The Subtle and Critical Differences between Customer Engagement and Customer Experience
Customer Engagement Defined
Customer engagement is defined by the amount of interaction that an individual consumer has, directly or indirectly, with a company and or their brand over time. It includes all of the interactions that happen along the customer’s journey and includes those that happen before, during, or after a transaction, including whether they occur by phone, online, text, or face to face. It is also defined by customer interactions independent of specific transactions like endorsements or criticisms on social media or comments posted on review sites.
Customer Engagement vs. Customer Experience
Customer engagement differs from customer experience by the interval of time involved. Customer engagement is an ongoing involvement with a product or brand; opposite, the customer experience that occurs in constant moments of time. The differential is that customer engagement is a proactive set of strategies and tactics. But as we shall see, you cannot create customer experiences without a customer engagement strategy.
Engagement Provides the Opportunity…
Customer Engagement strategies are needed to provide the opportunity to create a customer experience. If a company does not provide a variety of opportunities to engage with a customer, the experience of buying a product does not occur.
These engagement tactics are proactive and designed to reach out to the customer to start the buying process. They can range from traditional brand recognition campaigns, reward programs like loyalty and advocacy programs.
Today’s retail industry spends significant amounts on digital signage to convey their branding message throughout showrooms and stores. Companies don’t have to wait for a customer to act before they engage — they can reach out to consumers to inspire purchases, build brand recognition, solicit feedback, and gather information.
Other examples of proactive customer engagement tactics include surveys not tied to specific transactions, reward programs, and social media postings along with promotional or outreach events. Customer engagement builds an ongoing dialog with customers engendering familiarity and awareness to gain some level of emotional attachment to the brand, the product, and the service.
Customer Engagement is Critical
I know this sounds simplistic and obvious, but according to industry analyst firm Forrester Research, customer relationships are now the only competitive differentiator. This makes it vital for organizations to engage customers, to create a managed customer experience that in turn will build customer loyalty and retention.
Engage Your Customers
Customer engagement programs are essential to retaining customers. I am easily offended by the lack of interaction with companies that I have been loyal to if I never receive any recognition for the relationship. If I buy a car from you, and you don’t make an effort to get some additional information from me, like do I have children, maybe teenage and getting close to driving age.
A perfect engagement strategy around this information: special discounts to purchase a second car only available to those who have purchased from you previously. The evidence that engagement strategies play an important part of customer retention and loyalty is everywhere.
A recent Gartner publication quotes,
“An active and engaged customer is more willing to participate with the organization through multiple different channels, ranging from online self-service tools or a mobile application like being able to text for customer service interactions, to community participation or user group involvement. They are more willing to provide feedback when asked, make the best use of the products or services on offer, and make suggestions on how to improve them.”
If You Don’t Tell Me What You Have…
Customer engagement can be a game changer by simply telling prospective customers what you have (inventory or specials) and what you can do for them. Not all advertising takes place outside of the dealership, however.
In the new car dealer showroom, a well-designed digital signage installation can adequately convey this messaging. The more transparent your pricing, policies, and specials are the more engaged your customers will be and the greater the likelihood they will spend money on what you show them.
By engaging customers effectively, new car dealers can gain competitive advantages, increase customer loyalty, enhance revenue, and realize a measurable return on these investments (ROI). As a result, it’s not surprising that many new car dealers are implementing customer engagement optimization programs in their dealerships.
Manly Honda of Santa Rosa, CA uses the AdvantageTec bannerTV to place inventory pricing on the bottom of the live TV feed in the customer lounge. The customers that are waiting for their cars in the service department see ads for additional services and new inventory. Manly Honda makes new car leasing and financing as transparent as possible. This transparency attracts in-store customers to spend more.
Remember, the evidence is that without a coordinated customer engagement strategy, there is no customer experience. No customer experience is typically a bad experience in the buying process and can stop it dead in its tracks.
The Difficulties in Optimizing Customer Engagement
Even though new car dealers may recognize the link between customer engagement optimization and better sales outcomes, many dealers struggle with developing and implementing effective customer engagement initiatives for a variety of reasons:
- Prospective customers can select from a variety of channels — and may, in fact, use multiple channels — to complete their buying journeys. They have come to expect a consistent, personalized, and seamless experience, regardless of the number of channels and devices they choose. In reality, many dealers may be challenged to provide a cohesive experience that spans multiple channels and devices.
- Customer data is often walled in different systems, knowledge bases, and functional areas within the dealership, making it difficult to systematically collect, centralize, and share with other groups internally.
- Service Advisors and other related employees may be overwhelmed or preoccupied with the systems and data required for them to deliver service or be unsure of the next best actions to take to make appropriate, contextual suggestions during interactions. Regardless of the cause, the impression left with customers under these circumstances is apt to be unfavorable.
- New Car Dealers often lack a practical means to analyze large amounts of structured and unstructured data resulting from customer interactions to surface customer sentiments, rising trends, competitive advantages/disadvantages, and other information for timely decision making.
- Cost-containment initiatives have led many dealerships to a service model based primarily on self-service options, like kiosks, rather than on personalized service. According to Gartner,
“This potentially leads to a disengaged customer because 80% or more of customer interactions no longer involve an enterprise employee.”
How to Optimize Customer Engagement
Consistency — All communication channels that the dealer uses should be consistent in appearance, style, messaging, and experience. Consistent does not mean identical. It is very difficult, if not impossible, to deliver an identical experience across a live online chat, an in-store experience, and website self-service transaction, or text-based service offering as an example. The goal is to deliver the same level of feeling, responsiveness, and knowledge of each channel and provide consistent answers across channels. This means all engagement channels must draw on the same knowledge base and customer profiles.
Continuity — Customers should be able to continue a process seamlessly across devices and channels, without having to start over again if they transition from one to another. Increasingly, customers expect this kind of connection across devices and channels.
Customization — ’One size fits all’ approaches to customer service might seem convenient and affordable for a dealership, but ultimately, may not be the most effective. Customers expect organizations to understand their needs and personalize their interactions. Ultimately, the best channels and approaches for engagement are not necessarily the ones that are the cheapest, but those that deliver the necessary information to the customer when and where he/she is seeking it and are the ones that customers are expecting and demanding.
The Solutions That Optimize Customer Engagement in New Car Dealerships
From a practical perspective, how can dealerships put customer engagement optimization into action?
Fundamentally, organizations need skilled, empowered employees who can deliver high quality, personalized customer experiences. This means adopting an existing technology like texting. Service support texting integrated into a dealership’s DMS provides unique customer data insights into customer behavior.
It can answer a variety of questions like:
Do my service advisors have a credible report with their service clients?
Are we being turned down on additional repairs or parts because of pricing?
What percentage of clients accept additional repairs at the price quoted?
–This type of information allows quick adjustments to service policies and pricing that help improve future customer engagement and experience.
Dealerships need technology that can engage their prospective and current customers to increase CSI and customer acquisition and retention. New car dealer digital signage can be and should be the primary customer engagement tool. Showroom visitors and existing customers can be engaged by a variety of digital content that creates awareness and knowledge of product and accessory offerings and potential real equity upgrades while they are in your store. Also, it creates ambiance and a positive buying atmosphere in a subtle way that helps move people ahead in their buying process.
Remember, customer engagement strategies and technologies create the customer experience. The customer experience of the engagement sells cars.
Originally published at www.advantagetec.com on February 19, 2016.