What does customer engagement really mean for modern businesses? A new global study from Salesforce Research reveals some surprising answers.
“Alexa, where’s my stuff?” That’s how easy it is to check the order status of an Amazon purchase — and it’s setting the standard for customer engagement with every company. In fact, a staggering 73% of customers say that an extraordinary experience with one company raises their expectations of others.
So, what does customer engagement really mean for businesses today? To answer that question, we surveyed more than 8,000 consumers and business buyers across the globe for the third edition of the "State of the Connected Customer" report.
Key customer engagement trends that emerged from the research include:
- Customers’ happiness depends as much on the quality of a company’s engagement as the quality of the product or service they’re buying
- Customers are increasingly open to companies using new technologies to improve their experiences
- Personalization, timeliness, and connectivity are the three foundations of exceptional customer engagement
- Ethics and trust are key to winning customers’ business and loyalty
To see and share an infographic summarizing key findings from “State of the Connected Customer,” scroll to the bottom of this article.
What is customer engagement and how is it changing?
Customer engagement — which we define as how brands connect with customers across all touchpoints and build relationships over time — is in the middle of a revolution. In fact, 54% of customers think companies need to fundamentally transform how they engage.
New tech allows cutting-edge companies to engage with their customers in completely new (and better) ways.
54% of customers think companies need to fundamentally transform how they engage.” State of the Connected Customer Report, Third Edition | Get the Report
So, what do we know about the sort of things customers now expect?
- Customers expect companies to understand what they want BEFORE they ask. That might mean serving up a personalized offer, or proactively reaching out to prevent a potential issue that might arise for customers.
- Customers expect to pick the time and place. The best companies engage with their customers on the channel or device that the customer prefers, not the one that’s most convenient for the company — whether that’s online, over the phone, via a smartphone app, or a voice assistant.
- Customers don’t care about your organizational model. Basically, if a customer talks to someone in marketing one day, they expect customer service to know about it — and use that information to help them — the next day. That means it’s absolutely crucial for companies to build a single, comprehensive view of their customers, shared across all departments.
Of course, as people get familiar with those exceptional new digital customer experiences, they start to expect the same standard from everyone they do business with.
And it’s crucial that companies meet that standard. “Customers have so much power now,” said Neeracha Taychakhoonavudh, EVP of Industries at Salesforce. “In the consumer world of social platforms, every single person has a voice. The rewards of harnessing your most ardent fans are amazing, but customers will also be very vocal when they are displeased. So knowing your customers and understanding their needs has become critical to success, no matter what industry you’re in.”
Every time Amazon raises the bar in retail, for example, it also does so for banking, healthcare, hospitality, and every other industry.
"We have a divide,” said Dr. Susan Weinschenk, Chief Behavioral Scientist and Chief Executive Officer at consulting firm The Team W. “There are some companies and some products we use that provide such a perfect, seamless experience that they have raised the bar. In fact, they’re so easy and seamless that we kind of forget to be impressed. But that is making the ones that don’t have that kind of great experience all the more obvious."
Our research found that 84% of customers say the experiences provided by a company are as important to them as its products and services. That’s up from 80% in last year’s survey. In other words, the quality of customer experience you can deliver is becoming a powerful leading indicator of your future success.
“Most companies must realize that they are no longer competing against the guy down the street or the brand that sells similar products,” said , author and customer experience expert. “Instead, they’re competing with every other experience a customer has. This presents an opportunity for forward-thinking brands to create positive experiences that customers want to talk about to others. It also suggests that CX [customer experience] professionals should be monitoring the experience at a wide variety of companies and industries for inspiration.”
How is emerging technology changing customer engagement?
The Fourth Industrial Revolution has brought a surge of powerful technologies into our lives — like artificial intelligence, and the Internet of Things (IoT).
There appears to be a clear link between these technologies and changing customer expectations. An enormous 75% of customers say that they expect companies to use those new technologies to create better experiences for them.
