well, will lead to a great customer experience. But that experience is, of course, driven by the level of interaction with the company.
So what do we mean by engagement? My definition, which I think should resonate, is that it's the ongoing interactions between company and customer, offered by the company, chosen by the customer.
The key factor is the involvement of the customer chosen by the customer. There is a misinterpretation of engagement I often see that says it has to be intense. Not true. It can be intense, it can be casual. Over time, it can be either or both. For example, I have this company that I order refrigerator filters from called Fridgefilters.com, which I've mentioned in an earlier column. When I first ordered from them about eight years ago, I set up a notification that said that every six months I'd be notified via email that I needed to reorder. So every six months, I get an email saying you have to order, with a link. The link takes me to the specific filter. There is another link to order it. I click on that. The only other thing I get from them is that the order has shipped.
I love Fridgefilters.com, even though my engagement with them is entirely casual. Know why? Because it's the engagement level I want with them, and I controlled the choices. I made the choice from the options I had. Thus, thousands of people, including the readers of this magazine, now know that Fridgefilters.com is da bomb.
That is the nature of engagement. Does it matter? Well, we know that it is a major concern of companies now. What kind of results do you get, though, if you focus on customer engagement?
Last year, Pike Research did a study on customer engagement in the utilities industry and found that the higher the level of overall customer engagement, the higher the benefit. They saw:
- increased customer participation in energy efficiency programs, without which the programs are unlikely to succeed;
- peak consumption reductions up to 30 percent greater than nonpeak reductions;
- reduced spot market settlements;
- reduced usage of excess capacity generation; and
- fewer capital projects for new generation.
In other words, quantifiable benefits for customer engagement that we don't often define.
So how does this differ from customer experience and CRM?
Very simply, customer engagement involves proactive interactions of the customer with the company. Customer experience is the feeling that a customer has about a company over time.
CRM, according to my 2013 definition, is "a business science with a defined philosophy and a set of strategies and programs, supported by systems and technologies, designed to improve human interactions in a business environment. Its purpose and its value are to make the customer's experience with the company good enough to provide a mutually beneficial outcome over time, even as expectations change."
If you were to look at the interrelationships between CRM, customer experience, and customer engagement, in a nutshell, it could be put this way: Customer engagement, via CRM systems and strategies, drives great customer experience.
It is customer engagement that drives the strategies of 21st-century companies in their dealings with customers. Customers who are engaged provide value to businesses. Businesses that engage their customers or at least give them what they need to engage the business, are valuing their customers. That sounds good, doesn't it?
It does. Take my word for it, when you engage your customers, you do the right and profitable thing.
Paul Greenberg (@greenbe on Twitter) is president of consultancy The 56 Group (the56group.typepad.com) and cofounder of training company BPT Partners. He is also the conference chair of CRM Evolution. The fourth edition of his book, CRM at the Speed of Light, is available in bookstores and online.