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September 01, 2011
Social Media: The Three Big Myths
PODCAST
#GBJinShare
Customers and marketers alike are enthralled by social
media. But can companies capitalize on it to acquire new
customers?
by Blaise James and Jim Asplund12>
Today, Facebook has more than half a billion active users; Twitter users send more than 140million tweets per day; and other social media outlets boast millions more logging in every day.
That's an enormous marketing forum, and organizations of all types have invested a fortune intousing social media to acquire customers. But does that approach actually work?
Not in the way you might think. Recently, Gallup conducted research with more than 17,000
social media users -- evaluating everything from the latest mobile social media apps to old-
school word-of-mouth. We discovered groundbreaking new insights into how people interact
with social media and into its effectiveness as a marketing tool.
These findings debunk three big myths regarding social media: that it effectively drives customer
acquisition, that social networkers are all the same, and that social networking is an online-onlyphenomenon. But more important to companies spending tons of money on social media
initiatives, Gallup's research also suggests practical actions that can make these efforts more
effective.
http://businessjournal.gallup.com/content/148694/social-media-three-big-myths.aspx#gdcontenthttp://businessjournal.gallup.com/content/148694/social-media-three-big-myths.aspx#gdcontenthttp://businessjournal.gallup.com/home.aspx?ref=logohttp://businessjournal.gallup.com/home.aspxhttp://businessjournal.gallup.com/home.aspxhttp://businessjournal.gallup.com/leadership.aspxhttp://businessjournal.gallup.com/leadership.aspxhttp://businessjournal.gallup.com/workplace.aspxhttp://businessjournal.gallup.com/workplace.aspxhttp://businessjournal.gallup.com/marketplace.aspxhttp://businessjournal.gallup.com/marketplace.aspxhttp://businessjournal.gallup.com/BookCenter/default.aspxhttp://businessjournal.gallup.com/BookCenter/default.aspxhttp://businessjournal.gallup.com/content/152672/About-Us.aspxhttp://businessjournal.gallup.com/content/152672/About-Us.aspxhttp://businessjournal.gallup.com/content/149690/PODCAST-Social-Media-Three-Big-Myths.aspxhttp://businessjournal.gallup.com/content/149690/PODCAST-Social-Media-Three-Big-Myths.aspxhttp://businessjournal.gallup.com/content/148694/social-media-three-big-myths.aspx#1http://businessjournal.gallup.com/content/148694/social-media-three-big-myths.aspx#2http://businessjournal.gallup.com/content/148694/social-media-three-big-myths.aspx#2http://businessjournal.gallup.com/content/148694/social-media-three-big-myths.aspx#2http://businessjournal.gallup.com/content/148694/social-media-three-big-myths.aspx#1http://businessjournal.gallup.com/content/148694/social-media-three-big-myths.aspx#1http://businessjournal.gallup.com/content/149690/PODCAST-Social-Media-Three-Big-Myths.aspxhttp://businessjournal.gallup.com/content/152672/About-Us.aspxhttp://businessjournal.gallup.com/BookCenter/default.aspxhttp://businessjournal.gallup.com/marketplace.aspxhttp://businessjournal.gallup.com/workplace.aspxhttp://businessjournal.gallup.com/leadership.aspxhttp://businessjournal.gallup.com/home.aspxhttp://businessjournal.gallup.com/home.aspx?ref=logohttp://businessjournal.gallup.com/content/148694/social-media-three-big-myths.aspx#gdcontent8/10/2019 Customer Engagement Capitalize Repesentative
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Myth: Social media initiatives drive customer loyalty and acquisition.
Fact: Engagement with a brand drives social engagement.
This first myth cuts to the core of what organizations want social media initiatives to accomplish:
getting new customers and keeping existing customers. Yet according to Gallup research, brand-sponsored social media initiatives have very little impact on consumer decision making. Nor do
they drive prospective customers to consider trying a brand or recommending a brand to others
in their social network. (See graphic "Key Influences on Customer Decisions.")
8/10/2019 Customer Engagement Capitalize Repesentative
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Brand-sponsored social media initiatives don't have much influence on a customer's deep rational
and emotional attachment, which we call customer engagement. Gallup analysis shows that it
works the other way around: Customer engagement with a brand drives social engagement,thedegree to which customers will work for or against your company or brand within their social
networks.
And customer engagement can't be won solely with an app. Gallup research has found that
customer engagement is the result of the fulfillment of four psychological needs and three
rational needs. For a company to benefit from social engagement, it usually must create customerengagement first. (See graphic "The Customer Engagement Hierarchy.")
8/10/2019 Customer Engagement Capitalize Repesentative
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Customer engagement
From Wikipedia, the free encyclopedia
Customer engagement(CE) is the engagement of customers with one another, with a companyor a brand. The initiative for engagement can be either consumer- or company-led and the
medium of engagement can be on or offline.
Customer engagement has been discussed widely online; hundreds of pages have been written,
published, read and commented upon. Numerous high-profile conferences, seminars androundtables have either had CE as a primary theme or included papers on the topic.
