Flowers and chocolate can engage your customers but has UK Inc got the romantic streak? Neil Craig looks at whether wooing customers has any effect and gives a few tips on how to be smoother.

Official figures show that marriage has been on the decline in the UK for many years so it seems that people have also gone off engagement. Business leaders are increasingly focused on customer 'engagement', almost wedded to the concept.

What customer engagement is

Customer engagement goes far beyond customer satisfaction to embrace loyalty – and more. In fact, it incorporates the full relationship life cycle and includes emotional aspects as well as analytical ones.

Recent research by the Economist Intelligence Unit has revealed that 88% of directors believe that customer attrition is the direct result of lack of customer engagement. Worryingly, 11% admit to not knowing the cause of customer churn, but this is an underestimation. Nearly one in nine may believe that they know the reasons, but in most cases this is not what customers and their staff accept. As we have discovered through the large number of assessments carried out since November 2006, senior management are not close to their customers in key areas (see below).

In order to understand how engaged your customers are, companies need to go beyond customer satisfaction surveys. They must move from the transactional view – how long it takes to answer the phone, or the frequency of complaints – to an understanding of the relationship life cycle.
In order to move the business onto a customer engagement footing, the first step is to understand where the business is at the moment.

Management believes the prize is high

Further findings from the Economist Intelligence Unit research project show:

• 76% believe that increased engagement would bring in increased revenues
• 75% anticipate increased profits if they can increase customer engagement
• 56% see increased market share as a result of enhancing customer engagement
• 45% believe that improved customer engagement will enable them to attract and retain the best employees where talent is in short supply
• 33% recognise that better customer engagement can make a major difference to growth and prosperity immediately
• 60% think that it could be the engine for growth over the next five years

And as the headline indicates, 85% of businesses see customer engagement as the key to future success. These statistics confirm that many recognise the problem and the benefits in addressing the problem but few, as yet, understand the solution.

Analysis

One could argue that customer engagement should be a preoccupation with companies, but often senior management can be a little out of kilter with what is actually going on. As a result of this even the best-willed planning is beginning from an inaccurate base.

On the upside there is general agreement that customers are treated fairly. In fact, this is one of the higher scoring elements in the IIC data model.

The starting point

Customer engagement does not happen by accident. It requires an informed, meaningful and systematic understanding of your customers. It demands the active involvement of senior management, all employees (not just customer-facing) and of the customers themselves. Above all, it requires a stake in the ground, ideally one that offers a benchmark capability so you can establish your position in your own and the wider market place in a comprehensive but cost effective way.

With the perceived rewards identified by the Economist Intelligence Unit research, it’s not really a job that can be put off for too long. Remember, there will always be rivals for the hand of your preferred customers.

Neil Craig, managing director of Investor in Customers [1] which carries out independent assessments effectively measuring how customer-oriented your business is.