Customer Engagement from the Consumer's Perspective - THE SECOND OF THREE WHITE PAPERS BASED ON THE FINDINGS OF THE 2014 ROSETTA CONSULTING ...
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Customer Engagement from the Consumer’s Perspective THE SECOND OF THREE WHITE PAPERS BASED ON THE FINDINGS OF THE 2014 ROSETTA CONSULTING CUSTOMER ENGAGEMENT STUDY
Table of Contents
01 02
The Engaged Consumer How Engaged
=The Ideal Customer Customers Feel
PAGE 04 PAGE 06
03 04
How Engaged The Value of
Customers Behave Engaged Customers
PAGE 10 PAGE 12
05
Harnessing the
Value of Engagement
PAGE 15
WELCOME
Welcome to the second of three white papers on Customer Engagement
from Rosetta Consulting. Based on the findings of the 2014 Rosetta Consulting
Customer Engagement Consumer Survey, this paper examines what it means
to be engaged with a brand and explores how consumers experience engage-
ment. The first paper in the series focused on best practices for business leaders
approaching customer engagement. The third paper will explore the relation-
ship between financial value and delivery of a strong engagement experience.
Although the perspective of the brand and the customer are treated separately
in the white papers, it is critical to look at the relationship between brand and
customer holistically.
03
01 The Engaged
Consumer =
WHAT DEFINES AN
ENGAGED CONSUMER?
Research shows that interpretations of
engagement vary widely across companies
and even within departments. The term is used
to describe a brand’s “best” consumers, but
Since companies manage what they
measure, it’s critical to develop
a disciplined understanding of
engagement and how to quantify it.
often remains undefined, obscuring the goal.
The Ideal Engagement is complex. Like a human
relationship, it is the culmination of ongoing
interactions and experiences with the brand.
Customer A simple five-point scale question, like that
typically used to measure satisfaction, will
never capture the nuances and intricacies of
this relationship.
Rosetta Consulting surveyed 4,800
consumers to examine all facets of engagement
to better define and measure this key character-
istic. This data was used to better understand
Engaged consumers are the ideal customers. Rosetta defines customer engagement as a highly engaged customers including the
They aren’t simply “Satisfied” with your product personal connection between a consumer characteristics and experiences shared by
or service. They aren’t just “Loyal” repeat buyers. and a brand that is strengthened over time, these valuable customers.
And the dedication to their favorite brands resulting in mutual value. It’s an enduring,
extends well beyond their willingness to two-way active relationship that simultaneously
“Advocate.” Engaged customers are all three delivers on your customers’ needs and generates
of these things, and more. And the value of greater profitability for your brand.
these customers is clear – they buy 90% more
frequently, spend 300% vs. others each year and This paper unlocks engagement from the
are 5 times more likely to indicate it is the only customer perspective. It details the emotions,
brand they would purchase in the future. behaviors and experiences that are true
differentiators in a brand relationship.
Engaged Customers:
90%
more frequent purchases
Emotions, behaviors and
experiences are the true
differentiators. ABOUT THE STUDY
300%
spend vs. others each year
The 2014 Rosetta Customer telecommunication, retail, food and Study Included:
By highlighting the differences between the Engagement Consumer Survey polled beverage, and travel and hospitality.
4,800
brands that simply meet our expectations – 4,800 U.S. consumers about their Highly engaged consumers were
5x
more likely to choose brand
those that we purchase from regularly but have
little attachment to – versus the brands we feel
truly passionate about, marketers can develop
experiences with 83 market-leading
brands. Respondents were surveyed
on attitudes (including perceptions,
identified using a predictive
scoring mechanism that selected the
respondents that best demonstrated
U.S. consumers
15
for future purchase measures of engagement and an action plan feelings and opinions), as well as a broad range of key engagement
to foster it. behaviors (including advocacy, characteristics. These characteristics
interactions and transaction history). include advocacy, loyalty, increased categories
We will examine what defines an engaged Brands from 15 different industries transaction and interaction rates,
83
consumer in three parts: how engaged customers were measured including financial as well as positive feelings and
feel, how engaged customers behave and the services, consumer goods, technology, experiences associated with the brand.
