As products become more commoditized and companies try to outperform their competitors, a better customer experience is becoming an increasingly important way to differentiate. Customer engagement plays a large role in the overall customer experience. There has yet to be a standard definition of customer engagement. We turn to  Ron Shevlin, an analyst at Aite Group, LLC, for a definition. He defines engagement as: “Repeated interactions that strengthen the emotional, psychological, or physical investment a customer has in a brand.” Essentially, customer engagement is a measure of relationship strength. One method to measure customer engagement is by using sentiment analysis.  We’ll explore this idea further.

Most organizations already accept the fact that active customer engagement correlates with growing income and profit. Why?  Because engagement makes customers more loyal, generates positive word of mouth, and reduces the probability that a customer will switch suppliers. It is now commonly believed that organizations that positively affect engagement are more likely to realize several benefits from these engaged prospects:

• greater consideration for the company’s products,
• higher conversions of prospects to customers, and
• more regular purchasing behavior.

Therefore, it is worthwhile to develop a customer engagement strategy that focuses on creating a positive and consistent online and offline customer experience.

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What are Customer Engagement Strategies?

Customer engagement strategies create positive and consistent online and offline customer experiences.   They range from developing and implementing efficient and accessible customer service virtually to rich media to deepen customer relationships to build a sense of community around a product, service, and brand.

Customer engagement initiatives are not discrete projects with a planned end. Rather, you want customer engagement and experience to be an ongoing process.  If you haven’t mapped your customers’ post-sale experience with your company, this is an important first step.  And just as important is to establish a customer engagement performance metric.

Customer Engagement is a Behavioral Indicator

Because of its impact on the business, it is becoming increasingly important to monitor and measure customer engagement. To use engagement as a key behavioral indicator, your organization needs to be able to link points of customer engagement with bottom-line improvements.

Currently, there isn’t a universal formula for measuring customer experience. Even so, you need a method.  Many companies, such as Forrester, Aite Consulting (Shevlin), and Gallup, have proposed ways to do so. For example, Forrester proposes applying four components to create an engagement metric: involvement, interactions, intimacy, and influence. Ron Shevlin’s framework uses the following dimensions for thinking about, measuring, and improving engagement: product involvement, purchase frequency, service interaction frequency, interaction type, online behavior, and referral behavior. Gallup created an engagement ratio, which is based on 11 key attributes ranging from satisfaction and intent to purchase to a sense of belonging and emotional attachment.

In our work, we have found that there are four dimensions of interactions between the company and the customer that need to be taken into consideration when measuring customer engagement. These aspects include quantity, quality, breadth, and depth of engagement, in addition to a measure of correlation between the customer’s pattern of engagement and known stages of the purchasing process. Our customers find this approach particularly well-suited to measuring the impact of virtual interactions, as it requires counting and identifying a stream of time-stamped interactions. These values are then combined to produce a composite score indicative of the strength of customer engagement by product or any other main focus for the company using online channels.

There are four key dimensions in the VisionEdge Marketing model:

1. Rating and Ranking of Interaction – Engagement Quality
2. Number of interactions/intervention – Engagement Quantity
3. Patterns of Interactions that can be associated with different attitudes and intent from the customer – Purchase Process
4. Depth and Breadth of Involvement – Engagement Intensity

While there are numerous valid approaches, the key is to:

• Map your customer experience to identify the process and the gaps
• Develop and test a model that will work for you
• Consistently track the data and apply it to your model

Armed with a consistent approach such as this, you can measure the correlation between the patterns of engagement and known stages of the purchasing process. Before we wrap up the discussion about measuring customer engagement, we want to address the question of using sentiment analysis.

Applying Sentiment Analysis to Measure Customer Engagement

Social media has raised the question of whether we can apply the same approach to measuring engagement in online interactions. As marketers look for ways to measure engagement in social media, research suggests that many are using time spent on a site as the most important performance metric, followed by unique page views. Since most social sites are not transactional, increased interaction does not necessarily indicate a more engaged or more loyal relationship. While the number of postings, completed profiles, and participation in polls or forums indicate interaction, they are not indicative of loyalty.

The question then is, “Do the behaviors such as purchase frequency, loyalty program participation, etc., used to determine engagement in the traditional brick-and-mortar, email, and e-commerce channels apply when trying to measure the engagement of customers who are participating in blogs, social networks, private communities, and forums? The answer is probably not. So what should we use? Some of the latest thinking is to measure sentiment as an indication of engagement.

Sentiment analysis — similar to text mining — involves parsing and analyzing the comments and suggestions

Customers post on social media. It concentrates on looking at the context, tone, emotion, polarity, and objectivity of the comments rather than solely the words. By analyzing and classifying a text string, you can create a sentiment analysis model. Twitter and Facebook have built-in applications that perform keyword-based sentiment analysis, and Google is experimenting with its Google Trends service.

Sentiment analysis offers organizations a way to recognize which social media participants are loyal and engaged and which are not. It’s only a matter of time before we’ll have better ways to measure the engagement of the social media customer. In the meantime, this is one approach gaining traction.

As the investments in social media expand, there is value in exploring a strategy that translates social media comments into useful and actionable customer engagement insights.

In summary, as you explore how to increase penetration into your customer and prospect base to drive more and faster customer acquisition and retention, across a multitude of touch points, engagement needs to be a part of your strategy.  It is equally critical that you measure engagement and have a way to calculate the value and ROI of engagement vehicles. That’s where we can add tremendous value.

FAQ:

• Engagement Quality: Rating and ranking of interactions
• Engagement Quantity: Number of interactions/interventions
• Engagement Intensity: Depth and breadth of involvement
• Purchase Process: Patterns of interaction tied to customer attitudes and intent

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