[1]
Customer engagement marketing placesconversionsinto a longer term, more strategic context
and is premised on the understanding that a simple focus on maximising conversions can, insome circumstances, decrease the likelihood of repeat conversions (Customer engagement
interview with Richard Sedley). CE aims at long-term engagement, encouraging customerloyalty and advocacy through word-of-mouth.
Online customer engagement is qualitatively different from offline engagement as the nature of
the customers interactions with a brand, company and other customers differ on the internet.Discussion forums orblogs,for example, are spaces where people can communicate and
socialise in ways that cannot be replicated by any offline interactive medium. Customer
Engagement marketing efforts that aim to create, stimulate or influence customer behaviourdiffer from the offline, one-way, marketing communications that marketers are familiar with.
Although customer advocacy, for example, has always been a goal for marketers, the rise of
onlineuser generated contentcan take advocacy to another level.
The concept and practice of online customer engagement enables organisations to respond to the
fundamental changes in customer behaviour that the internet has brought about,[2]
as well as tothe increasing ineffectiveness of the traditional 'interrupt and repeat', broadcast model of
advertising. Due to the fragmentation and specialisation of media and audiences, as well as the
proliferation of community- anduser generated content,businesses are increasingly losing the
power to dictate the communications agenda. Simultaneously, lowerswitching costs,thegeographical widening of the market and the vast choice of content, services and products
available online have weakened customer loyalty. Enhancing customers' firm- and market-
related expertise has been shown to engage customers,[3]
strengthen their loyalty,[4]
and
emotionally tie them more closely to a firm.[5]
So today, leveraging customer contributions is an important source of competitive advantagewhether through advertising, user generated product reviews,customer serviceFAQs, forums
where consumers can socialise with one another or contribute to product development.
Amazon recently re-branded into 'serving the world's largest engaged online community', the
World Federation of Advertisers (WFA) has created a 'Blueprint for Consumer-Centric Holistic
http://en.wikipedia.org/wiki/Customer_engagement#cite_note-1http://en.wikipedia.org/wiki/Customer_engagement#cite_note-1http://en.wikipedia.org/wiki/Customer_engagement#cite_note-1http://en.wikipedia.org/wiki/Conversion_%28marketing%29http://en.wikipedia.org/wiki/Conversion_%28marketing%29http://en.wikipedia.org/wiki/Conversion_%28marketing%29http://www.smartinsights.com/customer-engagement/customer-engagement-strategy/customer-engagement-interview-with-richard-sedley-of-cscape/http://www.smartinsights.com/customer-engagement/customer-engagement-strategy/customer-engagement-interview-with-richard-sedley-of-cscape/http://www.smartinsights.com/customer-engagement/customer-engagement-strategy/customer-engagement-interview-with-richard-sedley-of-cscape/http://www.smartinsights.com/customer-engagement/customer-engagement-strategy/customer-engagement-interview-with-richard-sedley-of-cscape/http://en.wikipedia.org/wiki/Blogshttp://en.wikipedia.org/wiki/Blogshttp://en.wikipedia.org/wiki/Blogshttp://en.wikipedia.org/wiki/User_generated_contenthttp://en.wikipedia.org/wiki/User_generated_contenthttp://en.wikipedia.org/wiki/User_generated_contenthttp://en.wikipedia.org/wiki/Customer_engagement#cite_note-2http://en.wikipedia.org/wiki/Customer_engagement#cite_note-2http://en.wikipedia.org/wiki/Customer_engagement#cite_note-2http://en.wikipedia.org/wiki/User_generated_contenthttp://en.wikipedia.org/wiki/User_generated_contenthttp://en.wikipedia.org/wiki/User_generated_contenthttp://en.wikipedia.org/wiki/Switching_barriershttp://en.wikipedia.org/wiki/Switching_barriershttp://en.wikipedia.org/wiki/Switching_barriershttp://en.wikipedia.org/wiki/Customer_engagement#cite_note-3http://en.wikipedia.org/wiki/Customer_engagement#cite_note-3http://en.wikipedia.org/wiki/Customer_engagement#cite_note-3http://en.wikipedia.org/wiki/Customer_engagement#cite_note-4http://en.wikipedia.org/wiki/Customer_engagement#cite_note-4http://en.wikipedia.org/wiki/Customer_engagement#cite_note-4http://en.wikipedia.org/wiki/Customer_engagement#cite_note-5http://en.wikipedia.org/wiki/Customer_engagement#cite_note-5http://en.wikipedia.org/wiki/Customer_engagement#cite_note-5http://en.wikipedia.org/wiki/Customer_servicehttp://en.wikipedia.org/wiki/Customer_servicehttp://en.wikipedia.org/wiki/Customer_servicehttp://en.wikipedia.org/wiki/Customer_servicehttp://en.wikipedia.org/wiki/Customer_engagement#cite_note-5http://en.wikipedia.org/wiki/Customer_engagement#cite_note-4http://en.wikipedia.org/wiki/Customer_engagement#cite_note-3http://en.wikipedia.org/wiki/Switching_barriershttp://en.wikipedia.org/wiki/User_generated_contenthttp://en.wikipedia.org/wiki/Customer_engagement#cite_note-2http://en.wikipedia.org/wiki/User_generated_contenthttp://en.wikipedia.org/wiki/Blogshttp://www.smartinsights.com/customer-engagement/customer-engagement-strategy/customer-engagement-interview-with-richard-sedley-of-cscape/http://www.smartinsights.com/customer-engagement/customer-engagement-strategy/customer-engagement-interview-with-richard-sedley-of-cscape/http://en.wikipedia.org/wiki/Conversion_%28marketing%29http://en.wikipedia.org/wiki/Customer_engagement#cite_note-18/10/2019 Customer Engagement Capitalize Repesentative
