitudes and objectives are changing, so over
the next year the ability to stay flexible in
understanding them and associate the right
[collective of] benchmarks will be crucial.
When thinking about engagement, it might be
easier to stop trying to pin it down to a specific
definition or set of benchmark criteria, and to
consider it from a broader perspective which
allows for differing versions associated to
individual cases. Hugh is a member of the cScape
Customer Engagement Unit and works
as an independent web analytics and
usability consultant. He works with a
wide variety of client businesses helping
drive revenue through improved website
performance. He is also author of the
Web Pro Analytics column in the UK’s
.NET magazine.
engage-digital.com
37
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
David Dodd
Can rich content mean rich customer experience?
How to make cool stuff really work for you
The last twelve months have seen a large
growth in the use of rich content. Even in
these dark economic times this trend sees no
sign of abating. So if you’re thinking of diving
headlong into a brave new world of website
whistles and bells, make sure you deploy them
to maximum effect.
Like any major online advance, rich content
is caught in a cycle of novelty. Whilst this is
preferable to the later cycles of invisibility and
obsolescence, the bleeding edge is a dangerous
place to be. The cycle of novelty can stifle
real growth in favour of exuberance and
complacency. Remember how frothy Silicon
Valley became when e-commerce arrived?
Suddenly we would all be buying toys and pet
food online, even if we didn’t have pets or kids.
The idea that e-commerce just ‘worked’, and
therefore every e-commerce business would
38
1
float, was based almost entirely in the cycle The hook, not the worm: more often than not your rich content
of  novelty. For e-commerce to succeed, it took will act merely as the shiny skin of the onion which points your
the development of new business structures users at the real purpose of their visit, which is laid out in more
combined with the re-instatement of some conventional terms.
Novelty can
old business principles. Our conclusions from
stifle real growth
in favour of the first web bubble should be applied to rich
2
exuberance and content – don’t expect that placing video, Break the journey: remember you still have a final destination for
complacency. flash apps, audio clips and widgets on your your user – usually ‘purchase’, ‘submit’ or ‘join’. Well-placed rich
website are going to enhance your customer’s
content can act as a great way to hasten and strengthen their journey
experience any more than giving them to this destination, cutting drop-off rates in key areas.
a banana every time they hit the scroll bar.
Take video as an example: too many web
3
people EITHER push video as a fix-all golden Active audience alert! Your audience is not passive, so when
bullet, OR shy away from it, fearing some producing video content, forget any comparisons to film, television
golden-bullet-thinking is required to make it or corporate videos. By extension, remember your user’s journey
work hard. These are polarised assumptions is NOT going to be linear, so try to avoid making linear assumptions
and, of course, neither are true – but that’s (like placing a juicy video interview after 3 minutes of flashy fluff).
the cycle of novelty for you. We don’t need In our experience, drop off with web video ranges between fifteen
a sophisticated model to integrate rich media and twenty five seconds.
and harvest their benefits. We just need a bit of
lateral thinking upon existing principles, lateral
thinking that we’ve attempted to boil down to
a handy (but by no means exhaustive) list of
five lightweight (yes, the pun on our name is
shameless and intentional) tips:

If your web video must be shot on a mobile phone in order to get the killer ingredient, so be it –
your user has grown accustomed to watching dogs on skateboards, filmed using a digital watch:
they’ll understand.
4
Action (forget lights and camera) Production values say a lot, but
not everything. Appropriate content is more important. So if your
web video must be shot on a mobile phone in order to get the killer
ingredient, so be it – your user has grown accustomed to watching
dogs on skateboards, filmed using a digital watch: they’ll understand.
5
New technology old channel. Don’t keep opening new channels for
new technologies. A ‘video and multimedia’ page is not always the
way to go – this kind of ‘destination’ approach to rich content won’t
make as much as impact as a video placed in closer proximity to
relevant content.
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
Putting this idea to the test, imagine we’re
going to take the plunge with video for the first
time. We’ve planned an engrossing five-minute
studio interview with our CEO. We can picture
her/him setting out the company’s stall in
glorious homepage Technicolor. Wonderful.
The lights-camera-action moment beckons
as we develop the script, prepare for the
shoot, and wonder – ‘should we dress the set
with tulips or a solitary white orchid?’. Halt!
Re-read those lightweight tips! We should be
thinking, in this instance, of a series of lean
and snappy clips where our plucky Chief Exec,
now presenting from a real workplace setting,
unpacks the rhetoric in a fun and informal way,
talking straight down the camera to the folks
David is is a member of the cScape
at home. When our user clicks on a video clip
– which has been cleverly placed atop a giant Customer Engagement Unit and Creative
column of text – they’ll be offered insight, Director at Lightweight Media. He is
illustration and charisma, instead of devilish passionate about brand-savvy video and
detail (that’ll be where the good old text comes motion content for digital platforms.
into play).
Looking at this year’s survey results, it is likely lightweightmedia.co.uk
that many of you will be wrestling with rich
content in the coming year. I look forward
to seeing you on the path to whistles and
bells wonderland – make sure you avoid that
bandwagon of novelty along the way.
39
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
Richard Sedley
Can I tell you a story?
How to use narrative in online engagement
One of the biggest challenges developing
online customer engagement initiatives is the
lack of time and attention we can demand
from our audiences. Indeed, the reality for
Stories are the most
many today is that we live in the fastest paced,
important way our
most information rich, attention demanding
mind makes sense
and distracting world that humanity has
of our world.
ever known. This takes its toll on both our
customers and our marketing efforts. Even the
best laid and most value laden engagement
plans will come to nothing if our customers
don’t understand the value of what we’re
offering, or stick around long enough to
experience it.
Step forwards one of the oldest techniques for
engagement ever used, storytelling.
At their simplest stories are merely retellings
of a cause and effect relationship. For example,
40
“I forgot my wallet today so had to walk to
work and arrived late.” Admittedly this is
not a very inspiring story but it is a story
nonetheless; while “I woke up this morning,
went to work and had lunch”, is merely a chain
of events and not a story. The key difference
here lies in that from the first statement you
can draw a lesson i.e. if you forget your wallet
you’re likely to be late for work.
Throughout history stories have been one of
the best ways to assimilate and pass down
our understanding of what is valuable or
dangerous to our kind. As a result stories have
become one of the key organising principles
of the mind. (The FOXP2 gene is thought to
make narrative possible, supporting the idea
that human brains are actually hardwired for
stories). Our brains are now conditioned to
seek out and identify stories wherever they
may lurk. Even where stories don’t really exist
we try to find them, to rationalise and explain
the actions of others and ourselves.
So how can we use stories within our
online customer and employee engagement
strategies?
Do you make your customers feel they are taking part in
something special by choosing your products or services?
1. Provide a reason to boast
My wife often tells the story of how she went to the last ever Stone
Roses gig. If you press her on the matter she confesses that it was OK,
Too often we kid
but probably not the best concert she’s been to. What makes her share
ourselves that
this story more than any other is that it was the final time the Stone
we have provided
Roses played, which she learnt after the event. Only once the dust had
our customers
settled and the ringing in her ears had subsided did she understand that
with enough
she had seen something special.
information to
Do you make your customers feel they are taking part in something make a decision.
special by choosing your products or services? A simple way is giving
your customers information that confirms they made the right choice.
If your current customers are potentially your best sales force, why not
give them the tools to spread the word?
Was your event the best attended, the first or the last? Do other
well-respected companies or individuals use your product? Select facts
that confirm your customer’s wise decision in choosing you and help to
ensure that others will get to hear about that choice, too.

