Engaging customers in various ways is not a new concept in the business world, but organizations are now realizing how important this engagement can be. Like any strategy, there are some myths that have been developed around customer engagement and I am here to debunk those myths.
Myth #1: Engaging customers means asking them what they want
Engaging with customers means getting them involved, not simply asking them what they want through an online survey or a focus group. Engagement means giving customers an exclusive preview or access to a product before the general public. Imagine taking these steps with a customer:
- You ask customers for their input into the next generation of a product you are developing.
- You invite them to join a customer panel and provide feedback.
- You take action and let them know how you have handled each suggestion.
- You give them a sneak preview of the product before its' official public launch.
- You invite them to the private, exclusive event to launch the new product.
- You publicly communicate that the customer was instrumental in helping you develop some of the features of this new product.
Which customer do you think will be loyal and more likely to refer you new customers, the one who you took through the steps above or the one you simply sent an online survey?
Myth#2: Customers will tell others about you just because you make quality products
This is simply not true. Customers will only tell others about you if you provide a unique experience that is worth telling people about.
- BMW dealers give every new potential customer the royal treatment. Friendly service, no pressure to buy, aesthetically pleasing environment, and association with a great brand. Differentiate the 'BMW experience' with what other car dealers provide.
- Apple stores are bright, open, aesthetically pleasing, provide the ability to try new products, and are filled with knowledgeable people who can answer your questions. They offer tutorials, workshops, data transfers, and live service people (the Genius bar). Compare that to what Dell or Compaq or Lenovo or Samsung offer their customers as an experience.
You need to provide, and continue to provide, a memorable experience for your customers. Service is what keeps customers coming back and what prompts them to refer others. What story will your customers tell about you?
Myth #3: All customers are created equal
Again, not true. Do you really treat your best customers the same way you treat someone who has just walked in off the street?
If you do, that would explain why you are struggling to retain your best customers. All customers are not created equal. However, the best companies have learned how to treat every customer like they are their only customer. That doesn't mean you treat all customers the same way, it just means that you make every customer feel special.
You need to stratify your customers based on specific criteria. You need to know which customers spend the most with you, which are most profitable, which have the best fit with the value you offer, and which have the highest growth potential. You should also be doing this for your prospective customers.
That doesn't mean you ignore the rest, because you never know which new customers might eventually become your best customers. But it means you focus on retaining and growing those who have proven to be loyal and profitable in the past, and will grow with you in the future.
Myth #4: If you offer customers discounts, you create customer loyalty
When you cut prices, you commoditize your products and services. Groupon is a company that offers large discounts through daily deals to its expansive customer base. It works with retailers, restaurants, local businesses, and other organizations and aggregates special offerings for customers. Groupon then takes a percentage of the price paid by the customer.
This model is not sustainable and doesn't create any customer loyalty for the organizations offering the discounts. Customers will buy the discounted products or services through Groupon and then never return to the store or restaurant again. The customer purchase is motivated purely by cost savings. Organizations would be more successful if they offered something repeatable, so customers have an opportunity to experience the organization.
Myth #5: Customer engagement is the same as customer retention
Customer engagement is providing customers with unique experiences and access to allow them to have a stake in the success of the company. Apple gives certain bloggers access to products before they are launched to the public. Dell holds customer forums, bringing many of their corporate customers together to share knowledge and information. Indigo Books allows customers to make suggestions on product improvement and store layout.
However, engaging customers is not the same as retention. It can be used as a strategy to help retain customers, but just because you engage customers doesn't mean they will be loyal to you. You need to develop specific strategies to retain those customers.