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Measurement' and the Association of National Advertisers (ANA), American Association of
Advertising Agencies (AAAA) and the Advertising Research Foundation (ARF), have put
together the 'Engagement Steering Committee' to work on the customer engagement metric.Nielsen Media Research, IAG Research and Simmons Research are also all in the process of
developing a CE definition and metric.[6]
Online customer engagement refers to:
1. A social phenomenonenabled by the wide adoption of the internet in the late 1990s andtaking off with the technical developments in connection speed (broadband) in the decade
that followed. Online CE is qualitatively different from the engagement of consumers
offline.2. The behaviour of customersthat engage in online communities revolving, directly or
indirectly, around product categories (cycling, sailing) and other consumption topics. It
details the process that leads to a customers positive engagement with the company or
offering, as well as the behaviours associated with different degrees of customer
engagement.3. Marketing practicesthat aim to create, stimulate or influence CE behaviour. Although
CE-marketing efforts must be consistent both online and offline, the internet is the basisof CE-marketing.(Eisenberg & Eisenberg 2006:72,81)
4. Metricsthat measure the effectiveness of the marketing practices which seek to create,
stimulate or influence CE behaviour.
Contents
1 Definition
2 The need for customer engagement
3 Customer engagement as a social phenomenon 4 Customer engagement as consumer behaviour
5 Customer engagement as a metric
6 See also
7 References
8 Sources
Definition
In March 2006, theAdvertising Research Foundationannounced the first definition of customerengagement
[7]the first definition of CE at the re:think! 52nd Annual ARF Convention and Expo:
"Engagement is turning on a prospect to a brand idea enhanced by the surrounding context."
However, the ARF definition was criticized by some for being too broad.[8]
Because the various definitions often focus on entirely different aspects of CE, they are not in
every case competing definitions but, rather, illuminate CE from different perspectives.Eric
http://en.wikipedia.org/wiki/Customer_engagement#cite_note-Getting_to_Engagement-6http://en.wikipedia.org/wiki/Customer_engagement#cite_note-Getting_to_Engagement-6http://en.wikipedia.org/wiki/Customer_engagement#cite_note-Getting_to_Engagement-6http://en.wikipedia.org/wiki/Customer_engagement#Definitionhttp://en.wikipedia.org/wiki/Customer_engagement#Definitionhttp://en.wikipedia.org/wiki/Customer_engagement#The_need_for_customer_engagementhttp://en.wikipedia.org/wiki/Customer_engagement#The_need_for_customer_engagementhttp://en.wikipedia.org/wiki/Customer_engagement#Customer_engagement_as_a_social_phenomenonhttp://en.wikipedia.org/wiki/Customer_engagement#Customer_engagement_as_a_social_phenomenonhttp://en.wikipedia.org/wiki/Customer_engagement#Customer_engagement_as_consumer_behaviourhttp://en.wikipedia.org/wiki/Customer_engagement#Customer_engagement_as_consumer_behaviourhttp://en.wikipedia.org/wiki/Customer_engagement#Customer_engagement_as_a_metrichttp://en.wikipedia.org/wiki/Customer_engagement#Customer_engagement_as_a_metrichttp://en.wikipedia.org/wiki/Customer_engagement#See_alsohttp://en.wikipedia.org/wiki/Customer_engagement#See_alsohttp://en.wikipedia.org/wiki/Customer_engagement#Referenceshttp://en.wikipedia.org/wiki/Customer_engagement#Referenceshttp://en.wikipedia.org/wiki/Customer_engagement#Sourceshttp://en.wikipedia.org/wiki/Customer_engagement#Sourceshttp://en.wikipedia.org/wiki/Advertising_Research_Foundationhttp://en.wikipedia.org/wiki/Advertising_Research_Foundationhttp://en.wikipedia.org/wiki/Advertising_Research_Foundationhttp://en.wikipedia.org/wiki/Customer_engagement#cite_note-7http://en.wikipedia.org/wiki/Customer_engagement#cite_note-7http://en.wikipedia.org/wiki/Customer_engagement#cite_note-7http://en.wikipedia.org/wiki/Customer_engagement#cite_note-8http://en.wikipedia.org/wiki/Customer_engagement#cite_note-8http://en.wikipedia.org/wiki/Customer_engagement#cite_note-8http://en.wikipedia.org/wiki/Eric_Petersonhttp://en.wikipedia.org/wiki/Eric_Petersonhttp://en.wikipedia.org/wiki/Eric_Petersonhttp://en.wikipedia.org/wiki/Customer_engagement#cite_note-8http://en.wikipedia.org/wiki/Customer_engagement#cite_note-7http://en.wikipedia.org/wiki/Advertising_Research_Foundationhttp://en.wikipedia.org/wiki/Customer_engagement#Sourceshttp://en.wikipedia.org/wiki/Customer_engagement#Referenceshttp://en.wikipedia.org/wiki/Customer_engagement#See_alsohttp://en.wikipedia.org/wiki/Customer_engagement#Customer_engagement_as_a_metrichttp://en.wikipedia.org/wiki/Customer_engagement#Customer_engagement_as_consumer_behaviourhttp://en.wikipedia.org/wiki/Customer_engagement#Customer_engagement_as_a_social_phenomenonhttp://en.wikipedia.org/wiki/Customer_engagement#The_need_for_customer_engagementhttp://en.wikipedia.org/wiki/Customer_engagement#Definitionhttp://en.wikipedia.org/wiki/Customer_engagement#cite_note-Getting_to_Engagement-68/10/2019 Customer Engagement Capitalize Repesentative
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Peterson's definition[9]
for example frames CE as a metric: "Engagement is an estimate of the
degree and depth of visitor interaction against a clearly defined set of goals."