value of engaged customers. market-leading brands
05
02 How
Engaged
Customers
Feel
see themselves and how they want others to
ENGAGEMENT IS PERSONAL see them. For instance, the Procter & Gamble
“Thank you, Mom” campaign during the
Engaged consumers sense both the tangible and 2014 Olympics highlighted the brand’s family
intangible value a brand provides. While difficult values. Using Tide doesn’t just get out stains – it
to quantify, these emotional needs are often what signifies that you are a caring mother invested in
sets great brands apart and transforms customers your child’s dreams and aspirations.
from loyal followers to active engagers.
Affiliate:
Highly engaged customers have a personal
6x
connection to a brand, built on experiences that
drive affinity with its ethos. Highly engaged
customers recognize when a brand understands more likely to agree the brand
their personal needs. “reflects my personal values”
Personalize:
within a unique subculture. Harley’s support of these groups, as The emotional needs
6x
This affiliation with a brand creates a sense of [Customers’] loyalty embraced not well as its clothing and accessory lines, a brand fulfills are
often what sets great
community and identity shared with fellow just repurchase but also commitment, reinforce this sense of community. brands apart.
more likely to believe the customers. This shared identity can further a psychological state in which the
brand “knows who I am” reinforce brand choice. individual placed large stakes on Create Community:
continued affiliation with the brand
and its community.” *
8x
In a classic example, although Harley-Davidson
4x
more likely to agree,
builds a quality bike, it is not solely the product
that attracts customers. Bikers rally behind the In other words, riding a Harley, more likely to “feel a
cultural connection, identity and mystique built belonging to a “H.O.G (Harley Owners connection with others who
“this brand knows what I want”
around the brand. As described by Professor Group)”, says something about who are the brand’s customers”
Neal Roese and Mohan Kompella at the Kellogg you are and where you belong.
School of Management, “The Harley-Davidson
*Source: Kellogg School of Management.
Engaged customers believe that the brand customer not only bought the branded product,
reflects their personal identity – both how they but also lived a branded lifestyle embedded
07
customers develop trust, loyalty and family-oriented image, but made
ENGAGEMENT FULFILLS fondness for the brand. They may sure its appeal went far beyond
EMOTIONAL NEEDS: even say that they “love” or feel cute characters.
BEYOND SATISFACTION “passionately” about it.
Positive emotional experiences flood
Although engaged consumers show Encourage Commitment: the theme park experience: from
high rates of satisfaction and report low-tech solutions such as giving
that their functional needs like birthday boys and girls nametags so
convenience and quality are met, 86% say, “this brand is they can be greeted to the technology
these attributes alone aren’t enough. my favorite” vs. only found in its new Magic Bands. This
Think of satisfaction as the price 86% 17%
17% of others innovation streamlines the park
of admission. Engagement goes well experience by including tickets, line
beyond this, providing multi- vouchers, payment capabilities, and
88% state they’re
dimensional value to customers. more in an RFID-enabled wristband.
