How customer engagement unlocks your brand’s growth

Customer care findings show, for example, that in retail banking, fully engaged customers bring 37 per cent more annual revenue to their primary bank. FILE PHOTO | NMG 

By ABIGAEL SUM

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Summary

• Customer engagement, summarised as the emotional and psychological attachment to a brand, product, or company, is the definitive predictor of business growth, according to the report.
• Fully engaged customers are emotionally attached and loyal to a brand.
• Fully engaged consumers have been found to be more profitable than average customers in both good and bad economic times.

Achieving customer ‘engagement’ is a success that fuels business growth, and increases profits, client loyalty and retention, with research showing that companies with high levels of engagement perform better financially than those with low levels.

“Companies focusing on customer engagement realise a 13 per cent revenue reward, compared to a 36 per cent revenue penalty for those obstructing customer engagement,” says a report titled Enhancing the Customer Experience and Engagement in Retail by PeopleMetrics, a market research and analysis firm.

Customer engagement, summarised as the emotional and psychological attachment to a brand, product, or company, is the definitive predictor of business growth, according to the report.

In measuring degrees of engagement, Gallup Research classifies customers into three groups; fully engaged, indifferent and actively disengaged customers.

Fully engaged customers are emotionally attached and loyal to a brand. They are devoted to one product or service, accepting no substitutes.

Indifferent customers are those considered to be emotionally and rationally neutral. They have a take-it-or-leave-it attitude towards a company’s product or service.

Then there are those referred to as actively disengaged, are emotionally detached from a company and its products or services, and are often actively and even vocally critical of the brand.

Fully engaged consumers have been found to be more profitable than average customers in both good and bad economic times because of their loyalty to the brand, which results in increased spending and repeat purchases.

Additionally, they are regarded as brand ambassadors, often actively campaigning for the brand online and offline.

“Customers who are fully engaged represent a 23 per cent premium in terms of share of wallet, profitability, revenue, and relationship growth over the average customer. In short, when customers believe they are getting more out of a business, they give more to it,” notes Gallup.

“Customers who love a brand shop more often, buy more, tell others about it, and - most importantly - are less price sensitive. Customers who hate a brand spread negative emotions to stop others from doing business with you.”

Gallup findings show, for example, that in retail banking, fully engaged customers bring 37 per cent more annual revenue to their primary bank than actively disengaged customers.

However, the actively disengaged consumers also need attention as they can be costly to a brand. In the US, for example, businesses are losing an estimated Sh4.2 trillion ($41bn) a year as a result of disengaged consumers who are disloyal and have turned the country into a nation of ‘serial switchers’, according to research from NewVoiceMedia, a leading global provider of cloud technology.

As market competition increases, the evidence is clear that Kenyan brands need to adopt efficient and effective ways to listen and involve their customers in their operations, products, innovation and business strategy if they want to outperform, and weather both good times and bad.