Customer Engagement - Customer Engagement As A Metric

Customer Engagement As A Metric

All marketing practices, including internet marketing, include measuring the effectiveness of various media along the customer engagement cycle, as consumers travel from awareness to purchase. Often the use of CVP Analysis factors into strategy decisions, including budgets and media placement.

The CE metric is useful for:

a) Planning:

• Identify where CE-marketing efforts should take place; which of the communities that the target customers participate in are the most engaging?

• Specify the way in which target customers engage, or want to engage, with the company or offering.

b) Measuring Effectiveness: Measure how successful CE-marketing efforts have been at engaging target customers.

The importance of CE as a marketing metric is reflected in ARF's statement:

"The industry is moving toward customer engagement with marketing communications as the 21st century metric of marketing efficiency and effectiveness."

ARF envisages CE exclusively as a metric of engagement with communication, but it is not necessary to distinguish between engaging with the communication and with the product since CE behaviour deals with, and is influenced by, involvement with both.

Eric Peterson's definition also frames CE as a metric:

"Engagement is an estimate of the degree and depth of visitor interaction on the site against a clearly defined set of goals."

In order to be operational, CE-metrics must be combined with psychodemographics. It is not enough to know that a website has 500 highly engaged members, for instance; it is imperative to know what percentage are members of the company's target market. As a metric for effectiveness, Scott Karp suggests, CE is the solution to the same intractable problems that have long been a struggle for old media: how to prove value.

The CE-metric is synthetic and integrates a number of variables. The World Federation of Advertisers calls it 'consumer-centric holistic measurement'. The following items have all been proposed as components of a CE-metric:

Root metrics

• Duration of visit

• Frequency of visit (returning to the site directly – through a URL or bookmark - or indirectly).

• % repeat visits

• Recency of visit

• Depth of visit (% of site visited)

• Click-through rate

• Sales

• Lifetime value

Action metrics

• RSS feed subscriptions

• Bookmarks, tags, ratings

• Viewing of high-value or medium-value content (as valued from the organisation’s point-of-view). 'Depth' of visit can be combined with this variable.

• Inquiries

• Providing personal information

• Downloads

• Content resyndication

• Customer reviews

• Comments: their quality is another indicator of the degree of engagement.

• Ratio between posts and comments plus trackbacks.

In selecting the components of a CE-metric, the following issues must be resolved:

• Flexible metric vs. Industry standard: According to some, CE "measurement has never been one size fits-all" but should vary according to industry, organisation, business goal etc. On the other hand, corporate clients and even agencies also desire some type of solid index. Internal metrics could, perhaps, be developed in addition to a comparative, industry-wide one. Other exponents of a flexible CE-metric include Bill Gassman in his comments to ‘How do you calculate engagement? Part I’. Eric Peterson shares Gassman's views.

• Relative weighting: The relative weighting associated with each CE-component in an algorithm. For instance, is subscribing to RSS more important than contributing a comment? If yes how much more important exactly? Relative weighting links up with the issue of flexible vs. standardised metrics: Is the relative weighting going to be solid – as will be required if the CE-metric is to be standardised – or is it going to differ depending on the industry, organisation, business goals etc.?

• Component measurability: Most of the components of a CE-metric face problems of measurement. Duration of visit for example suffers from (a) failing to capture the most engaged users who like to peruse RSS feeds; (b) inaccuracy arising from leaving a tab open during breaks, stopping to converse with co-workers, etc.

• Length of measurement: For how long must the various CE components be measured if CE is to reflect loyalty rather than short-term, faddish engagement?