At the moment the ARF,World Federation of Advertisers,[10]
Nielsen Media Research,IAG
ResearchandSimmons Researchare in the process of developing a definition and a metric for
CE.
[6]
Since 2009, a number of new definitions have emerged in the literature. To illustrate, Hollebeek
(2011)[11]
defines a customer's engagement (CE) with a specific brand as "the level of acustomers cognitive, emotional and behavioral investment in specific brand interactions," and
identifies the three CE dimensions of immersion (cognitive), passion (emotional) and activation
(behavioral). Further, Brodie et al. (2011)[12]
define CE as "a psychological state that occurs byvirtue of interactive, co-creative customer experiences with a particular agent/object (e.g. a
brand). The authors posit CE occurs under a specific set of context-dependent conditions
generating differing CE levels. They also state CE exists as a dynamic, iterative process that co-
create value, and that CE is a multi-dimensional concept subject to a context- and/or stakeholder-
specific expression of relevant cognitive, emotional and/or behavioral dimensions.
The need for customer engagement
CE-marketing is necessitated by a combination of social, technological and market
developments:
1. Businesses are losing the power to dictate the communications agenda:[13]
The
effectiveness of the traditional 'interrupt and repeat' model of advertising is decreasing.[14]
In
August 2006, McKinsey & Co published a report[15]
which said that by 2010 traditional TVadvertising will only be one-third as effective as it was in 1990.
[16]This is due to:
Customer audiences are smaller and specialist: The fragmentation of media and audiences and
the accompanying reduction of audience size[17]
have reduced the effectiveness of the traditional
top-down, mass, 'interrupt and repeat' advertising model. The adoption of new media. Forrester
Research's North American Consumer Technology Adoption Study[15]
shows people in the 18-26age group spending more time online than watching TV.
[18]In response to the fragmentation and
increased amount of time spent online, marketers have also increased spending in online
communication. ContextWeb analysts found marketers who promote on sites like Facebook andNew York Times are not as successful at reaching consumers while marketers who promote
more on niche websites have a better chance of reaching their audiences.[19]
Customer audiences are also broadcasters: A company's position is no longer just insideconsumers' minds. As they increasingly speak their minds with the power for circulation and
permanence of CGM, businesses lose the power of shouting over everyone else. Instead of trying
to position a product using a couple of static messages that will themselves become the subject ofconversation amongst atarget marketthat has already discussed, positioned and rated the
product, companies must join in. This also means that consumers can now choose not only when
and how but, also, if they will engage with marketing communications;[20]
they can rely on
http://en.wikipedia.org/wiki/Eric_Petersonhttp://en.wikipedia.org/wiki/Eric_Petersonhttp://en.wikipedia.org/wiki/Customer_engagement#cite_note-webanalyticsdemystified.com-9http://en.wikipedia.org/wiki/Customer_engagement#cite_note-webanalyticsdemystified.com-9http://en.wikipedia.org/wiki/World_Federation_of_Advertisershttp://en.wikipedia.org/wiki/World_Federation_of_Advertisershttp://en.wikipedia.org/wiki/Customer_engagement#cite_note-10http://en.wikipedia.org/wiki/Customer_engagement#cite_note-10http://en.wikipedia.org/wiki/Nielsen_Media_Researchhttp://en.wikipedia.org/wiki/Nielsen_Media_Researchhttp://en.wikipedia.org/wiki/Nielsen_Media_Researchhttp://en.wikipedia.org/w/index.php?title=IAG_Research&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=IAG_Research&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=IAG_Research&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=IAG_Research&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Simmons_Research&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Simmons_Research&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Simmons_Research&action=edit&redlink=1http://en.wikipedia.org/wiki/Customer_engagement#cite_note-Getting_to_Engagement-6http://en.wikipedia.org/wiki/Customer_engagement#cite_note-Getting_to_Engagement-6http://en.wikipedia.org/wiki/Customer_engagement#cite_note-Getting_to_Engagement-6http://en.wikipedia.org/wiki/Customer_engagement#cite_note-11http://en.wikipedia.org/wiki/Customer_engagement#cite_note-11http://en.wikipedia.org/wiki/Customer_engagement#cite_note-11http://en.wikipedia.org/wiki/Customer_engagement#cite_note-12http://en.wikipedia.org/wiki/Customer_engagement#cite_note-12http://en.wikipedia.org/wiki/Customer_engagement#cite_note-12http://en.wikipedia.org/wiki/Customer_engagement#cite_note-13http://en.wikipedia.org/wiki/Customer_engagement#cite_note-13http://en.wikipedia.org/wiki/Customer_engagement#cite_note-13http://en.wikipedia.org/wiki/Customer_engagement#cite_note-14http://en.wikipedia.org/wiki/Customer_engagement#cite_note-14http://en.wikipedia.org/wiki/Customer_engagement#cite_note-14http://en.wikipedia.org/wiki/Customer_engagement#cite_note-wfanet.org-15http://en.wikipedia.org/wiki/Customer_engagement#cite_note-wfanet.org-15http://en.wikipedia.org/wiki/Customer_engagement#cite_note-wfanet.org-15http://en.wikipedia.org/wiki/Customer_engagement#cite_note-16http://en.wikipedia.org/wiki/Customer_engagement#cite_note-16http://en.wikipedia.org/wiki/Customer_engagement#cite_note-16http://en.wikipedia.org/wiki/Customer_engagement#cite_note-17http://en.wikipedia.org/wiki/Customer_engagement#cite_note-17http://en.wikipedia.org/wiki/Customer_engagement#cite_note-17http://en.wikipedia.org/wiki/Customer_engagement#cite_note-wfanet.org-15http://en.wikipedia.org/wiki/Customer_engagement#cite_note-wfanet.org-15http://en.wikipedia.org/wiki/Customer_engagement#cite_note-wfanet.org-15http://en.wikipedia.org/wiki/Customer_engagement#cite_note-18http://en.wikipedia.org/wiki/Customer_engagement#cite_note-18http://en.wikipedia.org/wiki/Customer_engagement#cite_note-18http://en.wikipedia.org/wiki/Customer_engagement#cite_note-19http://en.wikipedia.org/wiki/Customer_engagement#cite_note-19http://en.wikipedia.org/wiki/Customer_engagement#cite_note-19http://en.wikipedia.org/wiki/Target_markethttp://en.wikipedia.org/wiki/Target_markethttp://en.wikipedia.org/wiki/Target_markethttp://en.wikipedia.org/wiki/Customer_engagement#cite_note-20http://en.wikipedia.org/wiki/Customer_engagement#cite_note-20http://en.wikipedia.org/wiki/Customer_engagement#cite_note-20http://en.wikipedia.org/wiki/Customer_engagement#cite_note-20http://en.wikipedia.org/wiki/Target_markethttp://en.wikipedia.org/wiki/Customer_engagement#cite_note-19http://en.wikipedia.org/wiki/Customer_engagement#cite_note-18http://en.wikipedia.org/wiki/Customer_engagement#cite_note-wfanet.org-15http://en.wikipedia.org/wiki/Customer_engagement#cite_note-17http://en.wikipedia.org/wiki/Customer_engagement#cite_note-16http://en.wikipedia.org/wiki/Customer_engagement#cite_note-wfanet.org-15http://en.wikipedia.org/wiki/Customer_engagement#cite_note-14http://en.wikipedia.org/wiki/Customer_engagement#cite_note-13http://en.wikipedia.org/wiki/Customer_engagement#cite_note-12http://en.wikipedia.org/wiki/Customer_engagement#cite_note-11http://en.wikipedia.org/wiki/Customer_engagement#cite_note-Getting_to_Engagement-6http://en.wikipedia.org/w/index.php?title=Simmons_Research&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=IAG_Research&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=IAG_Research&action=edit&redlink=1http://en.wikipedia.org/wiki/Nielsen_Media_Researchhttp://en.wikipedia.org/wiki/Customer_engagement#cite_note-10http://en.wikipedia.org/wiki/World_Federation_of_Advertisershttp://en.wikipedia.org/wiki/Customer_engagement#cite_note-webanalyticsdemystified.com-9http://en.wikipedia.org/wiki/Eric_Peterso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CGM. In addition new media themselves provide consumers with more control over their
advertising consumption.[21]
2. Decreasingbrand loyalty:The lowering of entry barriers (such as the need for a sales force,
access to channels and physical assets) and the geographical widening of the market due to the
internet have brought about increasing competition. In combination with lower switching costs,easier access to information about products and suppliers and increased choice customer loyalty
is hard to achieve.