75% of customers expect companies to use new technologies to create better experiences.” State of the Connected Customer Report, Third Edition | Salesforce Research
It seems clear that the adoption of connected devices and smart technologies, both at home and at work, is changing customers’ expectations about how they want to engage with brands. And given the adoption of smart speakers — to name but one new technology — is growing at 40% a year, and that over a quarter of US adults now own one of these speakers, the scale of the issue for business is clear.
A majority of customers seem pretty excited about how tech can create better experiences. Fifty-nine percent of customers agree AI will revolutionize how they interact with businesses.
62% of customers are open to the use of AI to improve their experiences — up from 59% in 2018.” State of the Connected Customer, Third Edition | Salesforce Research
The rising popularity of voice assistants such as Siri, Alexa, and Google Assistant is a prime example of how AI is becoming a part of everyday life. The in the workplace, in particular, is growing: 63% expect them to play as big a role in their lives as smartphones, for example.
Connected devices, meanwhile — from smart thermostats to fitness trackers — are nearly everywhere. More than three-quarters of customers (76%) surveyed own at least one such item.
“Convenience and ease are the pillars for a great engagement and AI can supercharge them all,” said David Clarke, Global Chief Experience Officer, PwC. “If all of a customer’s information just pops up and a smart, adapted script is there for an associate, how much better do you think that employee will serve that customer by spending less time hunting for data and more time building relationships? That’s all possible in large part because of adoption of these technologies and connected devices.”
How can you drive effective customer engagement?
Given all these developments, how can companies improve their customer engagement? The research shows that success lies in delivering experiences that are personalized, real-time, and connected. All three are vital to any effective customer engagement strategy.
Make it personalized
Most customers (73%) now expect companies to understand their needs and expectations. Personalization — already recognized by marketers as having a big impact across the customer journey — is a given. Customers want a tailored experience as they progress from first hearing that a company exists all the way through to deciding to buy from them. For example, from seeing your ad on the side of a bus all the way through to clicking ‘buy’ on your eCommerce site. They also want these tailored experiences coupled with concierge-like engagement from customer service.
And the bar is rising fast in terms of what constitutes a ‘personalized’ experience. A jaw-dropping 62% of customers now expect companies to adapt based on their actions and behaviors — almost in the manner of a great coworker who brings your favorite coffee when they know you’ve been having a tough week. A company, for example, may move you over to an onboarding campaign once you’ve become a B2B customer, or simply be informed enough to stop showing you ads for an item you’ve already purchased.
These kinds of expectations hold true across all generations, but are especially relevant for millennials, Gen Zers, and Gen Xers. Yet only 47% of customers say companies are living up to these expectations, signaling ample room to improve.
Make it connected
Nearly 80% of customers expect consistency when interacting across multiple departments. In short, effective engagement also needs to be connected — meaning, for example, that anyone at a company can quickly look up customer information and easily use it to engage them accordingly, without peppering them with questions.
However, companies aren’t living up to these elevated expectations here either, with almost 60% of customers generally perceiving siloed departments rather than a unified business.
Of course, ensuring this level of connectivity can be a tall order. Sixty-four percent of customers have used multiple devices to start and complete single transactions. Not only that, but the average enterprise uses 900 different applications, only 29% of which are connected.
Make it real time
Seventy-one percent of customers now expect companies to communicate with them in real time. The need for instant gratification is affecting the way customers make purchases — nearly six in 10 are now willing to switch to a competitor with quicker and cheaper shipping, for example. The same “taking matters into their own hands” mindset also extends to customer service: 68% would rather help themselves through self-service for simple issues. In short, people are growing impatient with the notion of “waiting,” and companies are being challenged to foster a real-time, two-way dialogue with customers.
How does trust impact customer engagement?
Trust is another important factor in understanding the modern customer mindset. Trust reinforces customer engagement — people won’t care about your organization if they think your interactions with them aren’t based on open, transparent, and fair practices. Today, 73% of customers say trust in companies matters more than it did a year ago.
