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Customer engagement: A new paradigm?

Whilst the core principles of marketing have not fundamentally changed over time, numerous models, theories and acronyms have entered our marketing lives. And as we have discussed in several other papers, the marketing world in which we work keeps getting more complex. The most notable change is the shift in consumer influence and power; you only need to look at the growth in peer reviews, Facebook, Twitter and concepts like Groupon to see this power shift.

But not only that, brands who did not traditionally use direct marketing techniques (as they had little or no customer data) are now keen to learn how to harness the power of data in the digital space and how they too can start to build direct customer relationships.

From CRM to Customer Engagement

One of the trends that we see is the move away from Customer Relationship Marketing (CRM), coined in the late 1990’s as the ‘in thing’, to Customer Engagement. Is this the same concept repackaged or is there a fundamental difference in these concepts?

At the heart of it, we believe that engagement is fundamentally no different to CRM; it is still about the use of technology, data, processes and channels to drive value. The difference – or the devil, is in the detail. Forrester Research defined four key elements that need to be present for customer engagement to work.

The focus of CRM is in Involvement and Interaction. CRM has brought in technologies, techniques and best practices to attract and communicate with customers. Like many things, these capabilities are evolving; developments in the management of new interactions and data continue to push us towards this new engagement model. The need for greater automation backed by tried and tested decisioning techniques is now a must have.

But according to the Forrester Research where Customer Engagement differs from CRM is in the areas of Intimacy and Influence. This can only come about through greater interaction with customers, i.e. the creation of true two way conversations. The greatest step change will be allowing customers to proactively engage with your brand and not only that, being able to react to them. At the moment many brands have only just touched on social media and use these tools as a place to list or present the latest company news or views. Brands need to use Web 2.0 technologies and new processes to manage a true two way communication.

How will this affect your data strategy, management, analytics and campaign planning?

It isn’t a case of replacing existing activities with new ones; it is about evolution and integration. Where appropriate, relevant and feasible, existing activities need to develop to embrace new social and interactive capabilities and new techniques need to be added to the marketing tool kit.

Examples of changes include:

• Marketing Planning – needs to embrace social media as a new two-way communication channel, a new source of data and new place to manage content and drive greater traffic to your sites

• Data strategy – also needs to embrace new digital data sources and how they could integrate into your customer database and the use of unstructured data from social tracking.

• Customer Database Management – where possible, new customer data feeds (from email, website) should be linked back to existing databases

• Non identifiable (or addressable) data management – a greater challenge is how to manage the growing availability of behavioural data which is not linked to a person; how is this data stored and managed and how is it managed in relation to customer data

• KPIs and dashboards – need to step beyond the traditional methods and measures and incorporate new metrics which track and evaluate customer engagement (web and social data)

• Satisfaction and loyalty – as well as new tracking, these programmes need process and capability developments to allow the management of two ways customer communications; a challenging brief in terms of content management and control

• Analytics – analytics needs to take a step into the customer lifecycle and turn insights into customer events, needs and actions based on their particular behaviours

• Social media – consider this new channel not only for content and managing two way conversations but as a source of new contacts, email addresses, customer data (consented) and leads.

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