The increasing ineffectiveness of TV advertising due to the shift of consumer attention to the
internet, the ability, within new media, to control advertising consumption and the decrease in
audience size is bringing about a progressive shift of advertising spending online.[22]
The proliferation of media that provide consumers with more control over their advertising
consumption (subscription-based digital radio and TV for example) and the simultaneousdecrease of trust in advertising and increase of trust in peers
[23]point to the need for
communications that the customer will desire to engage with. Stimulating a consumersengagement with a brand is the only way to increase brand loyalty and, therefore, "the best
measure of current and future performance".[24]
CE is the solution that marketers have devised in order to come to terms with the social,technological and market developments outlined above. In a nutshell, it is the attempt to createan engaging dialogue with target consumers and stimulate their engagement with the brand.
Although this must take place consistently both on and off-line, the internet is the primary
vehicle for doing so.
CE marketing begins with understanding the internal dynamics of these developments and,
especially, the behaviour and engagement of consumers online. That way, business opportunitiescan be identified. As Max Kalehoff[25]
suggests,consumer-generated mediashould play a
massive role in our understanding and modelling of engagement. The control Web 2.0
consumers have gained must, and will be, quantified through 'old school' marketing performancemetrics.
[26]
Customer engagement as a social phenomenon
Online inter-customer engagement is a recentsocial phenomenonthat came about through the
wide diffusion and adoption of the internet in western societies during the late 1990s. Although
offline CE predates online CE, the latter is a qualitatively different social phenomenon unlike
any offline CE that social theorists or marketers are familiar with.
People also engage online in communities that do not necessarily revolve around a particularproduct, but serve as meeting or networking places, for instance on MySpace. The people in
one's MySpace friend's list do not necessarily all share a single consumption habit, although theyoften do.
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People's online engagement with one another has brought about both the empowerment of
consumers and the opportunity for businesses to engage with their target customers online. A
2011 market analysis revealed that 80% of online customers, after reading negative onlinereviews, report making alternate purchasing decisions, while 87% of consumers said a favorable
review has confirmed their decision to go through with a purchase.[citation needed]
Customer engagement as consumer behaviour
CE behaviour became prominent with the advent of the social phenomenon of online CE.
Creating and stimulating customer engagement behaviour has recently become an explicit aim ofboth profit and non-profit organisations in the belief that engaging target customers to a high
degree is conducive to furthering business objectives.
Shevlin's definition of CE is well suited to understanding the process that leads to an engaged
customer. In its adaptation by Richard Sedley the key word is 'investment'.
"Repeated interactions that strengthen the emotional, psychological or physical investment acustomer has in a brand."
A customer's degree of engagement with a company lies in a continuum that represents the
strength of his investment in that company. Positive experiences with the company strengthen
that investment and move the customer down the line of engagement.
What is important in measuring degrees of involvement is the ability of defining and quantifying
the stages on the continuum. One popular suggestion is a four-level model adapted fromKirkpatrick's Levels:
1.
Click- A reader arrived (current metric)2. Consume- A reader read the content
3. Understood- A reader understood the content and remembers it
4. Applied- A reader applies the content in another venue
Concerns have, however, been expressed as regards the measurability of stages three and four.
Another popular suggestion isGhuneim'stypology of engagement.[27]
Degrees of
EngagementLow Medium High Highest
AdoptionCollaborative
Filtering Content Creation Social
Bookmarking,Tagging, Adding
to group
Rating, Voting,
Commenting,
Endorsing,Favouritising
Upload (User Generated
Content),Blogging,Fancommunity participation,
Create mash-ups,
Podcasting,Vlogging
Adding Friends,
Networking,
Create FanCommunity
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The following consumer typology[28]
according to degree of engagement fits well to Ghuneim's
continuum.
Creators(smallest group)
Critics
Collectors Couch Potatoes(largest group)
Engagement is a holistic characterisation of a consumer's behaviour, encompassing a host of sub-aspects of behaviour such as loyalty, satisfaction, involvement, Word of Mouth advertising,
complaining and more.
Satisfaction: Satisfaction is simply the foundation, and the minimum requirement, for a
continuing relationship with customers. Engagement extends beyond mere satisfaction.[29]
Loyalty - Retention: Highly engaged consumers are more loyal. Increasing theengagement of target customers increases the rate of customer retention.
Word of Mouth advertising - advocacy: Highly engaged customers are more likely toengage in free (for the company), credible (for their audience) Word of Mouth
advertising. This can drive new customer acquisition and can have viral effects.
Awareness - Effectiveness of communications: When customers are exposed to
communication from a company that they are highly engaged with, they tend to actively
elaborate on its central idea. This brings about high degrees of central processing andrecall.
[21]
Filtering: Consumers filter, categorise and rate the market from head to tail, creating
multiple, overlapping folksonomies through tagging, reviewing, rating and
recommending.
Complaint-behaviour: Highly engaged customers are less likely to complain to other
current or potential customers, but will address the company directly instead. Marketing intelligence: Highly engaged customers can give valuable recommendations
for improving quality of offering.
The behavioural outcomes of an engaged consumer is what links CE to profits. From this pointof view,
"CE is the best measure of current and future performance; an engaged relationship is probably
the only guarantee for a return on your organisation's or your clients' objectives."[30]
Simply
attaining a high level of customer satisfaction does not seem to guarantee the customer's
business.[31]
60% to 80% of customers who defect to a competitor said they were satisfied orvery satisfied on the survey just prior to their defection.