“passionate about this
The band certainly makes visiting
brand” vs. only
Provide Value: 88% 8% parks more convenient for guests,
8% of others
but now Disney can track wearers’
6x
interactions and customize their
While more difficult to track and experience. For instance, when a little
more likely to believe quantify, maximizing the emotional girl meets Cinderella, Cinderella now
“this brand is worth more connection pays off. Take for example, knows to ask her “how did you like
than I pay for it” Disney, with its deliberate plan to having breakfast with Mickey this
deliver on emotional needs. morning?” Through these crafted,
Over time, as consumers accumulate
Ever since Walt Disney opened his
first park, he was adamant that making
meaningful experiences, Disney
has successfully created a place
ENGAGING EXPERIENCES FEEL
RELEVANT AND MEANINGFUL 4x
more likely to feel the
more and more positive experiences each person feel both welcome and where visitors aren’t seen as paying
with both the product and the brand, special, would lead to a visceral and customers, but rather as “guests in Companies are able to create consistently brand “knows how I prefer
their relationship and emotional lasting connection to the brand. our own home.” engaging experiences only when they have a to interact”
commitment deepens. Engaged Disney established a wholesome, solid foundation of best practices that go well
beyond a single campaign, channel or experi-
ence. Engagement is driven by experiences and One top brand that has mastered relevance is
interactions that are simple, consistent, relevant, Amazon. When they recommend a product,
interactive and trustworthy. Customers want to that prompt is based not only on purchase
know that a brand is making an effort to treat history, but on browsing habits, product ratings,
them as an individual, and respects the effort wish lists, and other customers’ shopping and
they put into being a customer. purchase patterns. With every interaction,
Disney has successfully Amazon’s recommendation engine learns more
created a place where Deliver Relevance: about your preferences and habits, increasing
the relevance of communications. One Forrester
visitors aren’t seen as analyst estimated that, due to this high level
paying customers, but 65% agree, “Interacting with of personalization, Amazon’s conversion rate
this brand feels easy” vs. only for on-site recommendations could be as high
rather as “guests in our 24% of others as 60%.*
65% 24%
own home.”
As a customer builds familiarity and trust with
4x
a brand, a relationship develops. And not unlike
a friendship, engaged consumers see their rela-
more likely to feel the brand’s tionships with their favorite brands as mutual
“communications are relevant” — they give a lot and they get a lot. For highly
engaged consumers, the tangible and intangible
value they receive from the brand outweighs the
effort and cost they expend as loyal consumers.
*Source: Fortune, July 30, 2012.
09
03 How
Beyond marketing interactions, they people waiting in line at Apple’s Highly engaged customers are more
are more willing to try new productss flagship 5th Avenue store in like to be classified as Promoters
Engaged
from the brand to broaden their brand Manhattan for the midnight release – according to the NPS scoring system
relationship. They are also more some had been there for weeks. and advocate at significantly
likely to upgrade and respond to These are not customers looking higher rates.
cross-selling efforts. for convenience, the lowest price
Customers Encourage Commitment:
or a product that has all the bugs
worked out. They are highly engaged
customers devoted to the Apple brand
Promote Advocacy:
Behave 6x
who are willing to spend time and
money to deepen their commitment. 3x
more likely to advocate to
friends and family
more likely to say they would
“try a new product or service ENGAGED CUSTOMERS
from the brand it as soon as it
becomes available”
WANT TO SHARE THEIR
EXPERIENCE: ADVOCACY 4x
more likely to advocate to
colleagues and acquaintances
2x
Naturally, engaged customers want
those around them to enjoy the
The brand benefits not only by encouraging benefits they get from the brand they
more likely to upgrade or 93% promoters vs.
ENGAGED CUSTOMERS DEEPEN interaction, but also from the real-time feedback
purchase additional services love, and they advocate accordingly.
and customer insights. 38% of others
THE RELATIONSHIP: INTERACTION from the brand But there is more to advocacy
AND CROSS-SELL Highly engaged customers interact more
than altruism. We’ve already seen 93% 38%
that engagement can reinforce a
Engaged customers act on their desire to create
closer ties with the brand. They trust it and are
with their brand of choice.
2x
more likely “to spend more
customer’s identity and cultivate a
sense of belonging to a like-minded American Express was able to build
willing to take steps to deepen their connection. Encourage Interaction: group. There’s no better validation of engagement and harness the power
money on this brand even of advocacy through its Small Busi-
Starbucks has taken advantage of this active that identity than to sway others to
when a competitor had a ness Saturday campaign. Although
your point of view. By sharing their
4x
engagement through its MyStarbucksIdea.com slightly lower price/
experience, engaged customers are American Express has always focused
website. It enables customers to make better deal”
positioning themselves as opinion on relationship building and the idea
suggestions about products, the customer more likely to “appreciate when
leaders in their social circle and even that “membership has its privileges,”
experience and community involvement. this brand reaches out to me”
among people they don’t know as well. that membership extends to small
Visitors can vote on ideas and see updates on
In fact, engaged consumers are even business merchants as well. The
suggestions put into action. The site has received
7x
willing to overlook occasional func- company created a social media
nearly 200,000 suggestions – many of which
tional and convenience-related short- community for small business
Starbucks implemented, including bringing back
banana nut bread and building bike-friendly more likely to “always respond to comings. Despite a barrier to purchase, There’s no better owners to share ideas, learn from
facilities – and each one of those comments this brand’s promotional offers” a negative experience, or even higher
prices, the most engaged consumers
validation of brand each other and grow their businesses
by promoting Small Business Saturday.
