Engagement Value Explained: How Well Do You Know Your Customers?
The buying cycle can be incredibly short or long, and every marketplace is becoming more competitive with new entrants or being disrupted by the likes of Uber (transportation, and most recently logistics) or Airbnb (accommodations). Consumers enjoy a privileged position of strength today. They are in the driver’s seat and can take their purchases elsewhere and can source what they need from anywhere in a flash.
Getting it right the first time
“56% of consumers say they would be more inclined to use a retailer if it offered a good personalized experience.”[i] So, it isn’t the product or price that is driving the purchase in the majority of cases but rather the consumer feeling special. Numerous studies focused on Customer Lifetime Value (CLV) have demonstrated that it is far more profitable to preserve customers than to expend the effort to gain new ones. So it is crucial for companies to understand their customers and ideally create a personalized, relevant experience, each and every time the brand is engaged regardless of channel (email, website, social, TV, radio, event, print, brick and mortar).
"Analysts say a wider shift is afoot in the mind of the American consumer, spurred by the popularity of a growing body of scientific studies that appear to show that experiences, not objects, bring the most happiness.” [ii]
The customer knows best
A 2013 Sitecore survey showed that a striking 85% of companies identified themselves in the first two phases of the Maturity Model (see graphic below). If companies know that it’s in their best interests to demonstrate how well they know their customers, why don’t they? Typically, companies work in silos with different departments and brand managers responsible for the different channels and held to a different deliverable. And each department uses their own systems and associated metrics to measure success. The result is a disjointed experience by the end consumer and the impact being felt in the vendor’s bottom line. A few companies do stand-out and are well-known for their strict focus on the customer – Starbucks, Zappos, and Amazon and have risen to the pinnacle of their respective markets.
Making sense of it all
Some companies use Lead Scoring to measure the likelihood of a prospect purchasing their product. Not only does Sitecore support Lead Scoring but it also provides a far more powerful metric – Engagement Value – that measures the value of the customer experience and the impact it has on strategic outcomes. Sitecore’s Engagement Value lets marketers take a more granular approach in analyzing customer intentions. So, while Lead Scoring is used to qualify readiness to buy, Engagement Value is used to optimize outcomes of your digital channels. A high Engagement Value per visitor for a marketing channel or effort means your marketing is effective and serving your visitor’s needs.
The following factors are what distinguish Engagement Value from Lead Scoring and render it a more powerful tool in the marketer’s arsenal:
- Ability to buy
- Authority to buy
- Need to buy
- Stage in the buying cycle
- Recency of contacts
- Frequency of contacts
- Monetary or Average Order Value (AOV)
- Previous commitments or purchases
The figure below shows an example Engagement Value Scale for a B2B business with a long sales cycle and a marketing objective of capturing marketing qualified leads. Each level should – from bottom to top – move a visitor toward achieving your marketing objective. The value of each level should be proportional to how much that level contributes to the visitor reaching the marketing objective.
The Sitecore® Experience Platform™ empowers companies to take marketing to the next level and use their customer intelligence (residing in the Sitecore® Experience Database™ or pulled from any system, PoS, ERP, customer support, etc.) to build simple or complex customer personas that can be used to execute multichannel campaigns.
In the Experience Platform’s Ad Network Behavior section of a Profile Card, we see that Marie follows at least one pattern. In the Visit Profile section, you can see that this pattern or collection of website visit behaviors are named “Cathy the Connoisseur.” Once these patterns have been created, a marketer can engage in predictive personalization…delivering relevant information to a customer based on their past behaviors and interests. The Profile Card is a treasure trove of customer data, detailing how they have interacted with any channel of this brand (an ad campaign, an event, a rebate program) and their accumulated Engagement Value points.
With insights like these, Sitecore is able to shape every experience and position this company in the “Lifetime” or final phase of the Maturity Model referenced earlier. This is where a brand gains the power of using customer intelligence and predictions to optimize cross channel experiences. By anticipating the needs of the customer and establishing a true 1:1 dialogue, you’re on your way to gaining customers for life.