[32]
The main difference between traditional and customer engagement marketing is marked by theseshifts:
From 'reach or awareness focused' marketing communications and their metrics (GRP orpageview) towards more targeted and customised interactions that prompt the consumer
to engage with and act on the content from the outset.
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From absolute distinctions and barriers between an organisation and its target customers
towards the participation of consumers in product development, customer service and
other aspects of the brand experience.
From one-way, top-down, formal B2C and B2E interaction to continuing, dialogic,
decentralised and personalised communications initiated by either party.
Specific marketing practices involve:
Encouraging collaborative filtering:Google,Amazon,iTunes,YahooLAUNCHcast,Netflix,andRhapsodyencourage their consumers to filter, categorise and rate; that is, to
market their products. They realise consumers are not only much more adept at creating
highly-targeted taxonomies (folksonomies) given that they are more adept at delineatingthe segment they themselves constitute, but, also, that they are willing to do so for free.
And to the extent they cannot, they do it for them. If enough people like the band Groove
Armada as well as the band The Crystal Method, there may well be a stylistic connection
between them, despite the fact that ones categorised as 'downtempo' and the other 'beats
and breaks'. Such strong associations tell Yahoo! to put the two on the same playlist moreoften, and if the positive ratings continue to come in, that connection is reinforced.
(Anderson 2006:101) Amazon does the same with their customers who bought this itemalso bought recommendations.
Community development: Helping target customers develop their own communities orcreate new ones.
Community participation: (SeeCommunal marketing)Consumers do not filter and ratecompanies and their offerings within company websites only. Being able, with little
effort, cost or technical skills, to create their own online localities, a large percentage of
the filtering and rating takes place in non-sponsored, online spaces. Organisations mustgo and meet their target customers at their favoured online hangouts to not only listen butalso participate in the dialogue.
Help consumers engage with one another: Give them content (viralpodcasting,
videocasting,games, v-cards etc.) they can use to engage with one another.
Solicitation ofuser generated content:Engage them directly or indirectly with your
product by giving them the means or incentive to createuser generated content.
Customer self-service: Help them create acustomer serviceFAQ inwikiorblogformat.
Create a blog where technical support staff and customers can communicate directly.
Product co-development: Create a blog where product developers and consumers can
communicate directly.
Customer engagement as a metric
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All marketing practices, includinginternet marketing,include measuring the effectiveness of
various media along the customer engagement cycle, as consumers travel from awareness to
purchase. Often the use ofCVP Analysisfactors into strategy decisions, including budgets andmedia placement.
The CE metric is useful for:
a) Planning:
Identify where CE-marketing efforts should take place; which of the communities that the
target customers participate in are the most engaging?
Specify the way in which target customers engage, or want to engage, with the company
or offering.
b) Measuring Effectiveness: Measure how successful CE-marketing efforts have been at
engaging target customers.
The importance of CE as a marketing metric is reflected in ARF's statement:
"The industry is moving toward customer engagement with marketing communications as the
21st century metric of marketing efficiency and effectiveness."[33]
ARF envisages CE exclusively as a metric of engagement with communication, but it is not
necessary to distinguish between engaging with the communication and with the product since
CE behaviour deals with, and is influenced by, involvement with both.
Eric Peterson's definition
[34]
also frames CE as a metric:
"Engagement is an estimate of the degree and depth of visitor interaction on the site against a
clearly defined set of goals."
In order to be operational, CE-metrics must be combined with psychodemographics. It is not
enough to know that a website has 500 highly engaged members, for instance; it is imperative toknow what percentage are members of the company's target market.
[35]As a metric for
effectiveness, Scott Karp[36]
suggests, CE is the solution to the same intractable problems that
have long been a struggle for old media: how to prove value.
The CE-metric is synthetic and integrates a number of variables. The World Federation ofAdvertisers calls it 'consumer-centric holistic measurement'.[37]
The following items have allbeen proposed as components of a CE-metric:
Root metrics
Duration of visit
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Frequency of visit (returning to the site directlythrough a URL or bookmark - or
indirectly).
% repeat visits
Recency of visit
Depth of visit (% of site visited)
Click-through rate
Sales
Lifetime value
Action metrics
RSS feed subscriptions
Bookmarks, tags, ratings
Viewing of high-value or medium-value content (as valued from the organisations point-
of-view). 'Depth' of visit can be combined with this variable.
Inquiries
Providing personal information
Downloads
Content resyndication
Customer reviews
Comments: their quality is another indicator of the degree of engagement.
Ratio between posts and comments plus trackbacks.
In selecting the components of a CE-metric, the following issues must be resolved:
Flexible metric vs. Industry standard: According to some, CE "measurement has never
been one size fits-all" but should vary according to industry, organisation, business goal
etc. On the other hand, corporate clients and even agencies also desire some type of solidindex. Internal metrics could, perhaps, be developed in addition to a comparative,
industry-wide one.[38]
Other exponents of a flexible CE-metric include Bill Gassman in
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his comments toHow do you calculate engagement? Part I.Eric Peterson[9]
shares
Gassman's views.
