In our last post on customer engagement, we looked at what this means in a virtual world for wealth managers. But that’s just step one. Whilst you might have been persuaded that customer engagement is the way forward, you now need to convince your FD!
Getting people on your side
The numbers were pretty persuasive. Who wouldn’t want engaged customers that, according to Gallop Consulting, contribute 23% more than the average customer in terms of share of wallet? And if by engaging customers you can retain more, there’s plenty more research (see below) to suggest a significant impact on profitability.
However, this is the real world. There’ll be sceptics (even we’re sceptical of a 75% increase in profitability), competing priorities and IT development. Stakeholder management will be key. You’ll need to do your homework and develop a sound business case:
- Undertake customer research – what do your clients want? What do competitors clients like/dislike about their websites?
- Review secondary sources – use real life examples of how customer engagement has led to increased profitability.
- And use competitor insight – who’s doing well? And what are they doing to drive this?
Objection, your honour!
Of course there’ll be objections. Think through what these might be in advance and whether they can be overcome:
Financial: “Isn’t this going to cost us a fortune?” No, it really shouldn’t. But more importantly the benefits should outweigh the costs. Know your costs and work out what you need to achieve to break even. Is this realistic? What more could you expect? What else might happen? Do some sensitivity analysis to keep the financial bods happy.
IT: “We haven’t got time for this.” Customer engagement needn’t mean a complex IT build. Ready-made solutions are plentiful. Of course, we’d be very keen to show you what Kurtosys can do… We’ve a range of solutions which can be integrated with your existing set up; from secure portals and fund tracking tools to client reporting and more.
Depending on the size of your business, you might need to satisfy compliance, legal, procurement, IT security and others. Use a rational approach. If that doesn’t work, try an emotional one! Appeal to their better nature. Chances are they’ll be engaged with some on-line brands in some way. Find out about these and draw parallels to help them understand what you believe customer engagement can deliver.
Right, objection handling prepared, get ready for stakeholder management.
Step 1: Identify your stakeholders
Step 2: What do you know about them? Who do you expect to be on your side or against you? How much influence do they have?
Step 3: Plan your attack. Be prepared; plan what you’re going to say before you get there. Be confident about how you will measure progress and success. What will the review points be?
Step 4: You’re ready! Engage at will. But don’t expect everyone to be bought in on day one. This will undoubtedly be an iterative process!
Congratulations, you got the go ahead. What’s next?
Delivery. But that’s a whole subject in its own right so, for this post, let’s assume we have a magic wand…
Your online customer engagement journey is underway. You have fresh, targeted, valuable and concise content. You’re blogging and providing fund management commentaries. Your clients can contact you by email, access their account twenty four, seven, research products themselves, review their investments’ performance online and rate it.
Brilliant! But how will you know whether they’re REALLY engaged?
Measuring success is paramount
So, how do you determine the right metrics?
- Focus on what you are trying to achieve overall (reduced churn and increased share of wallet) and the drivers of this behaviour.
- The metrics that you track should ideally prove causality between positive changes in your client’s behaviour and the customer engagement programme.
- Get the metrics signed off by your management team. You’ll need to ensure adequate MI is readily available in order to continue to receive the ongoing support and resources you need.
According to Forrester Research there are four elements which can determine the level of engagement with your product or brand; involvement, interaction, intimacy and influence.
Involvement: These are the more traditional metrics. Quite simply, who has found you online, how long do they spend on your site, which pages do they visit and how many times do they visit?
Interaction: Other than reading your content, what else are they doing? Do they buy, sign up for newsletters, follow you on twitter, email you or comment on your blog?
Intimacy: How do they feel about you and your brand? What are they saying about you via social media, on your website or in person?
Influence: Are they sharing your content with others? How are they rating you, your products and your brand?
The table below gives you some ideas for the Key Performance Indicators you’ll want to track which determine customer engagement as defined by Forrester. All of which can be gauged using widely available analytics. Don’t forget, you need to know your start-point so you can see how far you’ve come.
So, how does this translate to profitability?
You’ll be driving more traffic to your site. Perhaps as a result of recommendations, increased reach through blogging and promotion of the new functionality. Or perhaps simply because you’ll be losing fewer clients to your competitors.
People will stay on your site longer as there’s more interesting and dynamic content. This will increase their likelihood to purchase so your conversion rate should also grow. And if your clients are truly engaged, they’re likely to give you more of their share of wallet, increasing the average transaction size.
So, as long as the growth in sales revenue exceeds the initial (and any ongoing) costs, profitability will also be on the up.
Hey presto, you’ve reached your destination!