“Think about how many times you are marketed to throughout the day, from the radio on the way to work to the Starbucks cup to signs on buses, billboards and LinkedIn ads.” – Daniel Yaffe, Co-founder, AnyRoad
The Engagement Economy refers to a new era in which competitive advantage will lie more in a brand’s ability to engage and retain customers than generate and retarget leads.
The Engagement Economy
Why scaling personalization is more survival than competitive advantage
By Charlie Lunan
Titan Travel had established itself as one of England’s top-rated tour companies when its senior leadership noticed something disturbing a few years ago. Competitors were advertising lower priced tours featuring many of the same itineraries the company had spent decades honing with the input of customers.
Suddenly, the company that had separated from the pack through its unsurpassed knowledge of British travelers was seeing its product commoditized. Rather than change its business model, Titan Travel decided it would find a way to better understand the “trip intent” of every one of its customers, so it could take personalization to the next level.
For this, Titan turned to the Anglo-American company Thunderhead, which specializes in helping marketers improve engagement across all customer touch points.
Within just a few days of implementing Thunderhead’s cloud-based ONE Engagement Hub, Titan Travel booked more than $12,000 in incremental sales by calling customers to discuss specific holiday packages it had researched on the company’s website. The sales proved that by having a personalized and relevant conversation, it could generate an extra $2 million in revenue per year.
“Titan has used ONE to make big leaps forward in our ability to recognize previously anonymous web visitors and join up their journeys across channels,” Titan Travel’s Dan Whitehouse told Thunderhead in late 2016. “We’ve seen real business benefits and have been able to have more meaningful conversations with both existing and potential customers.”
This is the type of marketing automation that modern vendors are using to win business while seeking an edge in what has been dubbed, “the Engagement Economy.” The term refers to a new era in which competitive advantage will lie more in a brand’s ability to engage and retain customers than generate and re-target leads.
The flaws of the latter approach are quite apparent to consumers who can readily cite examples of marketing automation gone bad. There is the robocall that greets you with silence, expecting you to hold until a live person can get on the line. There is that unending stream of emails and letters offering a last chance to renew the extended warranty on a car you sold six months ago. Then there’s the ad for a laptop computer that keeps popping up in your web browser, even though you bought a different model from the same vendor last week.
Thunderhead is among a host of vendors using Artificial Intelligence, or AI. The tactic is an attempt to bring order to the Rube Goldberg world of marketing automation and potentially enable marketers to shift their focus from relying on re-targeting and other tactics to meet quarterly sales goals, to using engagement to reduce customer churn and drive brand loyalty.
In an era when consumers control when and how they engage with brands, and can switch between brands with ease, knowing how to use AI to scale personalization may be more a matter of survival than a competitive advantage, regardless of industry.
Finding meaning in unstructured data
Some hospitals and clinics are turning to Binary Foundation, a company in McLean, Virgina, that uses natural language processing, or NLP, to extract “actionable insights and trends” from comments patients write in post-care surveys and third-party review sites.
The data fuels a kind of virtuous cycle by helping hospitals understand what matters to patients so they can tweak operations and boost their patient satisfaction scores, which they can then advertise to attract more patients. Hospitals and clinics have moved up plans to offer valet parking and changed staffing at their front desk as a result of insights gathered by Binary Foundation, says senior VP of marketing Aaron Clifford.
Research has repeatedly shown that improvements in patient care lead to lower churn rates and better profit margins; something not often seen in other industries. The correlation is likely to accelerate as employers and the government push more healthcare costs on to consumers.
“The rise of smartphones and instantaneous feedback has created a tremendous volume of comments and transparency not only in the service industry, but with healthcare providers,” Clifford says. “People are using that to get the most money with higher deductibles.”
Daniel Yaffe co-founded AnyRoad to help marketers capture and analyze content consumers generate during live events. Marketers have sponsored festivals, concerts, sporting events, trade shows and museum exhibits for centuries on the hunch that they build brand loyalty. The San Francisco-based company is helping marketers calculate return on those investments – often for the first time.
One brewery used AnyRoad to measure what might happen if it began charging for its tours. After finding it had a positive impact, the brewer opted to invest more to promote the tours.
By founding AnyRoad, Yaffe essentially was placing a bet that experiential marketing, and more specifically live event marketing, will thrive in the Engagement Economy.
“Think about how many times you are marketed to throughout the day, from the radio on the way to work to the Starbucks cup to signs on buses, billboards and LinkedIn ads,” Yaffe says. “Research suggests people see between 200 and 800 ads per day. We are overloaded with messaging and branding, so engagement is going to drive much more opportunity than more passive forms of marketing.”
Obstacles in the C-suite
The Engagement Economy remains a hard sell in some C-suites, its apostles concede. Improving engagement consists of both hard costs – such as new applications and systems integration – and soft costs – such as upgrading internal technical capacity.
CMOs will have to demonstrate to senior leadership how they can implement an engagement strategy and still hit sales targets. That will be particularly challenging for CMOs who don’t control customer service or other key aspects of the customer experience.
The surge in AI-enabled marketing automation platforms and job listings for customer experience (CX) and user experience (UX) positions indicates CMOs are having success in the board room. If they succeed in the Engagement Economy, they stand to gain not just market share, but a bigger voice in shaping corporate strategy.
Tips for improving your customer engagement
- Empathy – Before making decisions, ask how they will affect the customer’s experience. Map out all the possible touch points a customer may encounter on their path to purchase and prioritize them according to how you think they affect overall customer experience.
- Respond – The Engagement Economy is a two-way street, so don’t push out content on social media if you can’t assign someone to monitor, analyze and respond to customer engagements.
- Metrics – Make sure you are measuring engagement in high priority areas and tracking it against brand loyalty metrics, such as average sales per customer, average transactions per customer or average lifetime value of customers. If no correlations emerge, you may be focusing on the wrong segments of the customer’s journey.
- Unstructured data: Consider whether you can tap unstructured data from social media channels, web forms and call centers to fill gaps in your engagement data.
- ROI – When calculating ROI, don’t overlook savings. Determine whether engagement initiatives have enabled the company to reduce spending on lead generation, customer retention, market research, content development or customer service.