In the absence of an explanation customers will write their own stories and we will
have squandered an opportunity to help craft those stories to our advantage.
2. Tell them why
Last year I placed a particularly nice, blue, Donna Karan, silk and mohair
suit on eBay – it failed to meet my reserve. After resubmitting the suit,
this time explaining that due to marital bliss and a spreading waistline
I was reluctantly parting with my wedding suit, it exceeded my estimate.
Too often we kid ourselves that we have provided our customers with
enough information to make a decision. We load our web pages with
facts and stats, features and benefits, functions and costs. But how often
do we explain the ‘why’ behind these details?
• Why are we providing this service?
• Why did we write this?
• Why are we selling this?
• Why is it this price?
In the absence of an explanation customers will write their own stories
and we will have squandered an opportunity to help craft those stories to
our advantage.
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
3. Show them the consequences
Behind every online action there is an off-line consequence. For every
purchase of a toaster there is a full stomach in the morning, for every
book bought there is a person reading on a commute to work, for every
course attended there is a new friend met and for every article read
there is a water cooler moment. By helping our customers understand
the consequences of their online actions we are helping them write
happy endings for their stories.
The two most powerful, and least contrived, ways we can do this online
are through the use of images/video and user generated content. Visuals
showing real usage of our service or product allow customers to imagine
themselves at the end of the customer journey, ‘pre-purchase’. Allowing
other customers to share their stories similarly permits people an insight
into the future.
Richard is the Director of the cScape
Stories are the most important way our mind makes sense of our Customer Engagement Unit (CEU).
world. As that world becomes more hectic and as greater demands
are placed on us so stories become an essential way for us to navigate
these demands. Our customers are already writing these stories for richard-sedley.com
themselves; it seems churlish not to provide the characters, scenery and
script to help them.
41
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
Amanda Davie
But I still haven’t found what I’m looking for
Customer engagement starts with search
While Google celebrated its 10th birthday
this year, analysts have been reflecting on the
huge impact that the search behemoth has
had on the entire Internet landscape. Google’s
influence on the digital economy has been
equally impressive: Google has the ability to
make – or break – an online business through
its ability to drive customer acquisition and,
in so doing, has created many hundreds of
millionaires in the ecommerce space alone.
Yet it is Google’s influence on consumer
behaviour where its power is most evident.
Yes, search engines per se have fundamentally
changed the way in which we navigate the
Web, but Google’s dominance of this space
has moulded the way in which we articulate
our information needs, it has shaped our
expectations, and it has dictated the way
in which we find what we are looking for on
the web.
42
In the context of Internet information retrieval
relevance has come to mean finding websites
that have the information we’re looking for.
In actuality this means websites which match
how we articulate or describe what we’re
looking for. Most of us have grown accustomed
to thinking in keywords when conducting
an online search. A consumers need such as
“I need to buy my niece a gift for her third
birthday and get it in the post quick so that she
receives it in time because she lives abroad”
is condensed into a short sequence of words
Google isn’t the
such as “children gifts overseas postage”.
only one with a
Boy! Google certainly has its work cut out
responsibility to
in trying to decipher which websites to suggest
meet the needs of
its users. in response to this need.
We place a huge amount of trust in Google
to prioritise its web results according to our
individual preferences. Often this is a big ask
when all we offer up to help Google decipher
our needs is two or three keywords. Plus, as
creatures of habit, we increasingly turn a blind
eye when Google suggests websites which
weren’t necessarily exactly what we had in
mind. Google isn’t, after all, a mind reader!
All that said, Google does have the power to
satisfy our information needs.
Today, websites have to work much harder to prove that they are
relevant enough to appear at the top of the search results.
With any great power comes great
responsibility. Google is forever enhancing
its algorithms to ensure that it delivers the
most relevant results. While this job may get
easier over time as Google gets cleverer at the
same time the search engine index is growing,
making the competition stronger – today
websites have to work much harder to prove
that they are relevant enough to appear at the
top of the search results. Google cannot meet
customer expectations on its own.
Google’s job is made far easier by publishers
who analyse search behaviour when
developing their content strategies. By tailoring
your website content and copy to the language
(or keywords) used by prospective customers
you are already driving engagement. An
example: among SEO (Search Engine
Optimisation) specialists, there has been
a return to advocating the importance of
metadata – not because optimised meta data
influences your ranking, as it arguably once
did, but because within the metadata are the
words that the user first claps eyes on in the
search results. If the words they see are the
words they searched on, they are far more
likely to be enticed to click through to your
website.
Fundamentally, Google wants the same thing
as its users: the best possible information
framed in an accessible and succinct way. It is
the responsibility of marketers and publishers
to ensure they produce engaging and easily
accessible content. The old adage of “give the
customer what they want” is as relevant today
as it ever was.
Search is the mouth piece of marketing.
Where else in the marketing mix do consumers
prescribe – or describe – what they want,
whether this is a need for information, or
a brand, product or service? Understanding
search behaviour and the principles of search
engine relevance can really help to shape
a range of customer engagement strategies:
content, usability, accessibility, conversion
and loyalty. Google isn’t the only one with
a responsibility to meet the needs of its users.
By helping Google to give its users what they
are looking for, marketers can, in turn, convert
these users into customers.

