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The customer engagement conundrum: What the **** is it?!

30th Jun 2014
Editor MyCustomer
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Within the space of a few short years, the phrase 'customer engagement' has gone full circle - from popular term, to much-derided buzzword and then back in vogue once more. 

Not only are software providers rushing to build customer engagement into their latest branding, but CRM guru Paul Greenberg recently gave it his seal of approval in an article where he outlined its importance, which brands constituted providers of engagement solutions, and why we should all be taking note of the category. 

So what exactly is it? Is it just another attempt to rebrand CRM? Or should we really be reconsidering all of our current strategies and processes?

Jamie Anderson is a good person to ask. Describing himself as a “CRM purist”, SAP’s global VP for CRM product marketing has been involved in the industry since its early days as a “nascent business philosophy”, before it became widely regarded as a technology; as a piece of enterprise software for employees in certain departments to align databases with.

Admittedly, most CRM software is more sophisticated than that, but Anderson’s belief is that many of the industry’s current shortcomings are a direct result of too many businesses believing that software alone can solve customer relationship problems, despite the fact that customers have evolved and, in many cases, moved on from this rigid concept:

“When we were putting in CRM systems back in the day, they offered a convenience for the customers,” he states. “They allowed banks, utilities, telecommunications providers to trade out of office hours. It was a tremendous convenience to customers, because it was all built around them. At the turn of the millennium, CRM systems were very much a system of engagement. Over the decade that followed, however, what we’ve seen is that CRM systems have been reallocated to a back office-type of system. More of an application or technical solution to manage customer information rather than the real engagement.

“I think the fundamental thing that’s changed is that, as that evolution happened, it’s become a big commodity playing field. During this time, the consumers seized control of the conversation and the consumers do not conform to processes that, let’s say, a utility provider puts in place to say “this is the procedure for going through switching your account, or getting a new tariff”. By the time the customer has made a decision now, they’ve done all the research and gone through the different channels and they’ve seized control of the relationship.”

Customer-managed relationships?

That’s where customer engagement comes in. Anderson is not the first to state that CRM has now moved into a realm whereby it could almost be renamed CMR, or customer-managed relationships. However, he also feels that this switch-up still misses the point: that customers are quicker to the draw these days, have more channels to access and research, and want things done in real-time. CRM or CMR can’t cater for that. More is needed.

“When you look at the landscape of CRM products, it’s very technically-orientated. In this new age, we need to reach out from these boundaries and engage customers early across the different channels; engage them at the point of awareness and start to guide them through the journey they have.

“That’s some of the fundamental stuff that’s changed and I call that the customer engagement landscape. It’s beyond traditional CRM, because it’s moved beyond the traditional confines.

“What is it that defines these journeys? One to one personalisation. Can CRM deliver that? Not on its own it can’t. If you think about a digital world, you think about things like web content management tools, and then the analytics that you need and the real-time processing capabilities to actually deliver that experience in real-time through the digital domain. Then you need to think about how the channels are connected. It’s more all-encompassing than the current CRM tools.”

An example of this might be a retailer with touchpoints in both the physical and digital space. If someone goes into their store for the first time, is there any reason why they should be expected to know that person, their buying habits, the items they might want to buy? Perhaps not at the moment, but very soon this level of experience will be what defines customer engagement, and consumers could well expect it as the norm from the shops they walk into.

Anderson expands on this anecdote further, adding that, “if someone walks into your store and you can already recognise what they’re potentially interested in, what’s stopping you from, say, alerting sales staff through their iPads, etc that that person is in store, and then pushing that customer’s information through to the sales device so those staff can offer a one-to-one personal service. Using data built up online to paint a picture of that person; that’s true customer engagement. It’s omnichannel, omnipresent. It’s real-time and it’s bigger than CRM.”

Rethinking process

There’s a general consensus among industry leaders that consumers are losing patience. Good customer engagement can help ease the pressure in that respecct, but all too often businesses are held back by legacy processes that aren’t flexible enough to react quickly across different channels.

Anderson refers to the practice of buying a mortgage. Is that ever an easy experience? Not likely. But why not? The depth to which people are sold an array of packages exists not because of the complexity of actually buying and paying for a mortgage, but through years of upselling, and trying to tie customers into other products by making switching and staying loyal more attractive. In the age of the customer, however, this is seemingly becoming less acceptable, and the businesses grasping this fact earliest are prospering.    

