Whenever I start working with a new client, I’m always ready for the opening request – please find us more leads! My answer to that is, of course I’ll work closely with you to deliver more leads, but this should include existing customers as well as new prospects.
I’m still surprised by how many companies want me to focus nearly all my attention on leads from new prospects when they’ve got a goldmine in their back yard. Whilst it’s critically important to obtain new customers, it’s imperative that companies also retain their current customers and expand their footprint in these too.
In this blog, I discuss the importance of delivering effective customer engagement and the benefits that result in terms of longer customer lifetime value; maximising upselling and cross-selling opportunities; and the power of community and brand advocacy. I’ll also describe the many ways that you can approach this (from simple to complex) and provide some top tips.
Why is customer engagement so important?
As consumers, how often do we buy a product or service and never hear from the supplier again? In my experience it’s far too common and as a result my perception of that company, and maybe even the product or service that I’ve bought, can be negatively impacted. On the other hand, the suppliers that reach out to me after the purchase to see how it’s going will leave a good impression.
It's the same in the B2B world. Failing to engage effectively with your customers can be a big mistake and it’s more common than you think. The good news is that for those companies that understand the value of customer engagement there are big rewards. The probability of selling to an existing customer is 60% so why would you not want to allocate some resources to doing this?
Whenever I run workshops with my clients and ask them for their key points of differentiation, they almost always cite key features and benefits of their products and services. Interestingly, over half of these companies don’t mention customer experience and if they do, they can’t demonstrate a robust approach to customer engagement or share any tangible results.
Delivering an excellent customer experience is the single biggest point of differentiation for any company. If I’m looking for a particular product or service, I know I’ll be able to source several suppliers that provide similar offerings. However, if I then look at suppliers that can also demonstrate a vibrant customer community, with lots of positive testimonials the list gets a lot shorter!
In increasingly competitive markets, it’s no longer about the product or service that you sell. It’s about how you engage, support, and nurture your customers through their entire journey with you.
The key benefits of effective customer engagement
- Increased revenue: Satisfied customers are more likely to invest further and longer in your products and services. A positive engagement can lead to upsell and cross-sell opportunities and these should form a key part of your sales strategy. A simple way to optimise this is to adopt a ‘next best purchase’ approach – this is where you look at the products or services your customers already have and then identify what would their next purchase most likely be. For example, have they already bought a service plan, or could they need the next level of support as their requirements have got more complicated?
- Improved customer retention: Implementing a structured approach to customer engagement will lead to higher customer satisfaction and improved retention. In addition, demonstrating a healthy customer life-time value will be received positively by potential acquirers, so build this metric into your exit plans.
- Competitive differentiation: In a competitive market, a great customer experience can set you apart. When customers feel valued and supported, they are less likely to switch to a competitor, even if that competitor offers a cheaper price.
- Brand advocacy: A robust approach to customer engagement can lead to positive referrals. There is nothing more powerful than your customers becoming advocates of your brand as potential buyers will place a great deal of emphasis on independent opinions. Conversely, negative opinions can spread quickly and damage your brand’s credibility.
- The power of community: Taking brand advocacy to the next level could see your customers taking an active role in a user community. This can either be created independently by the customers themselves, or driven by you, but in either case, it’s extremely powerful. I encourage every client that I work with to develop, or enhance their customer community, and it doesn’t have to be complicated.
How to Measure the Effectiveness of Customer Engagement
Effectively measuring your customer engagement helps you understand what’s working and where improvements are needed. It’s important that you systematically listen to your customers and continuously act – ‘You said, we did’ is a powerful mantra to adopt.
Below I’ve listed the metrics that I encourage my clients to use, in priority order - you can choose to use some or all of these.
- Customer Lifetime Value (CLV): CLV measures the total revenue a customer is expected to generate over their relationship with your company. Higher CLV often correlates with a positive customer experience, as satisfied clients tend to remain longer and spend more.
- Customer Satisfaction Index Score (CSI): CSI is an accurate measure of ‘doing best what matters most’. This is because it considers what is important to customers as well as their satisfaction. It’s a great tool for identifying the givens, the marginal gains, the enhancers and the hidden opportunities.
- Customer churn rate: This monitors the rate at which your customers stop doing business with you and provides insights into the overall health of your customer relationships. A high churn rate may indicate underlying issues with your customer experience.
