The Missing Links in the Customer Engagement Cycle

The Customer Engagement Cycle plays a central role in many marketing strategies, but it’s not always defined in the same way. Probably the most commonly described stages are Awareness, Consideration, Inquiry, Purchase and Retention. In retail, we often think of the cycle as Awareness, Acquisition, Conversion, Retention. In either case, I think there are a couple of key stages that do not receive enough consideration given their critical ability to drive the cycle.

The missing links are Satisfaction and Referral.

Before discussing these missing links, let’s take a quick second to define the other stages:

Awareness: This is basic branding and positioning of the business. We certainly can’t progress people through the cycle before they’ve even heard of us.

Acquisition: I’ve always thought of this as getting someone into our doors or onto our site. It’s a major step, but it’s not yet profitable.

Conversion: This one is simply defined as making a sales. Woo hoo! It may or may not be a profitable sales on its own, but it’s still a significant stage in the cycle.

Retention: We get them to shop with us again. Excellent! Repeat sales tend to be more profitable and almost certainly have lower marketing costs than first purchases.

Now, let’s get to those Missing Links

In my experience, the key to a strong and active customer engagement cycle is a very satisfying customer experience. And while the Wikipedia article on Customer Engagement doesn’t mention Satisfaction as often as I would like, it does include this key statement: “Satisfaction is simply the foundation, and the minimum requirement, for a continuing relationship with customers.”

In fact, I think the quality of the customer experience is so important that I would actually inject it multiple times into the cycle: Awareness, Acquisition, Satisfaction, Conversion, Satisfaction, Retention, Satisfaction, Referral.

Of course, it’s possible to get through at least some of the stages of the cycle without an excellent customer experience. People will soldier through a bad experience if they want the product bad enough or if there’s an incredible price. But it’s going to be a lot harder to retain that type of customer and if you get a referral, it might not be the type of referral you want.

I wonder if Satisfaction and Referral are often left out of cycle strategies because they are the stages most out of marketers’ control.

A satisfying customer experience is not completely in the marketer’s control. For sure, marketing plays a role. A customer’s satisfaction can be defined as the degree to which her actual experience measures up to her expectations. Our marketing messages are all about expectations, so it’s important that we are compelling without over-hyping the experience. And certainly marketers can influence policy decisions, website designs, etc. to help drive better customer experiences.

In the end, though, the actual in-store or online experience will determine the strength of the customer engagement.

Everyone plays a part in the satisfaction stages. Merchants must ensure advertised product is in stock and well positioned. Store operators must ensure the stores are clean, the product is available on the sales floor and the staff are friendly, enthusiastic and helpful. The e-commerce team must ensure advertised products can be easily found, the site is performing well, product information in complete and useful,  and the products are shipped on time and in good condition.

We also have to ensure our incentives and metrics are supporting a quality customer experience, because the wrong metrics can incent the wrong behavior. For example, if we measure an online search engine marketing campaign by the number of visitors generated or even the total sales generated, we can absolutely end up going down the wrong path. We can buy tons of search terms that by their sheer volume will generate lots of traffic and some degree of increased sales. But if those search terms link to the home page or some other page that is largely irrelevant to the search term, the experience will be likely disappointing for the customer who clicked through.

In fact, I wrote a white paper a few months ago, Online Customer Acquisition: Quality Trumps Quantity, that delved into customer experience by acquisition source for the Top 100 Internet Retailers. We found that those who came via external search engines were among the least satisfied customers of those sites with the least likelihood to purchase and recommend. Not good. These low ratings could largely be attributed to the irrelevance of the landing pages from those search terms.

Satisfaction breeds Referral

Referrals or Recommendations are truly wonderful. As I wrote previously, the World’s Greatest Marketers are our best and most vocal customers. They are more credible than we’ll ever be, and the cost efficiencies of acquisition through referral are significantly better than our traditional methods of awareness and acquisition marketing. In my previously mentioned post, I discussed some ways to help customers along on the referral path. But, of course, customers can be pretty resourceful on their own.

We’ve all seen blog posts, Facebook posts or tweets about bad customer experiences. But plenty of positive public commentary can also be found.  Target’s and Gap’s Facebook walls have lots of customers expressing their love for those brands. Even more powerful are blog posts some customers write about their experiences.  I came across a post yesterday from entitled Tales of Perfection that related two excellent experiences the blogger had with Guitar Center and a burger joint called Arry’s. Both stories are highly compelling and speak to the excellent quality of the employees at each business. Nice!

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Developing a business strategy, not just a marketing strategy, around the customer engagement cycle can be extremely powerful. It requires the entire company to get on board to understand the value of maximizing the customer experience at every touch point with the customer, and it requires a set of incentives and metrics that fully support strengthening the cycle along the way.