represents a customer seeking deeper
engagement with the brand. often stay committed. identity than to sway The community generated more than
For example, when the iPhone 5 was
others to your point 2,700,000 Likes, 195,000 Tweets, and
American Express saw a 23% increase
released, there were more than 1,400 of view. in transactions to small business
Tangible and intangible merchants after its creation.
values received from a brand
outweigh consumer effort
and costs.
11
04 The
HIGHLY ENGAGED CONSUMERS...
Value
of Engaged ...BUY
Customers 90%
MORE
FREQUENTLY
AND SPEND
Intuitively, marketers understand
that engaged consumers are worth
They are also more likely to choose the
brand in the future: 60%
MORE
more – they are loyal, sticky and
they advocate on behalf of the brand. Foster Loyalty:
When examining hard measures of
value, such as spend and frequency IN EACH
5x
of purchase, this perception proves TRANSACTION
true. Highly engaged consumers are
worth significantly more to the brand; more likely to say, “this is the
specifically, they spend more and will only brand I would choose” ...RESULTING IN
3x
continue to do so in the future.
Highly Engaged Consumers: Take, for example, athletic clothing shop-
pers. When we compare highly engaged
60%
athletic clothing customers to non-highly
engaged customers, we see that highly
engaged consumers spend 97% more
ANNUAL
VALUE EVERY YEAR
more spent in
on average ($112 vs. $57) and purchase
each transaction
94% more frequently (4.76 times a year
vs. 2.45).
90%
90% more frequent
And despite significant market and
competitive differences across industries,
purchases these trends are present from financial
services to fast food and from laptops
3x
annual value
to lodging.
per year
1305 Harnessing
the Value of
Engagement
Is your brand doing everything it can to drive For more information on the 2014 Rosetta
engagement among your customers? For more Consulting Customer Engagement Survey or
information on bringing your organization how we can help your brand benefit from a more
up to speed on engagement best practices, engaged customer base, please contact:
make sure to read the first white paper in this
series, available here. That paper outlines Nick Hahn
the foundational competencies for a strong Managing Partner
engagement strategy. 212.771.5474
nick.hahn@rosetta.com
Chetna Bansal
Even small improvements Partner
in engagement metrics can 212.771.5372
chetna.bansal@rosetta.com
dramatically increase your
value to your customer
ABOUT ROSETTA CONSULTING
For over 15 years, Rosetta Consulting has been
In addition, Rosetta Consulting can help you a catalyst for unlocking reciprocal, long-term,
determine how well your brand is engaging engaged relationships between companies Our holistic approach includes: Piers Platt, Associate Partner, The value of highly engaged
your customers and how even small improve- and their customers, delivering mutual and and Kara Schnoes, Manager, Rosetta customers goes beyond
• A Three Dimensional View of spend. They are also more
ments in engagement metrics can dramatically measurable value. Past client work has included Business + Demand + Technology Consulting contributed to this report. loyal and willing to advocate
increase the value of those customers to creating demand driven growth strategies based on behalf of the brand.
your business. on deep customer understanding and intimacy • Next Practice, Forward-Looking
for one out of every five Fortune 100 companies Innovation
in more than 30 countries worldwide. Marketing • Integrative Solutions,
strategies informed by these insights typically Biased to Action
experience over a 50% lift.
15Unlocking and Activating™ Human Behavior
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