- Net Promoter Score (NPS): NPS is a widely used metric that measures customer loyalty and satisfaction. By asking customers how likely they are to recommend your company to others on a scale of 0 to 10, you can gauge their overall experience and identify promoters and detractors. In my view this is OK in providing a general picture, but it’s difficult to derive specific actions from it.
- Engagement analytics: Track customer interactions across various touchpoints, such as website visits, email open rates, and social media engagement. High engagement levels generally indicate a strong customer experience, while low engagement may signal disinterest or dissatisfaction. If you’re using an Account Based Marketing model, this is a great way of keeping a close eye on the customers that are most important to you.
How to approach customer engagement
- Customer feedback and surveys: Regularly soliciting feedback through surveys and direct communication allows you to gather qualitative and quantitative insights into the effectiveness of your customer engagement. Use a blend of open-ended and closed questions to capture a range of metrics. You can either do this yourself, using simple tools such as Microsoft Forms, Google Forms, or there are lots of specialist survey tools to choose from. Alternatively, you could work with an agency to undertake the survey on your behalf. The benefit of this approach is that your customers tend to be more open if they’re dealing with an independent company. You should aim to undertake this exercise once a year.
- Business reviews: A really easy way to keep in touch with your customers is to schedule regular catch-up meetings or calls. Not only do these engagements demonstrate your commitment to your customers, they’re also a great way of identifying upselling and cross-selling opportunities. These touchpoints don’t have to be too regular though – quarterly for your most important customers works fine.
- Customer days: Whilst it takes some work to put together and there is a cost to doing it, I find that face-to-face customer days are a fantastic way to bring people together to share experiences and hear about new products and services. Try to make these events interactive and ask some customers to present case studies.
- New release webinars: A very cost-effective way of keeping your customers up to date with new products and services launches and company news. You can also record these and make them available as an on-demand asset for your customers to watch at their convenience.
- Build a customer community: At the simplest level you could create a WhatsApp group where customers can share questions and ideas and also use your annual customer day as a key focal point. Make sure that you’ve got the appropriate resource levels to ensure the community remains dynamic.
- Newsletters: A very easy way to stay in touch with your customers is to email them a newsletter. Twice a year is fine, and you can use these to promote your customer days and new release webinars too.
My top tips to achieve best-in-class customer engagement
- View customer engagement as a long-term commitment: It’s important that you adopt a long-term view when you’re implementing a customer engagement strategy. Remember that it’s a multi-touchpoint approach and it will take time and resources to implement effectively.
- Get the whole company bought in: One of the biggest mistakes I see companies make is giving the responsibility to a dedicated person or team without ensuring that everybody understands the part they play in successful customer engagement. Every touchpoint your company has with your customers reflects your brand and that’s not limited to a customer success or account management team.
- Segment your customers and provide tailored levels of engagement: The size of your customer base will determine the shape of your engagement model. At the simplest level you can segment your customers into A, B & C and develop levels of engagement for each segment. It’s best to segment by size of opportunity, rather than by size of customer.
- Adopt an outside-in mindset: When you’re surveying your customers make sure you ask a few customers to help you put the questions together. What you and your team think might be important is often quite different to your customers’ views.
- Make sure you take actions: The key to successful customer engagement is to take actions and proactively share these with your customers. It’s powerful when you can demonstrate that you’ve made the changes that your customers have asked for.
- Start simple: Whilst it might sound daunting to implement a customer engagement strategy, it doesn’t have to be complicated. By starting simply, you can demonstrate your commitment to your customers and then over time develop more sophisticated operating models.
- Keep your customer community vibrant: Sometimes companies start with good intentions and then unintentionally take their eye off the ball due to conflicting business pressures. To help avoid this, I recommend to my clients that they incorporate a community related KPI into their business goals.
- Don’t just focus on the senior decision-makers: Far too often companies only focus on the most senior people in their customers. Whilst this is important, don’t forget the influencers, in most cases these are the people who are actually using your product or service, and they usually have the most insightful feedback.
Conclusion
Delivering best in class customer engagement can help you build a leading market position. By creating a robust and structured approach, and taking a long-term view, you will build profitable relationships with your customers and differentiate your business too. When you’re considering lead generation, make sure you include your existing customers – it will be one of the best business decisions you make.