If you have had any exposure whatsoever to marketing and business strategy in the last few years, you are likely familiar with (if not entirely clear on) the term ‘customer engagement’.
Fueled by the proliferation of digital technology and generation of vast quantities of consumer data, customer engagement refers broadly to the notion of collecting and using this data to create more relevant customer experiences, to increase engagement, and ultimately, to drive higher revenues.
And while this direction might make you feel more than a little overwhelmed (and possibly skeptical), the reality is that it’s here to stay. Global consulting firm McKinsey & Co. states that organizations who use data and analytics in their strategic decision-making increase productivity and profitability by 5-6%, while showing a 15-20% increase in their return on marketing investment.
In an increasingly competitive, complex, and—in some instances—commoditized business environment, those are numbers that are difficult to ignore. And that applies to business-to-consumer (B2C) as well as business-to-business (B2B) environments.
Nevertheless, data-driven marketing and customer engagement remain highly challenging for many organizations to plan, design, and effectively execute. Whether suffering from a lack of internal resources and particular skillsets or the inertia of departmental ‘silos’, businesses face a raft of obstacles as they grapple with trying to get closer to their customers to realize the full lifetime revenue opportunities available.
Are you ready, strategically and organizationally, to approach customer engagement effectively? Consider the following 5 key steps and success factors for capitalizing on this growing strategic requirement.
Data Management & Analytics
The foundation of customer engagement strategy is to first understand your data assets.
- What information do we have and where is it being stored?
- Is the information we have enough to act on or do we need to collect other data (or access it through a third party)?
- Are we doing the proper data analysis to ensure we’re generating insights and intelligence to inform our decision-making?
Proper data management and analysis will underpin all effective customer engagement, and is therefore critical to success.
Customer engagement is not a tactic. It is an organization-wide strategy that requires not only buy-in but leadership from senior management.
A senior level executive must ‘own’ and be accountable for defining what the engagement strategy looks like (including objectives), how it will be implemented, and importantly, how it will be measured.
In many organizations, this executive is the Chief Marketing Officer (CMO) given that they tend to be responsible for customer and channel communications.
The Right Talent
Much has been written lately about the need for the right skills and resources to effectively implement a data-driven marketing strategy.
Positions which did not exist a few years ago (data scientists and marketing technologists) are now in high demand, since they help to bridge the departmental and functional gaps between IT, analytics, and business/marketing strategy.
Whether hired internally or as third-party resources, organizations need to find the right blend of skillsets required to collect, manage,
interpret, and apply the data. Establishing these competencies in a separate and distinct ‘centre of excellence’ is also a best practice, though this can depend on a variety of factors including the organizations’ size and strategic requirements.
The advances in technology, including cloud services, have greatly enhanced the ability for marketers to harness the value in customer data. In fact, noted research firm Gartner stated that by 2017, marketing departments will spend more on technology than IT departments.
Yet while the technology exists to collect, manage, normalize, and visualize data, it should not be regarded as the solution to customer engagement. It is an ‘enabler’ and a tool.
Data analytics and being able to apply business intelligence to strategic application remains very much a human function.
Data Privacy & Security
With data as the new ‘currency’ in the world of marketing and engagement, consumer trust, privacy, and data security have never been more important.
It is incumbent on organizations to use customer information with integrity and transparency, and only as expected by the customer. Anything to the contrary can quickly put the relationship in jeopardy with potentially widespread implications (think ‘social media’).
Pivotal Contact is a Toronto-based data and analytics-driven engagement marketing firm. We drive incremental revenue for clients through full-service loyalty programs, particularly for B2B organizations. Evan Wood is the President of Pivotal Contact, he can be reached at email@example.com and 647-827-1230.