Relative weighting: The relative weighting associated with each CE-component in an
algorithm. For instance, is subscribing to RSS more important than contributing a
comment? If yes how much more important exactly? Relative weighting links up with theissue of flexible vs. standardised metrics: Is the relative weighting going to be solidas
will be required if the CE-metric is to be standardisedor is it going to differ depending
on the industry, organisation, business goals etc.?
Component measurability: Most of the components of a CE-metric face problems of
measurement. Duration of visit for example suffers from (a) failing to capture the mostengaged users who like to peruse RSS feeds; (b) inaccuracy arising from leaving a tab
open during breaks, stopping to converse with co-workers, etc.
Length of measurement: For how long must the various CE components be measured if
CE is to reflect loyalty rather than short-term, faddish engagement?
See also
Right-time marketing
References
1. Jump up ^See for exampleAAAA & ARFs Consumer Engagement Conference 2006,
iMedia Agency Summit 2006,Experians Future of Information Summit 2007.
2.
Jump up ^Eisingerich, Andreas B.; Kretschmer, Tobias (March 2008)."In E-Commerce, More is More".Harvard Business Review86: Pages 2021.
3. Jump up ^Eisingerich, Andreas B.; Bell, Simon J. (October 2008)."CustomerEducation Increases Trust: Service Companies Shouldn't Worry About Teaching Their
Customers Too Much".MIT Sloan Management Review50: Pages 1011.
4. Jump up ^Eisingerich, Andreas B.; Bell, Simon J. (February 2008)."Perceived ServiceQuality and Customer Trust: Does Enhancing Customers' Service Knowledge Matter?".
Journal of Service Research10: Pages 256268.
5. Jump up ^Bell, Simon J.; Eisingerich, Andreas B. (2007)."The Paradox of Customer
Education: Customer Expertise and Loyalty in the Financial Services Industry".European Journal of Marketing41: 466486.
6. ^Jump up to:abGetting to Engagement
7.
Jump up ^Advertising Industry 'Turned On' by New Measurement Model
8. Jump up ^Marketers Mulling ARF's 'Engagement' Definition9. ^Jump up to:
abHow do you calculate engagement? Part II
10.Jump up ^Blueprint for Consumer-Centric Holistic Measurement
11.Jump up ^Hollebeek, L.D. (2011), Exploring Customer Brand Engagement: Definition& Themes, Journal of Strategic Marketing, 19 (7), 555-573.
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Customer Engagement Capitalize Repesentative
14/14
12.Jump up ^Brodie, R.J., Hollebeek, L.D., Ilic, A. & Juric, B. (2011), Customer
Engagement: Conceptual Domain, Fundamental Propositions & Implications for
Research in Service Marketing, Journal of Service Research, 14 (3), 252-271.13.Jump up ^Anderson 2006:98-99, Locke et al 2001
14.Jump up ^ARF on EngagementBlueprint for Consumer-Centric Holistic Measurement
Can Web 2.0 user engagement be measured?15.^Jump up to:abTraditional TV advertising is losing efficacy: McKinsey
16.Jump up ^See also Anderson 2006:1-13
17.Jump up ^Anderson 2006:1-13
18.Jump up ^See also Anderson (2006:166) and Eisenberg and Eisenberg (2006:73)19.Jump up ^http://www.marketingforecast.com/archives/10560
20.Jump up ^(Huffman in Eisenberg and Eisenberg 2006:39)
21.^Jump up to:abRequest for Proposals: Measurement of engagement in live brand
experiences. See ARF website22.Jump up ^Advertisers are starting to find television a turn-off
23.Jump up ^Anderson 2006:98-99, Levine et al 2001:xxiii
24.
Jump up ^2006 Annual Online CE Survey25.
Jump up ^Engagement & CGM Top 2007 Marketing Trends
26.Jump up ^Can Web 2.0 user engagement be measured?
27.Jump up ^Mark Ghuneim,Terms of Engagement Measuring the Active Consumer,Mar
26, 200828.Jump up ^Webinar Notes: Web 2.0 How to Measure Social Engagement: Blogs
Podcasts and RIAs
29.Jump up ^Building Customer Engagement30.Jump up ^2006 Annual Online CE Survey
31.Jump up ^Building Customer Engagement
32.Jump up ^[Eisenberg and Eisenberg 2006:32]
33.Jump up ^'Request for Proposals: Measurement of engagement in live brandexperiences' - see ARF website
34.Jump up ^How do you calculate engagement? Part II
35.Jump up ^Engagement, Conversion, Measure36.Jump up ^New Media Frets Over Engagement and Audience Measurement: Sounds A
Lot Like Old Media
37.Jump up ^See the 'Blueprint for Consumer-Centric Holistic Measurement'38.Jump up ^Like Nailing Down A Shadow: The Problem with Social Media
Measurement
Sources
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Eisenberg B. and Eisenberg J., (2006) "Waiting for Your Cat to Bark?", Thomas Nelson,Nashville
Locke et al. (2001) "The Cluetrain Manifesto", Perseus Books Group
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