What is Online Customer Engagement and why should organizations care?

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As you know (or might not), I am working in the World Class Customer Management practice of Atos Consulting. My focus is Online Customer Management. Part of our work as consultants is keeping an eye out for trends and assessing the impact these have on organizations. We identify 6 trends, which will impact the online customer management of organizations. These are:

  • the social web
  • shift of control
  • convergence of media
  • decreasing time to market
  • full self service
  • transparency

Because I focus on everything online, I will take you a little deeper into online customer engagement: what it is, what the trends are and why organizations should care.

Online Customer Engagement defined:

  • refers to the online engagement of customers with one another, with a company or a brand
  • the initiative for engagement can be either consumer- or company led
  • Online Customer Engagement is qualitatively different from offline Customer Engagement as the nature of the customer’s interactions with a brand, company and other customers differ on the internet
What it is:
  • a social phenomenon enabled by the wide adoption of the internet
  • the behavior of customers that engage in online communities revolving, directly or indirectly, around product categories and other consumption topics
  • marketing practices that aim to create, stimulate or influence CE behavior
  • and of course metrics to measure the effectiveness

Why it matters:

The recently conducted and published Online Customer Engagement Survey 2008, based on 1000+ participants, delivers the following key findings:

  • online customer engagement is either ‘essential’ or ‘important’ to their organizations (90%)
  • online customer engagement’s importance has increased in the last 12 months (77%)
  • key benefits are ‘improved customer loyalty’ and ‘increased revenue’
  • consistent online and off-line customer experience is ‘essential’ or ‘very important’ (86%)
  • customer engagement is still more about getting the basics right than adopting Web 2.0 tools and technologies. However, on a tactical level, the most commonly used methods of engagement are blogging sites, video-sharing sites and social networking
  • ‘efficient and accessible customer services’ have the primary strategic focus, followed by: ‘consistent online and offline customer experience’ and ‘building a sense of community around product / services / brand’ and ‘compelling and persuasive copy’
  • the mobile channel will become increasingly important for engaging customers (64%)
  • barriers to better online customer engagement include the usual suspects: ‘Lack of resources (budget and time)’, ‘complexity or organisation’ and ‘organisational incoherence, culture or (lack of) will’.

Conclusion:

When taking a step back, looking at where we are now and the trends we have identified, one key conclusion must be that the days of a top-down, ‘broadcast’ approach to marketing are over! The main conclusions I draw are:

  1. customer engagement is becoming increasingly strategically important
  2. the online component of customer engagement is more important than the off-line, and will become increasingly more important
  3. the ‘shift of control from business initiated communication, towards customer initiated ‘customer-to-customer’ and customer-to-business’ interaction requires a different customer focused culture and online competencies and skills, at all levels of the organization. These are currently not sufficiently present.
  4. it will be interesting to see what the impact of these developments are on the desired maturity level of the organization and the E-Business Maturity Model itself. My assumption is that the online developments will necessitate organizations to adapt and change towards a truly customer focused organization, sharing their control over their core processes with customers, suppliers and even potential customers.

This means that we no longer should talk about ‘Online Customer Management’. Perhaps a better description would be ‘Online Customer Engagement’!

Further reading:

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