When you recommend a product or service, can you remember why? Was it because the product is the best? You had good customer service? The reasons for recommending can be hard to pinpoint and they usually come when a customer believes in what a company is doing or selling.

If a product makes life easier or better, a customer is more likely to use it. If a customer feels an organisation cares, they are more likely to recommend. It is this emotional involvement that is the Holy Grail. It leads to a level of advocacy that it is very difficult to put a price on.

However, in today’s world, where technological advancements, growth in data and the sheer amount of choice mean that consumers are more empowered than ever before, developing long-lasting relationships and retaining customers is increasingly challenging.

In spite of this, the importance of engaging existing customers is a concept that is often underplayed as companies place greater importance on bringing in new customers than building more fruitful relationships with existing ones. This is surprising when you consider that it actually costs less to retain a customer than it does to attract a new one. Research by Gartner Group reveals that 80% of a company’s future revenue will come from just 20 percent of a business’ existing customer base.

For marketers, it is often easier to fall back on above-the-line advertising to draw in new customers than it is to try and convince senior managers the value building better relationships with existing customers can bring. With that in mind, we have worked with Oxford Brookes marketing and consumer psychology professor Janine Dermody to explore the psychological journey consumers take when building relationships with companies.

The research

The aim of this global study was to develop a model that maps the path to customer engagement and measures the extent to which a company has become a meaningful part of a consumer’s life. The resulting Customer Engagement Model helps companies understand the rational and emotional attitudes of their customers which can then inform the development of product propositions, marketing programmes and user experiences to increase their connection with the customer.

The logic of emotion

While the banking, retail and telecommunications industries we examined are all different, the research clearly indicates that the drivers for selecting a provider in the first place are grounded in rational decisions. More than 80 percent of respondents agreed rational factors – such as which bank offers the best interest rates on savings – are their primary influencers.

However, our study shows the journey from first interaction with a business to consumer loyalty is underpinned and driven by both emotion and participation. And companies can move people to being ‘engaged’ quickly if they deliver on basics like customer experience, trust, satisfaction and peace of mind. What’s different about our research is that it shows that the impact of the head and heart is a 50:50 split when it comes to the customer engagement journey.

Marketers who understand the role of emotion in the customer engagement journey and deliver personalised products or services that are relevant to the consumer are the ones that will develop deeper, more profitable relationships with their customers.

Advocacy breeds advocacy

What’s also clear is there is a distinct path to advocacy and a progressive relationship between the decision to stay with a company, to purchase goods and finally to recommend to others. The highest engagement scores were seen among customers who said that they would always recommend a company.

Whether there is a contractual relationship, as is the case with the banking and telecommunications sectors, or an ‘open’ one, as for retailers, each industry is different when it comes to the entry point to advocacy. For banks and telecommunications companies it is based on satisfaction and trust, with emotional drivers tipping customers to recommend. However, in retail, a mixture of both rational and emotional factors is required to tip them towards recommendation.

As a marketer, creating an army of advocates for your company should be your ultimate goal. This has even greater importance when you consider that half of the respondents in our research who came out as advocates had originally chosen to do business with company because their family or friends used it.

The world is changing and it is no longer enough for marketers to rely on transactional, rational points or cashback programmes. These clearly have a role to play, but loyalty and engagement are driven by emotional factors too. The likes of Amazon have changed the way that consumers like to be treated, how they expect to be known by a company and what they expect a company to know about them.

As a marketer, answering the needs of the head and the heart and committing resource and budgets to leveraging relationships with existing customers is crucial. This is the only way that a company will be able to extend its reach into a consumer’s life – and it is this which will drive advocacy, loyalty and business growth.

 

 

By Lisa Axel, senior vice president and chief marketing officer at Affinion


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