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How Do You Measure Engagement?
Customers are not equal. If you have ever read a Peppers and Rogers book or heard them speak, you know this is true. It's the basis of what we write about every day at 1to1 Media. So knowing that, how do you figure out their value? A new buzzword around the marketplace is "engagement." It's a great attribute of a customer's value to the company, but it's so vague. Companies talk in very broad strokes about the importance of engagement, but there hasn't been much in the way of measurement for it. Forrester Research aims to change that.
In today's 1to1 Weekly lead article, we look at Forrester's new study that separates engagement into four components: involvement, interaction, intimacy, and influence. Measure these attributes, and you can get a good picture of a customer's level of engagement. It's a good start, but it's not the only way to study engagement. How does your company measure a customer's level of engagement?
Engagement to me means rather something tangible than not. If it were otherwise, you wouldn't be able to quantify its level and assign the status of a marketing metric. Satisfaction surveys are hardly reliable since they don't bear enough of statistical significance being way fragmented and frequently subjective. After all, they are often done on small non-representative samples. Turning back to tangible CE as a valid measurement object, the first cut may the old friend of a cataloguer - RFM (recency, frequency, money) model showing up a rough customer engagement layer toward your organization. Then, you can add the variations of customer value over time getting to the kind of Customer Value Matrix (CVM). Mixing it with customer tenure, reference history and other critical variables, you may end up with some aggregate metric you may call either loyalty or engagement index. We tend to pay attention more to the cash flow element and client tenure without attempting to mix them further.
I think that Forrester's thinking is really starting to get to the heart of how to measure engagement because it looks at a wider range of factors. It's not just behavioral data, it tries to get to the motivation behind the behavior and that's the real key. As I mentioned to the writer of the article, that's the part we're really struggling with at 1to1 Media. We've been successful in making distinctions among the various activities - such as posting to a blog vs. just reading a newsletter - but are constantly refining ways to get at the motivations of behavior. Having said that, I think the key is to measure. While the approach might not be perfect at first, don't be afraid to jump in the pool. Once you start, you have baseline data that you can start to refine and really make some decisions on how to move forward.