“It’s really a time consuming, intense process,” Anderson adds. “But what do we want? We want to be guided through [the mortgage buying] process in, say, 20 minutes max. We don’t want to be sold to. We all love to buy but we don’t want to be sold to. If companies can understand more about how they can serve this new digital customer and fuse it with the physical experience, then they’ll find a much more successful route.

“Most businesses do understand this, they get it. They’re all aware of the trends that are emerging, but they’re usually hamstrung by applications that were built for a different generation. If you look at contact centre systems that are in place today, they’re likely built 10 or so years ago. Some of the most popular CRM tools are based on a paradigm and database tables that were built for a generation 15 years ago. They weren’t built for engagement, they were built for sales effectiveness. They were never built to engage the customer.”

Mission possible

The good news is, that that CRM system you paid vast amounts of money for a few years ago, well, you don’t have to get rid of it already. CRM technology still plays a big part in the switch to becoming a customer engaged organisation; you just need to make a few adjustments and start to involve your whole organisation in engagement, not just the traditional customer-facing departments:

“Provided you have all the customers in one place, you can very quickly aggregate information from lots of product data sources, including your own transactional systems, your ERP systems, and also external feeds from social media, and then aggregate that together in real time,” Anderson states.

“This is the system that’s built for engagement. Based on the relative closeness between your team and your customer, you can use predictive analytics, previous buying trends and patterns, and give yourself a fairly accurate percentage chance  of success. Once you start playing with different variables and calculate things in real time, you are more likely to experience success.

“It’s a guide; a completely different approach to selling. It’s come to the point when there’s a strong emotional connection between customer and brand, and it’s based on a mutuality, where there is value in it for the customer and the brand. That value for the brand doesn’t always need to be a transaction, it can be loyalty, advocacy. It’s measured in many ways; customer lifetime value – how much of an advocate is this customer for your business? These are the areas you need to start considering beyond ROI.”

Social media is inevitably a big part of what Anderson and SAP are now pitching as a “new era for CRM”. In that respect, businesses are also warned of one common mistake – lumping social together into one channel. Anderson believes the difference between say, TripAdvisor and Facebook – both ‘social’ networks in their own right but both inherently different – shows that it is too dangerous to just hire a social media guru and then proclaim that you’re a socially engaged business.

“The way in which people use social media differs depending on the device, it differs depending on the actual platform, so you can’t really just stick social together,” he adds. “Each dictates a different need at a different time, and that’s when journey maps become so important, because you become optimised for the customer need.

“One other aspect here is your website. Why are people hitting your website at a certain point, at a certain time of the day, and when they do, what are they looking for? Has some kind of event happened? Has a competitor launched a product? If you can understand this stuff, you can form better experiences for the customers.”

Trepidation ahead?

If Paul Greenberg is right about customer engagement, then we’ve all got some big changes on the horizon, and some big decisions to make. While the definition of engagement may still be up for grabs, the premise is evidently bigger than CRM, and requires a rethink of how your business understands its customers before they make first contact; and how you guide them through the customer journey once they do. That’s likely to strike fear into many an organisation, but Jamie Anderson believes that the need for better customer engagement will ultimately mean the right companies rise to the challenge: 

“There’s trepidation out there, yes, because some firms are struggling to understand the benefits of becoming engaged.

“Ultimately, a brand that’s easy to do business with and is transparent, trustworthy, well they’re halfway there, essentially. Think about it from the customer’s angle; what they’re trying to achieve when they walk into your store. Understand why they’re there and start to map the journey. If you do that, then you can apply technology that’s much more effective.”

Replies (5)

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By LinkedIn Group Member
02nd Jul 2014 09:41

Very well explained Chris, thanks for posting. A customer 'relationship' comprise 4 data sets 1. unsaid 2. said 3. done and 4. felt. CRM systems capture 3 very well, 2 perhaps, 4 maybe. It's a question of finding innovative ways to complete the 1-4 loop that customers will accept in the right spirit.

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By LinkedIn Group Member
02nd Jul 2014 09:42

Yes Terence, there is a saying - "after all is said and done, there is always more said than done". However, on top of that there is x5 more unsaid than said and x10 more felt than unsaid. it kinda puts it into perspective, dont you think.

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By LinkedIn Group Member
02nd Jul 2014 09:45

Not if u use bit.ly/whatishccx Steve ;)

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By LinkedIn Group Member
02nd Jul 2014 09:46

good answer

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By LinkedIn Group Member
02nd Jul 2014 09:48

I must have missed that Valhalla of which you speak since I don't recall a time when the call center was ever that popular. And to be clear, Paul isn't giving anything a seal of approval, merely stating the obvious about a subset of CRM.

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