Amanda is a member of the cScape
Customer Engagement Unit and an
independent Search consultant. She
has over ten years’ experience in digital
media and has worked for market
leading agencies including Outrider and
i-level, where she was Head of Search for
four years.
Lynda Rathbone
Oh the humanity!
Maximising social media insights
As 2009 is just around the corner, I find myself
still talking about social networking. Last year
I faced my fears, set up a Facebook profile,
and I have to say, it hasn’t been that bad.
My main concern about going on Facebook
was using my real name, as I didn’t want my
professional and my personal lives to be woven
together. This has now officially happened.
The first thing new friends, work clients or
colleagues do (including a whole slew of folks
I’d forgotten about from past lives) is look you
up on all the sites, send along a friend request
or professional network link, and then proceed
to barrage you with a whole bunch of personal
and professional updates. And we’ve only just
met! This would never happen offline. Can you
imagine sitting down with someone you just
met and exchanged business cards with, and
showing them photos you took on a night out
last week?
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
Can you imagine sitting down with someone you just met and
showing them photos you took on a night out last week?
While this isn’t new information, I do think
there is a new, interesting user humanisation
trend that is developing, and that is still to be
recognised. Instead of thinking of this as a
‘bad thing’, I think the blurring of these lines
can actually help us understand each other
better, work together more effectively and
create better user journeys, both on and offline.
Gaining real, personal customer insight is now
just a click away in many cases, and after all,
people know what they’re doing when they
post this information publicly so why not use
it to better inform the experience you deliver?
If  clients are doing this to me, I definitely want
to return the favour.
By searching across social networks, blogs Lynda is a member of the cScape
and online communities, you can compile Customer Engagement Unit and the
a much more interesting and detailed set of Managing Director of Four Square Media.
personas and customer insights, and perhaps
uncover interesting audience segmentation
foursquaremedia.net
data that you would never have had access
to before. Data on users is out there – from
the users themselves – in a way that it’s never
been before. I say let’s join Google and start
mining. The opportunity is there to humanise
the user experience and I can’t wait to get
started. Oh and by the way, feel free to go to
my Facebook page and add me as a friend.
Just don’t look at the party pics.
43
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
Dr Dave Chaffey
Learning to slice and dice
Your options for engaging online customers through segmentation
Since digital channels offer fantastic
opportunities for segmenting and targeting
online audiences it was good to see a question
on segmentation in this year’s engagement
Targeting according
survey.
to customer
behaviour is
We were keen to find out which techniques
were most popular for different points in the
arguably the most
powerful approach
customer engagement lifecycle from initial
for gaining
engagement and conversion through ongoing
engagement.
relationship building. In this commentary I
will assess the survey’s findings and give some
examples and practical tips on how you can
review or refine your own approaches to online
segmentation and targeting.
The framework I will use for this review
is based on the 4 main options for online
targeting covered in the fourth edition
of my book Internet Marketing: Strategy,
Implementation and Practice.
44
1. Demographic segmentation
Demographic segmentation is the familiar
audience breakdown based on profile
characteristics such as age, gender, geographic
location or social group. Of course this can
only be readily identified for registered site
users or email subscribers and potentially used
to deliver relevant messages where profiles can
be accessed in real time.
Unsurprisingly, this was one of the most
popular approaches to segmentation
identified in the survey, with around 45%
using it currently. But this is surprisingly low
since the most successful tool for customer
engagement was email newsletters which
were rated positively by 69% of respondents.
Email newsletters or solus e-blasts lend
themselves to targeting, but perhaps this low
figure reflects the lack of refined multichannel
communications strategies in many companies.
With more customers accessing the
web through different devices, it’s worth
also reviewing your ‘Technographics’ or
‘Webographics’ which show the devices used
by site visitors. Web analytics tools will show
you screen resolutions and browsers used by
visitors which should inform decisions about
the extent to which you support different
platforms. If you find that your screen
With more customers accessing the web through different
devices, it’s worth also reviewing your ‘Technographics’ or
‘Webographics’ which show the devices used by site visitors.
resolution suggests increasing popularity of
mobile devices such as the Blackberry, you
may consider repurposing content for this
audience or offering a mobile platform.
2. Lifecycle stage
Establishing the visitors’ degree of engagement
over time is where more sophisticated and
typically more costly targeting approaches
come into play. You can start by distinguishing
between first time and repeat visitors; how
does their content consumption vary when
you create a segment filter on number of visits
with your analytics tool. If you’re using Google
Analytics, you can also get a feel for the typical
frequency of return visitors through the Visitor
Loyalty and Visitor Recency reports.
Many have successfully used the presence or
absence of a cookie to use different content
or design to engage first time visitors. Site
visitors who progress through the lifecycle by
6
www.e-consultancy.com/news-blog/366311/q-a-thomas-cook-s-russell-gould-on-improving-conversion.html
registering or buying can be readily targeted
through email. Car manufacturers like
Mercedes-Benz and Renault evolve messages
delivered to newsletter subscribers according
to how long they have been on the list.
We are also starting to see more use of web
personalisation and merchandising based on
lifecycle position. For example, Thomas Cook
have described how they have introduced
a new platform, based on ATG technology,
which offers deep personalisation integrated
with different search journeys, video, maps and
consumer reviews6.
3. Value
Segmenting by value was also revealed as a
popular approach in the survey. Best practice
is to segment on current and future customer
value. Speaking at the E-consultancy Online
Marketing Masterclass, Chris Poad of retail
group Otto gave some great examples of the
criteria that can be used for targeting by value.
Indicators for evaluating customer quality
include order value per received catalogue;
order value per season; gross margin in % of
net sales and returns in % of order value while
indicators for customer potential include last
date of purchase; number of active seasons;
channel usage score and number of different
product categories.

