As customers take a more active role in brand conversations, engagement is fast becoming a critical strategy and metric for marketers, but many CMOs and other senior marketing executives are struggling to formulate successful engagement strategies that have measurable impact, according to a survey from Forbes Insights.
Marketers clearly value engagement: 67% of surveyed senior marketers say customer engagement is very important in their company, and 86% say it is part of an ongoing conversation with the CEO, board of directors, and other corporate leadership. In addition, 69% of CMOs say their companies now have a defined strategy for customer engagement.
But just 10% say their companies are "excellent" at engaging customers, 59% rate their efforts as "good," and 30% say their efforts are "fair."
Below, other findings from the New Rules of Engagement: CMOs Rethink Their Marketing Mix, based on a survey of 314 CMOs and other senior marketing executives.
Defining Customer Engagement
Asked to define successful engagement, CMOs cite varying approaches:
- Repeat-purchase behavior: 72%
- Customers' becoming brand advocates: 69%
- Customers' willingness to pay a premium: 48%
- Customer resistance to competitive products and services: 28%
- Customer support for the brand reduces marketing and sales costs: 28%
Marketers' objectives toward customer engagement also vary:
- Among B2B marketers, adding incremental revenue by selling product extensions and additional services (68%) is the primary objective of customer engagement.
- B2C marketers—generally more sensitive to brand messaging—view engagement as a way to cut through marketing clutter to increase sales (48%).
Moreover, penetrating emerging markets is a solid objective in the B2B space (48%), but is less so among B2C marketers (31%).
Asked how the CMO/marketing function can best encourage customer engagement, CMOs cite the need to take a leadership role in ensuring authentic brand experiences (35%) and campaigns that generate tangible customer interactions (24%).
Another 12% cite involving customers in the product development cycle, and 11% cite designing tools to empower brand advocates.
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As traditional "interrupt and repeat" advertising models fade, customer conversations and advocacy engagement is taking center stage.
Among tactics designed to engage customers, experiential events tops the list with 48% of marketers rating it as having high/highest engagement. Opt-in email (36%) and live-event sponsorship (36%) follow in importance.
Social networking (28%) is now rated nearly equal to direct email (29%) in engaging customers, while other emerging tactics, such as mobile applications (21%) and Twitter (19%) trail.
Marketing execs say the top barriers to successful engagement are external factors, such as the economy (44%) and competition (42%), but they also cite internal issues:
- 30% say benefits to customers are not clearly articulated.
- 30% say they lack a well-defined approach.
- 28% cite negative customer experiences.
Some 36% of CMOs say their company does not measure customer engagement.
Among the 59% who do measure engagement, customer retention is the top metric used (58%), followed by sales (44%), revenue per customer (35%), repeat purchases (33%), customer conversion (29%), marketing and sales cost (17%), campaign opt-in/downloads (15%), customer appetite for new products and services (11%), social media activity (10%), and length of sales cycle (5%).
About the data: Findings are from the Forbes Insights April 2010 survey of 314 marketing executives at businesses with annual revenues of $500+ million. Some 46% of respondents held titles of C-level executive (e.g., CEO, CMO), executive vice-president, or vice-president. The remaining 54% held the title of director of marketing.
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