Customer engagement is a marketing and strategic management concept. Practitioners view it as interactions, "engagements", between a firm and its customers, while academic researchers define it as a psychological state that âÂÂoccurs by virtue of interactive customer experiences with a focal agent/objectâÂÂ, where focal agent/object can be any type of organization and/or its offerings such as branded products or services. As such, customer engagement is seen as a customerâÂÂs motivationally driven, volitional cognitive, emotional, and behavioral investments into interactions with such a focal agent/object. Marketing scholars see customer engagement as a key construct in understanding customer journeys and the most recent phase in marketing theory and management, following customer buying behavior process models (60s-70s), customer satisfaction and loyalty (70s), service quality (80s), relationship marketing (90s), customer relationship management (2000s), and customer centricity/ focus (2000s-2010s).
In March 2006, the Advertising Research Foundation announced the first definition of customer engagement as "turning on a prospect to a brand idea enhanced by the surrounding context." However, the ARF definition was criticized by some for being too broad. The ARF, World Federation of Advertisers, Various definitions have translated different aspects of customer engagement. Forrester Consulting's research in 2008, has defined customer engagement as "creating deep connections with customers that drive purchase decisions, interaction, and participation, over time". Studies by the Economist Intelligence Unit result in defining customer engagement as, "an intimate long-term relationship with the customer". Both of these concepts prescribe that customer engagement is attributed to a rich association formed with customers. With aspects of relationship marketing and service-dominant perspectives, customer engagement can be loosely defined as "consumers' proactive contributions in co-creating their personalized experiences and perceived value with organizations through active, explicit, and ongoing dialogue and interactions". The book, Best Digital Marketing Campaigns In The World, defines customer engagement as, "mutually beneficial relationships with a constantly growing community of online consumers". The various definitions of customer engagement are diversified by different perspectives and contexts of the engagement process. These are determined by the brand, product, or service, the audience profile, attitudes and behaviours, and messages and channels of communication that are used to interact with the customer.
Since 2009, a number of new definitions have been proposed in the literature. In 2011, the term was defined as "the level of a customerâÂÂs cognitive, emotional and behavioral investment in specific brand interactions," and identifies the three CE dimensions of immersion (cognitive), passion (emotional) and activation (behavioral). It was also defined as "a psychological state that occurs by virtue of interactive, co-creative customer experiences with a particular agent/object (e.g. a brand)". Researchers have based their work on customer engagement as a multi-dimensional construct, while also identifying that it is context-dependent. Engagement gets manifested in the various interactions that customers undertake, which in turn get shaped up by individual cultures. The context is not limited to geographical context, but also includes the medium with which the user engages. Moreover, customer engagement is the emotional involvement and psychological process in which both new and existing consumers become loyal to specific types of services or products. The degree to which customers pay attention to companies or products, as well as their participation in operations, is referred to as customer engagement.
At present, practitioners view and define customer engagement as interaction between a firm and its customers, while academic researchers define it as a psychological state of the consumer.
Efforts to boost user engagement can raise ethical concerns and privacy issues, further amplified with the rise of the use of modern artificial intelligence. Facebook and several other social media platforms have faced criticism for manipulating user emotions to enhance engagement, even if it is knowingly false content. Professor Hany Farid summarized FacebookâÂÂs approach, stating, âÂÂWhen youâÂÂre in the business of maximizing engagement, youâÂÂre not interested in truth." Various other techniques used to increase engagement are also considered abusive. For example, FOMO (Fear of Missing Out), infinite scrolling, and incentives for users who frequently engage with the service.
Offline customer engagement predates online, but the latter is a qualitatively different social phenomenon, unlike any offline customer engagement that social theorists or marketers recognize. In the past, customer engagement has been generated irresolutely through television, radio, media, outdoor advertising, and various other touchpoints ideally during peak and/or high trafficked allocations. However, the only conclusive results of campaigns were sales and/or return on investment figures. The widespread adoption of the internet during the late 1990s has enhanced the processes of customer engagement, in particular, the way in which it can now be measured in different ways on different levels of engagement. It is a recent social phenomenon where people engage online in communities that do not necessarily revolve around a particular product but serve as meeting or networking places. This online engagement has brought about both the empowerment of consumers and the opportunity for businesses to engage with their target customers online. A 2011 market analysis revealed that 80% of online customers, after reading negative online reviews, report making alternate purchasing decisions, while 87% of consumers said a favorable review has confirmed their decision to go through with a purchase.
The concept and practice of online customer engagement enables organisations to respond to the fundamental changes in customer behaviour that the internet has brought about, as well as to the increasing ineffectiveness of the traditional 'interrupt and repeat', broadcast model of advertising. Due to the fragmentation and specialisation of media and audiences, as well as the proliferation of community and user-generated content, businesses are increasingly losing the power to dictate the communications agenda. Simultaneously, lower switching costs, the geographical widening of the market and the vast choice of content, services and products available online have weakened customer loyalty. Enhancing customers' firm and market-related expertise has been shown to engage customers, strengthen their loyalty, and emotionally connect them more closely to a firm.
The utilization of social media platforms has emerged as a modern way of improving customer engagement strategies. By curating content that resonates with the interests of customers, businesses cultivate authentic connections and communities online. Platforms such as Instagram and Twitter serve as useful tools for meaning dialog, enabling businesses to make lasting relationships with customers and amplify brand visibility online.
Customer engagement marketing is necessitated by a combination of social, technological and market developments. Companies attempt to create an engaging dialogue with target consumers and stimulate their engagement with the given brand. Although this must take place both on and off-line, the internet is considered the primary method. Marketing begins with understanding the internal dynamics of these developments and the behaviour and engagement of consumers online. Consumer-generated media plays a significant role in the understanding and modeling of engagement. The control Web 2.0 consumers have gained is quantified through 'old school' marketing performance metrics.