Car manufacturers like Mercedes-Benz and Renault evolve messages delivered to newsletter
subscribers according to how long they have been on the list.
4. Behaviour
Targeting according to customer behaviour
is arguably the most powerful approach for
The beauty of
gaining engagement because communications
these techniques
are in context of known interest and intent.
online is that the
recency, frequency
We have already touched on behavioural
and latency can be
approaches when we discussed lifecycle and
value based segmentation. Another form of
assessed for any
online interaction. behavioural segmentation which was rated
popular was segmenting by referrer (or
channel preference), so for example, reviewing
degree of engagement with visitors referred by
Google AdWords differently from other online
or offline media channels.
More advanced behavioural approaches
combine analysis of recency, frequency,
purchase category and monetary value (RFM).
I find that many marketers have not considered
RFM segmentation approaches since they are
seen as only relevant to retailers or loyalty
schemes. But the beauty of these techniques
online is that the recency, frequency and
latency (average interval between actions) can
be assessed for any online interaction whether
it a site visit, purchase, posting in a community
or a click on an email.
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
It’s good to see that nearly half of respondents
are using behavioural techniques, but there
is clearly potential for doing this smarter,
particularly if the tools vendors improve their
approach.
Bringing it all together in
a persona
When you have reviewed all your
segmentation options, why not summarise
the main customer types through a web design
persona? Creating personas of site visitors is
now an established technique for increasing
the usability and customer centricity of a web
site. Personas are essentially a ‘thumbnail’
description of a type of person. Effective Dave is a member of the cScape Customer Engagement Unit and Director of
personas can be developed by combining any Marketing Insights Limited. He has been recognised by the Chartered Institute of
of targeting criteria I have discussed in this Marketing as one of 50 ‘gurus’ worldwide who ‘have shaped the future of marketing’.
piece.
The author of specialist E-consultancy best practice guides on E-marketing tactics like
SEO and PPC, Dave has also written a number of best-selling books, including Internet
Marketing: Strategy, Implementation and Practice, now in its fourth edition.
davechaffey.com
45
 Winners and Losers in a Troubled Economy: Read the previous reports online
How to engage customers online to gain competitive
customer-engagement.net
advantage

