'If customer is King, engage the King!' - The neuro-science secret we can use to explore the Expectation Economy
Engaged customers are a company’s richest resource. They bring in higher sales and profits, are tolerant of your flaws and are less likely to switch to the competition.
According to Gallup’s research, fully engaged customers lead to a 23% increase in business income, as opposed to customers who are not engaged or are actively disengaged, who in turn account for a revenue drop of 1% and 18% respectively. Furthermore, a 5% increase in customer retention can increase a company’s profitability with as much as 75%.
However, engaging customers is easier said than done.
There are multiple reasons for which customers are increasingly disengaged with brands: from the increase in online shopping, to the decrease in innovation gaps between brands and to the fact that companies just can’t keep up with the expectations of ever-demanding customers. Therefore, as customers develop shorter attention spans and have higher expectations, they will find that brands become less relevant to them and will therefore fuel the disengagement trend.
With “millennials”, the figures are grim: they have the lowest level of engagement, both as customers (around 75%) and as employees (71%), according to a Gallup study. But, on the other hand, engaged millennials are more profitable and loyal than the other customer groups, states the same study. Therein lies the challenge and the opportunity. Giving up on engagement and focusing on transactional efficiency is not therefore the answer. The key lies in creating new strategies and effective tactics to reach this elusive goal.
One of the top challenges with building customer engagement comes from the lack of accurate customer insights, according to a study performed by Microsoft last year. Without knowing what your customers want from your products or services, you simply cannot make them happy. Gone are those days when, if you had this truly great product that satisfied a customer’s needs, long-term loyalty would be implied and secured. Today, it is so easy to find new and better alternatives, to products and services, and most times a customer doesn’t have to look too far to find them either. As a result of being part of the global digital ecosystem, customers are actively setting different consumer trends, while companies and brands are busy trying to keep up with them.
And the irony of it all? Despite all these efforts, most companies end up losing customers anyway, and in the end, they still don’t know why!
Therefore, in-depth customer knowledge allows you to craft your offers in a compelling manner that will draw their attention and convince them to give you a try.
Then, what differentiates engaged or loyal customers from merely satisfied ones? Loyal customers have an emotional bond with the company or brand which translates into turning a blind eye to the company’s flaws. Additionally, loyalty has this amazing property of creating an exit barrier that practically helps you retain customers, particularly when they are approached and “bribed” by other companies into jumping ship.
This emotional bond, however, is difficult to measure via traditional research methodologies that use rational constructs to evaluate emotional connections and declarative answers to assess non-conscious reactions.
We invite you to read the rest of the article on Trendwatching. You can read about how neuroscience-powered tools impact the creation of successful engagement strategies in the banking sector. Also, if you are interested in finding out more about how this industry is handling current customer retention challenges, you might enjoy reading this article as well.