Wednesday, October 26, 2011

Measuring Customer Engagement as a Predictor of Profitability

How are you currently measuring your marketing effectiveness?  If you're like most people, you might measure your marketing effectiveness by looking at your sales and profit numbers.  And that isn't wrong.  It's also not the only way to measure the long-term success of your marketing program.

Steve Jobs and his biography have been the topic in the news this week and one of the conversations inside of these interviews has been his decision to keep Apple a closed platform.  There was a time when just looking at Apple's sales and profits numbers would have made him wrong.  Yet, in the long term, his marketing strategy of having a closed platform allowed for a smooth, effortless and seamless connection across multiple devices.   Jobs took a stand and focused his efforts on building an engaged and loyal customer following.  Without his dedication to his customer evangelists, his strategy would have failed miserably.

This is a great example that while dollars are one way to measure success - there are other ways and this is where measuring feedback either in the form of a survey or crowd sourcing project will give you some of that additional marketing contexts within which you can measure the effectiveness of your marketing strategy.

You can measure customer engagement or loyalty as recommended by Gallup and Reicheld's net promoter score.   Customer engagement and loyalty are infinitely more powerful predictors of profitability than what we've been used to. It's easy to poo poo questions that measure a customer's emotional attachment because they aren't perceived as hard data.

But now that we know from all the extensive brain science research that every purchasing decision is, in fact, emotional -- then shouldn't we be measuring emotional attachment to our brand?

Customer engagement is also a wonderful tool for developing long-term brand strategies because it will show you where and how to differentiate your offer to your most profitable customers, inspire your target customers and connect in a way that builds relationships with them.

Here are the 11 Questions Outlined by the Gallup Customer Engagement Survey



  1. Overall, how satisfied are you with [Brand]?

  2. How likely are you to continue to choose/repurchase/repeat (if needed) [Brand]?

  3. How likely are you to recommend [Brand] to a friend/associate?

  4. [Brand] is a name I can always trust.

  5. [Brand] always delivers on what they promise.

  6. [Brand] always treats me fairly.

  7. If a problem arises, I can always count on [Brand] to reach a fair and satisfactory resolution.

  8. I feel proud to be a [Brand] [customer/shopper/user/owner].

  9. [Brand] always treats me with respect.

  10. [Brand] is the perfect [company/product/brand/store] for people like me.

  11. I can’t imagine a world without [Brand].


Ideas on How to Apply Customer Engagement to Your Feedback

There are obvious benefits to following the Gallup methods and licensing their process.  But if you don't have the dollars for that, look at ways that you can apply the principles behind customer engagement to your own process.

One option is to create a basic matrix question using these 11 attributes.  It's easy enough to insert into an existing survey or to simply run on its own.  For more detailed information on how to use customer engagement, you can read this article from Gallup that discusses the intricacies of measuring customer engagement.

What other ways are you measuring your marketing success?  Share your strategies in the comments below.
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