Martyn Perks & Richard Sedley

winners-and-losers-in-a-troubled-economy.com

46
 The cScape Customer Engagement Unit (CEU) works to help people maximise the
returns on their digital investment. If you’d like to hear some of our stories, tell us
yours, or simply share some ideas, get in touch.

To set up a meeting to discuss your customer engagement strategies,

contact Sarah Woodbridge on s.woodbridge@cscape.com or call +44 (0)20 7689 8800

If you’re a digital specialist or company specialising in online customer engagement

and would like to have a chat about joining the CEU,
Join the gang contact Richard Sedley on r.sedley@cscape.com or call +44 (0)20 7689 8800

customer-engagement-network.com Visit us at cscape.com to sign up for our regular newsletters to keep you up to date
with the latest acute intelligence.

47
3rd ANNUAL ONLINE CUSTOMER ENGAGEMENT REPORT 2009
Survey partners
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Changes in business development and
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Avantless aims for leveraging authenticity into
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www.avantless.com
48
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iF, IDEO, Siemens, Samsung, and Toyota. Even
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www.shcbi.com
Closed Loop Marketing is a boutique
marketing agency based on Northern
California, USA. Drawing from the latest
research and years of practical experience,
CLM’s team of senior experts employ a suite
of services to create actionable, real-world
solutions designed to help clients improve the
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CLM approaches online marketing holistically,
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CLM works with Fortune 500 as well as
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CLM’s individual services include Paid Search
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www.closed-loop-marketing.com
The annual Online Customer Engagement
Report, now in its third incarnation, generates
more interest than any other survey-based
research published by E-consultancy, in terms
of both number of survey respondents and
the extent of PR coverage.
It is heartening that organisations of all
shapes and sizes are hungry for knowledge
about how they can boost their business
performance through better and deeper
customer relationships.
We are delighted to be working with cScape
on this project because their thought
Repeated interactions that strengthen the emotional, psychological and
physical investment a customer has in a brand (product or company).
Definition of customer engagement
leadership and enthusiasm continue to ensure
that the survey itself is thought-provoking,
whilst also generating data and findings
which are insightful for businesses across
a range of sectors.
As the research has become more established,
an added bonus is that we can now include
related opinion pieces from a broad range of
contributors who are unified by their passion
for this subject.
A reason for the broad appeal of this research
is that it brings together various components
of digital marketing within a single theme
which is undeniably important to virtually
everyone organisation.
It gives an important strategic context and
framework for organisations who want to
understand what levers they need to pull and
what tangible benefits they might reap as
a result of customer engagement initiatives.
The gloomy economic prognosis for 2009
will ensure that this topic continues to grow
its profile because companies will need to
focus more than ever on making sure they
understand how customer behaviour is
changing so they can engage more effectively.
Linus Gregoriadis Head of Research, E-consultancy
www.e-consultancy.com