Customers are not happy. And unless you are an ultra-high end brand, they're checking out of their attachment with you...and telling each about it via social media channels.
Those are some of the results of the PeopleMetrics second annual Customer Engagement Report. It shows that when it comes to value and emotional connection, one man's search result is another man's luxury suite. According to the survey, consumers connect emotionally to brands that provide value, and that emotional connection has dropped 15% over 2007.
PeopleMetrics methodology focuses on 20,000 consumers who rate their connection to companies based on retention, effort, advocacy, and passion. Internet marketing and social media interface components are a huge part of these datapoints and emotions. These results show almost a complete dichotomy between luxury engagement strategy and other brands. By category, luxury brands have the highest engagement percentage (65), followed by search engines (61) and ecommerce retailers (54). Of the top ten most engaged customers, five were engaged with ultra high-end brands. Ritz-Carlton hotels lead the survey, followed by The Four Seasons at number 3; Cartier (5); Armani (6) and Coach (9). The top ten is rounded out by Google, Netflix, Newegg, Wegman's, and Costco. The middle ground never showed up.
The top ten split was accentuated further by the two biggest gainers, both value brands: Radio Shack and WalMart. Regardless of whether the value being communicated is "a lot of value for a lot of money" or a lot of value for less, engagement is directly tied to and magnified by social media. Consider the following findings:
- A fully engaged customer recommends a brand nearly 4 times more often than does an ambivalent customer who is sitting on-the-fence (on average 11 recommendations versus just 3). By contrast, an actively disengaged customer will tell, on average, 3 people to avoid a company and its services.
- 13% of fully engaged customers post to a blog or website about their positive experiences. The actively disengaged customer is 4 times more likely than a neutral customer to post to a blog or website about their poor customer experience.
- A fully engaged customer visits that company’s website twice as often as an actively disengaged customer and makes three times as many online purchases.
It's also evident that internet tools should be used to solve problems. The top ranked companies have fewer service failures, but the true differentiator is the ability to successfully resolve problems. Customers who feel their problem was handled well are nearly as engaged as customers who never had a problem in the first place (49% versus 52%).
The research follows the third annual Econsultancy / cScape Customer Engagement Report which found that whilst the importance of customer engagement is widely acknowledged, fewer than half of organizations (45%) have a defined customer engagement strategy in place.