This is the first in a two part series exploring the notion of consumer engagement: what it means, how it’s defined, and how it can be employed – particularly by organizations operating in or entering into emerging markets.
This is a term that is broadly defined and loosely applied.
In fact, you’ve probably heard these, or similar aphorisms, dozens of times over the last few years: “Consumer engagement is the definitive predictor of business growth”, “Customers who are engaged with a brand are more loyal and profitable” , “Organizations can no longer expect to survive on their product alone”, “Engaging consumers through meaningful experiences should be a priority for all organizations…”
And so on, and so forth.
But, what does the nebulous concept of successfully engaging consumers really mean?
At its core, engagement makes reference to how a consumer interacts with a brand or product. It refers to the level or intensity of a customer’s participation with, and connection to, an organization’s products or activities. These interactions are offered by the company and then chosen by the consumer.
Consumer engagement is important because it can shape experiences that lead to brand affinity. It can also help forge an emotional connection between a consumer and a brand, leading to increased customer lifetime value. And these all lead to a positive impact on your bottom line.
In short, engagement means your product has been accepted into a person’s daily life. Engagement means your product works (and that your business is healthy).
In India, where internet penetration is growing rapidly but is still only at 19%, engaging consumers is still done primarily through offline sources. Last year, Indian companies spent, on average, only one-fifth of their marketing budget on digital advertising.
However, this is likely to change swiftly. It’s expected that the number of Indians using smartphones will exceed 200 million by the end of this year. Already, 67% of current urban internet users have internet access on their phone, and this is only going to increase. The Chief Revenue Officer for Indian online shopping store Myntra recognizes, “The growth in internet usage in India, largely on mobile devices, is the key driver for e-commerce growth.”Organizations who do not engage with their consumers on mobile will be left in the cold.
The most successful brands moving forward are going to be those who engage with customers by pre-empting what they want, and do this with data informed strategy.
Already many businesses are investing considerable amounts of time and money on collecting data in an attempt to better understand and capitalize on interactions with customers. Indian telcos, for example, collate data on customers and use predictive models in order to tailor customer service so that consumer engagement is higher, and therefore customer churn lower.
Data can be a powerful tool to customize user experiences, and – in theory – the more data you have access to, the more personal you can make your customers’ experiences, and the better engagement you will have across the board.
But don’t be fooled into thinking that having access to data means you know how to use it in order to understand consumer engagement. So many organizations fall down at this point and are not equipped to make data into something applicable.
There are multiple services out there now to help collect and analyze your data. Many large Indian businesses have moved away from using generic data tools, such as Google analytics, and are investing heavily in custom paid tools because they realize actually understanding if you’re making a tangible impact to your organization is tricky.
In fact, globally, most people are still having a hard time getting their heads around how to interpret the data being collected for the purposes of understanding customer engagement. Hence the sexiness of the job title “data scientist” as it contains a holy grail for most organizations: someone who can make data actionable.
Twitter cofounder Ev Williams claims that the discourse used to describe engagement success need to be more rigorously examined because what success means for one organization is probably very different from what it means to another.
For example, if we look at the single metric of unique visitors as a measure for engagement success, then BuzzFeed would be considered more successful than the New York Times. Or, if we use the single metric of shares on Facebook, then a relatively unknown site called PlayBuzz is more successful than not only BuzzFeed, but also the New York Times and US Fox News.
When Instagram announced it had 300 million users, the internet exploded with claims that Instagram was now bigger than Twitter – but does that mean it has a more significant impact than Twitter? We also see news of startups claiming they have ‘billions of interactions’ with no definition of what these interactions actually are – are they a significant communication or just an accidental swipe on their app?
Basically, these numbers are giving us an embellished story.
The examples above show that often a very one-dimensional view of how we define consumer engagement success is used. Evaluating different organizations using only one metric will not give you the whole story. Will Oremus sums it up nicely in his Slate article when he says:
“So is Instagram larger than Twitter? No – it’s different to Twitter. One is largely private, the other largely public. One focuses on photos, the other on ideas. They’re both very large, and they’re both growing.”
His point is that engagement means different things to different organizations and the importance of specific engagement metrics differs vastly between companies. An online news service – such as the Indian newspaper Dainik Jagran – values the information garnered from consumers’ TTR (total time reading) ahead of the number of unique views it receives. FlipKart on the other hand, values data such as purchase behavior and product browsing history.
But don’t be scared off by the fact engagement is a tricky beast.
Sure, successful engagement does not have an easy ‘one size fits all’ solution. Nor should it be simply a small component of your product or business strategy.
But engagement should be a part of your DNA – like it is at Mavin, where we’re working toward being a data led organization from the get go – working to increase engagement for all of our customers. Because we know that understanding your organization’s definition of, and benchmarks for, engagement is critical in order for results to matter.
Engagement is a worthy objective to invest in and pursue, because if you can grow awareness of your brand, product, app or experience and encourage a feedback loop between you and your users, then you can hope to see what we consider a truly healthy business – one that is a pleasure to interact with and improves the daily life of your consumers.
The question remains, HOW?
Find out next time, on the Mavin blog.