The topic has become even more relevant for companies today because engagement strategies depend on customer data. In other words, to provide the connected experiences that customers expect, companies need to know a lot about their customers’ individual needs, expectations, and habits. We found that only a small minority of customers are uncomfortable with relevant personal information being used to enhance their experiences. However, the majority (63%) don’t believe companies are transparent about how their data is being used, signaling that many companies aren’t holding up their end of the bargain.
Trust can make or break customer engagement and impact a business’s bottom line. Nearly half (48%) of customers have stopped buying from companies because of privacy concerns.
How do values engage customers?
Seventy-seven percent of respondents say increased awareness of corporate values, ethics, and business practices is changing their expectations as customers. Increasingly, values drive customer engagement. Customers take into account what a company stands for when deciding whether to buy from that business or not. More than half (55%) of customers say they won’t buy from companies that don’t value equality, for example.
Customers today expect companies to consider a broader set of stakeholders, going beyond financial shareholders to include their impact on society as a whole. This reflects a general sentiment that business has an important role to play locally (giving back to their communities) and globally (ensuring a better future).
The research shows that 76% of customers think companies are responsible for giving back to the communities where they do business. In terms of global issues, 78% of customers think companies are responsible for taking steps to reduce climate change.
How can you measure customer engagement?
Of course, determining your customers’ level of engagement isn’t always easy. Is a customer who visited your website 10 times last week more engaged than one who spent 15 minutes talking to a salesperson in store? Is a new customer who made five recent purchases more engaged than a long-time customer who only buys once a year? Do your answers to these questions change if one customer completes an online survey — or recommends your brand to others?
When it comes to measuring customer engagement and the best practices of successful companies, here are some of the high-level findings that additional Salesforce studies have brought to light.
While the “right message, right channel, right time” mantra still applies, it’s a complicated reality to achieve. The average customer crisscrosses many different channels on different devices in different contexts. As a result, engaging in real time is now marketers’ top priority — and their top challenge. Many now track mobile and social analytics, in addition to general web traffic and digital engagement rates, to better pinpoint how to optimize across media. Forty-three percent of marketers now also track lifetime customer value — the ultimate measure of whether or not they’re effectively engaging customers and providing the experiences they expect.
“Measuring customer lifetime value is a great start, because it will likely convince companies to invest more in existing customers,” said Gingiss. “That’s as opposed to continuing the infinite loop that is spending on acquisition without regard to the ‘leaky bucket’ on the other end.”
Hitting quota will be critical for salespeople moving forward, but how they do it is changing. Instead of focusing on single transactions and net-new customers, the majority of today’s sales teams recognize that there’s a lot of value in growing existing customer relationships. That’s why 58% of sales teams now track customer retention, and an additional 27% plan to do so within two years.
For customer service:
The holy grail of customer satisfaction remains the ultimate goal, and the most-tracked customer service KPI. But more data, coupled with improved capabilities for analyzing it, has brought forth more granular measures of engagement. For example, 51% of service teams now track first contact resolution (FCR) rates, and 44% track customer effort scores. Thirty-six percent even track case deflection — a measure of how many customer issues they’re able to prevent in the first place.
Cross-functional team alignment can also be critical to customer engagement measurement success. “Some great ways I’ve seen to improve alignment include having customer-focused goals in each team and across the business,” said Jason Noble, Vice President, Global Customer Success at Vinli. “Also, democratize customer feedback by using, say, a customer feedback wall that shows the good, the bad and the ugly; and set up cross-functional working groups with a rotating product owner or lead for each. Finally, always be a customer: use your product or service like they would and see what the experience is like.”
Infographic: Keeping today’s connected customer engaged
Today’s customers are more powerful than ever. With tailored, contextualized engagement now becoming standard for all industries, customers are more in control of their own experience. [Click to Tweet.]
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This trend continues to push companies to rethink how they engage and connect with their customers. By encouraging personalized, real-time, and consistent communication throughout the customer experience, businesses can find new ways to engage their customers. At the same time, companies that respect their customers’ data, and use it well to improve their experience, stand a better chance of increasing customer trust and ultimately building loyalty.
To find out more about this new kind of customer engagement, download the full “State of the Connected Customer report now.