What do you think? How do you think about the customer engagement cycle? How important do feel the customer experience is in strengthening the cycle? Or do you think this is all hogwash?

“If it ain’t broke, you ain’t looking hard enough”

The poor economy has done nothing to lower customer expectations of online retailers, and recent mixed results data from ComScore and ForeSee Results indicate that retailers who continue to improve their customer experiences are pulling away from their competitors in both sales and customer satisfaction.

ComScore reports online retail up 4% for the holiday season. While an increase is always nice, this is a much lower growth rate than online retail has seen in the past. And last year’s comparison base was far from stellar. ForeSee Results shows a significant drop in customer satisfaction year over year. Since satisfaction is predictive of future financial results, a drop is concerning.

But still, I wondered how sales could be up at all if satisfaction was so far down.

A deeper look at the ComScore data shows the Top 25 retailers growing 13% while “Small and Mid Tail” retailers are declining 10%. Satisfaction scores are also split, but the differences we’re seeing seem to be more based on those retailers who are continually improving their sites versus those whose cost containment measures have slowed or stopped improvements. It appears that the retailers who closely measure the effectiveness of their sites from their customers’ perspectives and continuously improve their customers’ experiences are the retailers with increasing customer satisfaction scores. Those retailers who didn’t improve customer experience this year are suffering declining satisfaction scores. Many of those in the Top 25 are the retailers who have continued to enhance their customer experiences. Those enhancements are not only helping them to increase their sales, but because of the high visibility and usage of those tops sites, they’re also raising consumer expectations of all sites.

Customer satisfaction can be best defined as the degree to which a customer’s actual experience meets his or her expectations. Therefore, rising expectations can depress satisfaction scores if customer experience improvements don’t keep pace.

In the rapidly changing world of online retail, stopping or delaying improvements is like treading water in a swimming race. While you may temporarily save some energy, you will fall hopelessly behind and your only hope of catching up is spending a lot more energy than you likely saved treading water

Growing online retail businesses realize and fully embrace the need for continuous improvements, and they also realize that online retail in general is far from producing the level of customer experience truly necessary to provide excellent self-service shopping experiences. I recently heard Robin Terrell, Managing Director of John Lewis Direct in the UK (and Amazon alum), say “If it ain’t broke, you ain’t looking hard enough” in a talk about the need to improve customer experience. It’s a brilliant statement, and I totally agree with what he was saying.

So, “improving customer experience” is a huge and vague statement. Where do we start?

1. Recognize that it’s broke and you ain’t looking hard enough
   We’re still in our infancy in online retail, and we’ve got a long way to go. We too often try to increase our sales by generating more traffic and don’t spend enough time converting the traffic we’re already got. Often, the obstacles to conversion are not the big, shiny, whiz bang functionality; they’re lots of little things that add up to big problems. Those problems are hard to see without a concerted effort, as I discussed in more detail in my Tree Stump Theory post and other posts on conversion.
2. Truly learn how effective your site is from your customers’ perspective
   We can all identify lots of improvements we’d like to see on our sites, but it’s the improvements our customers most need that will drive our best growth. So understanding where we are and aren’t effective from our customers’ perspectives is critically important, but difficult.Focus groups and usability labs can be very helpful, but they can’t be our first or only methodology because it’s not possible to project learnings from a small group of people onto our entire population of customers.

   First, we need to quantitatively understand our effectiveness in the eyes of our total population, and that requires a statistically solid customer polling and analysis capability. Blatant and shameless plug alert: I’ve had great success using ForeSee Results in the past for exactly this purpose. Once we understand problem areas at a macro level, we can add a lot of color by interacting directly with customers in focus groups and usability labs. More details on this process can be found in my post entitled “Is elitism the source of poor usability?”

3. Consider getting some help from usability professionals
   Usability audits are different from usability labs. Usability auditors are professionally trained to understand how people interact with websites. Many of them have degrees in Human-Computer Interaction, a field that truly seeks to understand how people interact with software. These types of people can really help to identify problems with our user interfaces that untrained eyes have trouble seeing but which regularly obstruct customers from accomplishing their tasks.
4. Put in place a process to continuously improve
   This is really about budgetary and project management mindset. We must just accept the fact that we can’t tread water in a never-ending swimming race, and our only chance of competing is to keep swimming. We have to build our staffs, our budgets and our processes with the recognition that competing in the marketplace means continuously improving our customer experiences. Which leads to …
5. Wash, rinse, repeat
   Since the leaders in the marketplace are running this same cycle, we cannot rest. We must continue to recognize our sites are broken, continue to measure our effectiveness from our customers’ perspectives, find problems, fix them and begin again.

