• Importance of customer engagement increases but many companies failing to have defined strategy in place
• Understanding evolving customer behaviour becomes paramount
• Web 2.0 and social media expected to attract significant sums of investment

Only half of companies (51%) say that the economic crisis has caused them to place greater focus on customer engagement, according to the third annual Online Customer Engagement Report published today.

The report, produced by online publisher E-consultancy and digital agency cScape, examines the likely impact of a worsening economic environment on customer behaviour and psychology.

As well as preparing for greater price sensitivity, organisations are also expecting a focus on quality, a desire for simplicity and an intolerance of poor customer service to be among the most prominent types of customer behaviour exhibited during 2009.

Richard Sedley, Customer Engagement Director at cScape, said: “Those organisations able to grasp the changes in customers’ behaviour and psychology, while placing an emphasis on delivering increased value, will be able to reap the rewards of customer engagement and will be best placed to emerge winners from the current economic situation. Those that can’t have a lot to lose.”

The research, based on a survey of 1,300 organisations, also looks at the initiatives which have helped companies deepen relationships with customers, and at the areas where they will be increasing investment in 2009.

The study also contains expert commentary from a range of digital marketing thought leaders including Andy Beal, Jim Sterne, Pete Mortensen, Ian Jindal, Martha Russell and Eric Peterson.

Email newsletters are the tactic most likely to have driven a tangible improvement in customer engagement, with 59% of respondents saying that their organisations will increase their spending in this area during the coming year.

Areas associated with Web 2.0 and social media such as user ratings & feedback (41%), user-generated content (37%), blogging (36%) and brand presence on social networks (36%) are also expected to attract significant sums of investment.

Despite the relative novelty of micro-blogging utilities such as Twitter, it is interesting to note that 7% of companies say they have improved their customer engagement through this channel.

Linus Gregoriadis, Head of Research at E-consultancy, said: “It is clear that organisations are now setting aside budget for Web 2.0-type activities because they have garnered tangible benefits rather than because they simply want to be on the cutting edge for the sake of it.

“More companies are viewing tactics such as blogging, user reviews and on-site video in the context of a broader customer engagement strategy and pulling only those levers which are most appropriate for their business model and customers.”

Whilst the importance of customer engagement is widely acknowledged, the research found that fewer than half of organisations (45%) have a defined customer engagement strategy in place.

Customer behaviour

This is the ranking of behaviour in terms of significance to organisations:

Sensitivity to price (48%*)
Focus on quality (45%)
Desire for simplicity (36%)
Intolerance of poor customer service (32%)
Prolonged decision-making (31%)
Lack of supplier / brand loyalty (30%)
Focus on short-term needs (27%)
Purchase of luxury and indulgent items (9%)
Sacrifice (family first etc) (7%)
Buying own-brand products (7%)
Buying and selling second-hand (5%)

*Respondents could check up to five behaviours or attributes which they thought their organisations would need to address in the next year.

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Journalists and bloggers can email or call Linus Gregoriadis for a complimentary copy of the report and / or further information.

Linus Gregoriadis, Head of Research, E-consultancy
(e: linus AT e-consultancy.com t: 0207 681 4051 / 07956 564713)

About cScape

cScape, the research sponsor, is an award-winning interactive agency and a certified Microsoft Gold Partner. An emphasis on customer engagement underpins cScape’s integrated consultancy, creative design and technical development services.

The cScape Customer Engagement Unit (CEU), launched in November 2006, is a team of individuals with decades of experience in digital marketing and communications, design and technology development.

The CEU has continued to grow over the last year and has now developed an international base of partners. This allows the CEU to provide wider services to global companies, many of whom have contributed to the success of the survey this year.

We have an exciting programme of events planned for 2009 and hope you will be able to come along. Please contact Sarah Woodbridge to find out more about events, the Customer Engagement Unit and cScape’s other services (s.woodbridge AT cscape.com)

About E-consultancy

E-consultancy is the leading source of independent advice and insight on digital marketing and ecommerce.

Our reports, events, online resources and training programmes help a community of over 75,000 registered marketers make better decisions, build business cases, find the best suppliers, look smart in meetings and accelerate their careers.

E-consultancy is an award-winning online publisher of reports covering best practice, user experience benchmarking, market data and supplier selection aimed at internet professionals that want practical advice on all aspects of e-business.

The E-consultancy site now attracts 175,000 unique users per month where they access research, read the blog and take part in discussions in the forums. And as a portal to the digital marketing community, E-consultancy members can also link up with other members and digital suppliers through our directories, as well as find a new job or new digital talent using the job listings.

Join E-consultancy today to learn what’s happening in digital marketing - and what works.

Call us to find out more on +44 (0)20 7681 4052 or contact us online.
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Published on: 12:00AM on 27th November 2008