Digital Marketing: Engaging the Elusive Customer

This past week I had the opportunity to spend some time with executives from a major retail chain.  Part of our discussion revolved around the pace of change in their industry, and how quickly customer expectations are becoming increasingly-difficult to meet. 

 

Through contemporary technologies, and the availability of massive quantities of customer information, companies have the ability to engage their customers along a much wider continuum.  This continuum of engagement spans four categories: Reactive, Responsive, Predictive and Persuasive. Let’s look at each category in turn.

 

Reactive

Reactive engagement is where a business collects and analyzes historical data with the goal of building a better understanding of their customers.  Reactive engagement has been the norm since the mid-1990’s and may be seen in the massive data warehouses that exist within many, if not most, companies today.  Such warehouses typically aggregate data from several internal systems, such as point-of-sale, customer relationship management, call center management, etc., and attempt to build a profile of a business’ customers based upon their past interactions. 

While these systems have been and continue to be useful in determining trends and maintaining an historical view of customer behavior, by themselves they are woefully inadequate in a Web 2.0 world.  Whether the historical analysis looks back six months, six days or even six minutes, what’s past is past and in the instant-gratification world of smart phones, social media and apps, customers are expecting far greater interactivity from the companies that they fraternize.

 

Responsive

Responsive engagement is where businesses begin to leverage contemporary technologies such as mobility and social media to interact with their customers in real-time or near-real-time.  Such engagement must happen immediately or nearly so, as responsive interaction is lost once a few minutes have passed.  Companies using responsive engagement are actively monitoring platforms such as Facebook and Twitter, calls coming into their customer service centers, and customers’ use of dedicated apps on their smart phones.  When a customer complaint is identified on one of these platforms the business is able to identify the complaint, launch an automated workflow in response, and hopefully resolve the issue immediately; turning a negative interaction into one that is positive, or at least neutral.

Responsive engagement also means keeping track of life events in your customers’ lives and turning these life events into sales opportunities.  From having another birthday to running in their first marathon, responsive companies know what is going on in their customers’ lives and find non-intrusive ways to monetize these events. The ability to engage at this level is mature at this time, and if your business isn’t at this level of engagement by now, you’re likely already behind your competition.

 

Predictive

Predictive engagement is where customer expectations are going and where leading companies are investing today.  By combining historic information about customers with their real-time contextual information (the “where” and the “when” of where they are in the world) businesses are able to predict their customers’ behavior and identify future opportunities to engage.  This may be as simple as knowing that a customer is getting married in six months and is looking for a deal on a honeymoon, or as complex as knowing that a customer is presently in a taxi heading North on Fifth Avenue in Manhattan at 6pm on a Thursday, and is looking for a good place to pick up some Chinese food in the next 10 minutes. 

Predictive engagement recognizes the new market paradigm of a trillion “markets of one,” where each minute of each customer’s day creates a vast quantity of unique opportunities to sell to them.  Predicting customers’ future needs and presenting solutions to these needs as they appear can vastly increase a business’ value proposition to their customers, enhancing profitability and customer retention.

 

Persuasive

Finally, persuasive engagement is a step beyond predictive, where rather than passively identifying customers’ future needs businesses use their technology and data to actively drive customer behavior.  In predictive engagement we try to figure out what customers want in the future, in persuasive we actually drive customers wants; preferably towards our products and services.  

Using the previous example of the taxi ride, a company using persuasive engagement would know that their customer will be passing one or more of their stores in the next five minutes and would email them an “exploding coupon”, that offers that customer an irresistibly-good deal on something that the customer would want, but only if they stop by in the next few minutes.  The customer may have had no intention of stopping at that store at this time but the deal is good enough to convince them to change their plans, and to persuade them to make a purchase that they otherwise would not have made. 

Persuasive engagement is certainly possible today and many companies have begun dipping their toes into this mode of engagement. If persuasive engagement is cutting edge today it will likely be common place within the next 24-36 months.  Early movers into this space will necessarily build and will likely maintain a deep competitive advantage, as each predictive transaction with customers leads to an ever-deepening understanding of those same customers and a commensurate improvement in one’s ability to drive their future behavior.

 

Summary

Wherever your business presently resides on the customer engagement continuum, hopefully you have a plan for advancing your business up to persuasive engagement.  More and more organizations in more and more industries are making this move, leading customers to expect this degree of intimacy in their business interactions.  And as is typical in any information-intensive business innovation, first movers in this space may quickly build an insurmountable advantage over their competitors, as they build ever more advanced models of what their customers want and need.  As we see in our interactions with our own customers, today’s innovation rapidly becomes tomorrow’s expectation and there is every indication that the speed of business will continue to accelerate.

Comments
HenryEakland | ‎08-28-2013 10:18 AM

Very interesting observations, Chris. Thanks for defining and describing very clearly this "continuum" of customer engagement. Using these categories, I can see how a business could do a self-assessment, determine its current position along the continuum and work toward moving forward toward a next stage.

 

Clearly it is imperative for businesses in today's markets to have a plan for doing so.

Julie Hill | ‎09-04-2013 09:16 AM
Up to the minute advice Hope your readers make good use of your scholarly and perfectly presented points
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About the Author
Chris Surdak is a Subject Matter Expert on Information Governance, analytics and eDiscovery for HP Autonomy. He has over 20 years of consul...
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