Every CEO or business owner knows the importance of attracting new customers. That’s why most companies spend a significant part of their budgets on marketing and advertising to develop customer engagement among repeat and new customers.
But a recent Gallup survey suggests that developing customer engagement – which the company describes as “a customer’s emotional or psychological attachment to a brand, product, or company” – may offer a more effective growth strategy. In fact, Gallup goes so far as to call it the definitive predictor of business growth.
To measure the quality of customer engagement, Gallup breaks it down into three categories:
- Fully engaged. This represents the “gold standard” for desirable customers. They are emotionally attached and rationally loyal to your company. They’ll go out of their way to find your product or service. And they won’t accept substitutes. As true brand ambassadors, these are your most valuable and profitable customers.
- Indifferent. Customers in this middle category are emotionally and rationally neutral. When it comes to your product or service, they can take it or leave it, and it doesn’t take much to get them to switch to a competitor. Not exactly the kind of customer you can build a winning business around. Although Gallup doesn’t specify, my guess is this represents the largest category for most businesses.
- Actively disengaged. The bottom level of customers feels emotionally detached from you and your product or services, and will readily switch brands. If switching is difficult or impossible, they may become virulently antagonistic toward your company, and will go out of their way to tell others about how lousy your product, service or company is.
Interestingly, it doesn’t take a lengthy survey to separate customers into these categories. In fact, Gallup calculates its customer engagement score by having customers agree or disagree with three simple statements:
- The company always delivers on its promise.
- I feel proud to be a customer of this company.
- This is the perfect company for people like me.
Creating the Engaged Customer
The challenge for every business is moving customers from the second and third categories into the first one.
Start by making customers your #1 priority. This means every employee in the company needs to be responsible for customer satisfaction. Not just those who work directly with the customer, but every employee. Make it easy for customers to do business with you. And make sure you know (don’t guess) what really motivates them to buy your product or service.
Use two-way communication to strengthen customer relationships. The old days of sending out a customer satisfaction survey once a year are long gone. Make customers part of your team. Find new ways to communicate with them (i.e. social media) and new ways to leverage what they tell you. Make doing business with you as transparent as possible. Constantly ask customers how you’re doing and how you can do better.
Turn customer data into customer information. Develop new ways of gathering, analyzing and using the information customers provide about how you can help solve their problems and achieve their goals. Make sure this information gets to everyone in your organization who needs it.
Most important, challenge everything you think you know about your customers. Ask questions like:
- When was the last time we thoroughly reviewed our customer relationships?
- What has changed in our world since then?
- What has changed in our customers’ world since then?
- What assumptions are we making about our customers that may no longer be true?
- What assumptions are we making about how to deliver value to our customers that no longer may be true?
- How do we define customer value?
- What do our customers really buy from us (and why)?
- If we started this business over from scratch, what would we do differently to build and sustain strong customer relationships?
- Could your business benefit from using an SEO company to expose your company, brand and website to customers using search engines to search for your products?
A generation or two ago, you could probably do this exercise every three to five years and get away with it. Today, this needs to be an annual exercise at minimum. Depending on your industry, six or even three months may be better.
You can have the majority of your customers into categories two and three and still have a business. But if you don’t have engaged customers, you don’t have a winning business. And what’s the point if you’re not in it to win?
Call to action: Schedule a meeting with your management team to challenge your assumptions about your customers.