The effectiveness of the traditional 'interrupt and repeat' model of advertising is decreasing, which has caused businesses to lose control of communications agendas. In August 2006, McKinsey & Co published a report which indicated that traditional TV advertising would decrease in effectiveness compared to previous decades. As customer audiences have become smaller and more specialised, the fragmentation of media, audiences and the accompanying reduction of audience size have reduced the effectiveness of the traditional top-down, mass, 'interrupt and repeat' advertising model. A Forrester Research's North American Consumer Technology Adoption Study found that people in the 18-26 age group spend more time online than watching TV. Furthermore, the Global Web Index reported that in 2021, YouTube beats any mainstream media platforms when it comes to monthly engagement. This is partly due to the fact that 51% of U.S. and U.K. consumers use YouTube for shopping and product research, a service that traditional media can't really provide.
In response to the fragmentation and increased amount of time spent online, marketers have also increased spending in online communication. ContextWeb analysts found marketers who promote on sites like Facebook and New York Times are not as successful at reaching consumers while marketers who promote more on niche websites have a better chance of reaching their audiences. Customer audiences are also broadcasters with the power for circulation and permanence of CGM, businesses lose influence. Rather than trying to position a product using static messages, companies can become the subject of conversation amongst a target market that has already discussed, positioned and rated the product. This also means that consumers can now choose not only when and how but, also, if they will engage with marketing communications. In addition, new media provides consumers with more control over advertising consumption.
Research shows the importance of customer engagement in the modern market. The lowering of entry barriers, such as the need for a sales force, access to channels and physical assets, and the geographical widening of the market due to the internet have brought about increasing competition and a decrease in brand loyalty. In combination with lower switching costs, easier access to information about products and suppliers and increased choice, brand loyalty is hard to achieve. The increasing ineffectiveness of television advertising is due to the shift of consumer attention to the internet and new media, which controls advertising consumption and causes a decrease in audience size. A study conducted by Salesforce shows an overwhelming 8% of customers acknowledge that their experience with the business is equivalent to the quality of its products or services. Therefore, it is important to prioritize customer engagement as a business strategy.
The proliferation of media that provide consumers with more control over their advertising consumption (subscription-based digital radio and TV) and the simultaneous decrease of trust in advertising and increase of trust in peers point to the need for communications that the customer will desire to engage with. Stimulating a consumer's engagement with a brand is the only way to increase brand loyalty and, therefore, "the best measure of current and future performance".
CE behaviour became prominent with the advent of the social phenomenon of online CE. Creating and stimulating customer engagement behaviour has recently become an explicit aim of both profit and non-profit organisations in the belief that engaging target customers to a high degree is conducive to furthering business objectives.
Shevlin's definition of CE is well suited to understanding the process that leads to an engaged customer. In its adaptation by Richard Sedley the key word is 'investment'. "Repeated interactions that strengthen the emotional, psychological or physical investment a customer has in a brand."
A customer's degree of engagement with a company lies in a continuum that represents the strength of his investment in that company. Positive experiences with the company strengthen that investment and move the customer down the line of engagement.
What is important in measuring degrees of involvement is the ability of defining and quantifying the stages on the continuum. One popular suggestion is a four-level model adapted from Kirkpatrick's Levels:
Concerns have, however, been expressed as regards the measurability of stages three and four. Another popular suggestion is Ghuneim's typology of engagement.
The following consumer typology according to degree of engagement fits also into Ghuneim's continuum: creators (smallest group), critics, collectors, couch potatoes (largest group).
Engagement is a holistic characterization of a consumer's behavior, encompassing a host of sub-aspects of behaviour such as loyalty, satisfaction, involvement, word-of-mouth advertising, complaining and more.
The behavioural outcomes of an engaged consumer are what links CE to profits. From this point of view,
"CE is the best measure of current and future performance; an engaged relationship is probably the only guarantee for a return on your organization's or your clients' objectives." Simply attaining a high level of customer satisfaction does not seem to guarantee the customer's business. 60% to 80% of customers who defect to a competitor said they were satisfied or very satisfied on the survey just prior to their defection.
The main difference between traditional and customer engagement marketing is marked by these shifts:
Specific marketing practices involve:
All marketing practices, including internet marketing, include measuring the effectiveness of various media along the customer engagement cycle, as consumers travel from awareness to purchase. Often the use of CVP Analysis factors into strategy decisions, including budgets and media placement.
The CE metric is useful for:
a) Planning:
b) Measuring Effectiveness: Measure how successful CE-marketing efforts have been at engaging target customers.
The importance of CE as a marketing metric is reflected in ARF's statement:
"The industry is moving toward customer engagement with marketing communications as the 21st century metric of marketing efficiency and effectiveness."
ARF envisages CE exclusively as a metric of engagement with communication, but it is not necessary to distinguish between engaging with the communication and with the product since CE behaviour deals with, and is influenced by, involvement with both.
In order to be operational, CE-metrics must be combined with psychodemographics. It is not enough to know that a website has 500 highly engaged members, for instance; it is imperative to know what percentage are members of the company's target market. As a metric for effectiveness, Scott Karp suggests, CE is the solution to the same intractable problems that have long been a struggle for old media: how to prove value.
The CE-metric is synthetic and integrates a number of variables. The World Federation of Advertisers calls it 'consumer-centric holistic measurement'. The following items have all been proposed as components of a CE-metric:
Root metrics
Action metrics
In selecting the components of a CE-metric, the following issues must be resolved: