We all know that product or service reviews are helpful in positively influencing the propensity of customer to buy. However, most research in this space has focused on the product and the moment of purchase. Lets evaluate some very important dimensions of customer engagement.
If we put ourselves in our customers’ shoes, we realize that a product feature specific review is only partially helpful towards the goal of true customer engagement. In most cases, customers are looking for “fitment” in addition to quality and price. In addition, customer evaluation of a product does not start when they search for a product. It starts much before that. For example, when customers are first made aware of a need, or when they make a shortlist of product that they think may meet that need. The presence of reviews help all along no doubt, but they the customer is left to decide on their own. We need to initiate customer engagement much earlier in the cycle, and base it on information broader than the product itself. We must look at the customer need and context.
In The Principle of External Reinforcement, I outlined a framework of customer partnership towards driving customer engagement. In summary, the principle tackles the question: How should we help given a customer’s context?
As the figure illustrates, a customer journey is only partially met when the customer engagement is centered on our own products and services. Customers expect that we will position ourselves in a positive light. A typical response is to cut through the clutter and go directly to the details of the service or product they are looking for. Once that is accomplished, customers will look for external reinforcement – best practices, what else is available, what they should be looking for before they decide etc. It is here that traditional engagement models fail. By focusing only on ourselves, we fail to become the reference point in the customers’ minds. It is definitely desirable to be validated by external sources, but by not engaging the customer on the additional dimensions, we miss the opportunity to create a benchmark in their minds, and fall short of our customer engagement goals.
As customers, while we all have different ways to research and engage in conversations, satisfying this need for external reinforcement is one of the foundations of how companies need to engage, sell and service in a digital world. The need for external reinforcement must be addressed at all times by engaging in a conversation not only with the customer but also with their network. By conversation I mean providing a contextual environment to better trigger and satisfy explorations by customers, noting their actions, understanding them, interpreting them, and then reacting in an appropriate manner over multiple channels and media by including their social and other networks. The Principle of External Reinforcement is about striving to understand the context of a customer’s needs and buying stimuli, and by constantly acting to ensure our actions are in tune with how the customer’s environment is structured, and changing. This framework then lays a strong foundation for customer engagement.
Our journey as customers has important implications for who will succeed in winning our business, and that of our networks, now and also in the future. In fact, one of the first things we do when we look up a product online is to look at comparative ratings and product reviews by others. If we find helpful reviews, research tools, and satisfactory educational product information on the website we initially visit, and if the purchase timing is right, then we are likely to make a purchase right then, or at least come back to the same website and make our purchase – and perhaps many subsequent ones. Similar criteria exist for B2B sales as well although complexity and length of the sales cycles and mediums of information vary significantly.
However, to be able to drive customers to our product, and to make them come back to us again and again as they decide, they need to be hooked onto the source (or seller) as a “partner.” The seller must become the anchor. Otherwise, as customers, we continue to research and look elsewhere for an anchor – online or physical. It’s a perfectly natural and an expected course of action. How this customer experience, and hence customer engagement, unravels is the key to defining our chances of buying the service or product from a particular source. If the initial engagement lets us go without establishing a connection with us, then it gives up the control, and the need for external reinforcement prominently steps in. That’s the very reason why marketing is different from sales. It must create a strong relationship with the customer in addition to raising awareness, running promotions and offering other incentives. When boundaries between marketing and sales are diffused, we lose control of the customer conversation, as well as effective customer engagement. And we end up fighting a faceless, commoditized battle. Yes, the outcome of marketing may be to set up the sale, but that’s not its purpose. It’s a crucial difference in the digital world.
These validation questions also imply that traditional customer engagement approaches that focus on showcasing the product itself are inadequate. Sure, most sales today are provided through attractive offers and promotions, but it is still a numbers game. Relevancy and effectiveness – and hence total cost of sales – can be vastly improved by carefully addressing the needs for external reinforcement.
- Help customers make the right decision about their choices
- Help customers make a conscious choice about us
- Help customers feel good about their choices
- Help customers with changes in circumstances
When we base the customer relationship on value as measured by them, the customers are proud of their choice of product and about working with us. This automatically helps retention rates, decreases service costs, as well as increases the total lifetime value of the customer measured by repeat or cross-sell / up sell.
Based on The Principle of External Reinforcement in my book “Dancing The Digital Tune: The 5 Principles of Competing In a Digital World“