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We’ve got a lot of data that shows that retailers who best satisfy their customers generate the best financial results. I suppose that statement doesn’t sound like rocket science. But understanding that satisfaction has a direct relation to expectations and that our customers’ expectations can change independent of what we do on our own site is important. The leaders are continuously improving their sites, and they’re improvements are raising our customers’ expectations. We’ve all got to swim harder to keep pace.

What do you think? What’s your view on the marketplace? How have you see customer satisfaction affect your business?

Is elitism the source of poor usability?

Most sites are still achieving single digit conversion rates even though customer intent-to-purchase rates are 20% or higher in most cases. Customers are continuing to run into obstacles to the purchase process that need to be eliminated. The good news is that during this time of limited capital investments, retailers can use low cost means to find and eliminate as many obstacles to purchase as possible.

The first step is to get into the right mindset and remove what I feel is the biggest disconnect with the customers that many retailers have: we’re way more comfortable and experienced with our own sites than our customers are. We use our sites every day, and we know exactly how they’re supposed to work. However, our customers are generally nowhere near as familiar with our sites as we are.

Two weeks ago, I was lucky to be able to attend GSI’s Connect conference for its clients. I was even luckier to attend a fantastic session by GSI’s Senior Director of Usability, Michael Summers. Michael got the audience’s attention pretty quickly by calling us all elitists…and he had a good point. He asked us how many of us fit the demographic for today’s main Internet users and quickly made the point that we were higher educated, higher paid and more Internet savvy — by a long shot — than the average site user in the marketplace. If that wasn’t enough, he showed some video of average Americans shopping online who had trouble with some of what we in the industry would consider among the most basic aspects of websites.

To solve this disconnect we need to see our sites through our customers’ eyes. There are a number of ways to do this that I’ve found to be effective.

1. Use statistically significant customer satisfaction surveys to get trendable data that will  point to the biggest problem areas of the site.
   The two key phrases here are “statistically significant” and “trendable.” Per my last post, continuous measurement is important to avoid random outliers and uncover the underlying truth. When done correctly, customer satisfaction surveys can be extremely reliable, accurate, and predictive and can tell you not only which areas of a site customers complain about most, but also which areas of the site will actually have the biggest impact on purchase intent and loyalty. This is critical information to provide some some direction on where to focus your usability efforts.
2. Ask open-ended questions to add color to the quantitative information.
   Quantitative analysis is extremely useful, but numbers alone aren’t nearly enough. Numbers will certainly tell you the problem areas of the site, but to really get your arms around what the numbers are saying requires adding some color to them with some qualitative information. Asking more open-ended questions like “If you could make one improvement to our site, what would it be?” are good starters to bring some of the numbers to life. If the numbers tell you that customers in general are having problems with navigation and you see that multiple customers say in open-ended comments they just want to see all the blue dresses in stock, you might start to consider adding color choice to your navigation. Or maybe you already have an option to navigate by color, but the customers aren’t seeing it and you’ll need to find a way to make it more apparent.
3. Watch your customers use your site.
   The absolute best way to add color to the data is to actually watch customers use the site. In the past, I’ve seen great discoveries come from taking a laptop into a store and asking real customers to shop on the site while I or someone on my team watched silently. In these situations, it’s very important not to be too prescriptive in the tasks the customer is asked to do. Ask them to “find and buy a new pair of dress shoes” rather than “go to the men’s tab, then select dress shoes and find a pair of black, size 9 shoes.” It never fails to amaze me in this situation how many different avenues customers will take to accomplish the task, and they’ll frequently run into trouble. These trouble spots are the areas to find and eliminate. Some of the smallest fixes can often significantly improve conversion and customer satisfaction.If the logistics of getting into a store are too difficult or you don’t have physical stores, there are technology alternatives, like Tealeaf’s CX and ForeSee’s new CS Session Replay, that provide the ability to replay customers’ sessions on your screen.
4. Have an expert conduct a usability audit.
   Even after discovering where customers are having trouble, it’s sometimes still very difficult to determine exactly what you should be doing differently to make the experience easier and more intuitive for your customers. In those cases, expert advice via a third party usability audit is an excellent solution. I’ve used trained usability experts in the past to identify specific improvements that led to tremendous business results. Third party usability auditors bring to the table both fresh and trained eyes that have likely seen problems similar to those on your site before and have come up with solutions for those problems or seen how other sites have solved those problems.

Regardless of the mechanisms you choose to use, the key to better usability, better customer satisfaction and the resulting better conversion and sales, is finding ways to see your site through your customers’ eyes.

Are you a usability elitist? Do you watch customers use your site? What have you learned in the process?