The Rules of Engagement
September 01, 2008
By Nathan Adkisson
A new whitepaper suggests that it is engagement, more than just price points, more than just incentives or customer service, that are necessary for a company's greatest success.
The report, a collaboration between customer strategy firm Peppers & Rogers Group and technology services company Allegiance, says the old model of product, price, place, and promotion is extinct. Companies that achieve all of these will barely stay afloat today. Instead, they must strive for engagement.
"Engagement is the soft and fuzzy business of connecting your products and services to the human heart," says Kyle LaMalfa best practices manager for Allegiance. "But today it is completely practical: delivering hard, measurable benefits."
Six Steps to Engagement
The new strategy is illustrated with a six-level pyramid, built on a foundation of trust: every relationship begins with customer or employee faith in the company.
The next level of engagement is satisfaction—the product or the performance must meet expectations. After this comes loyalty, in which the client or worker will continue the relationship with the company.
Older management theories held that the next step, recommendation, was the ultimate be-all measurement of a company's success. The new study calls this a "myth," and articulates two other steps on the road to engagement beyond simply recommending the brand.
The whitepaper says customers should genuinely believe that the product is the best, and employees should be convinced that the company is the best place to work. This will lead to the top of the engagement pyramid: excitement. This level is attained when a customer or a worker feels strong emotions like pride and exhilaration about working for the company or using its products.
Chris Cottle, vice president of corporate marketing for Allegiance, wants companies to start treating engagement like an asset.
"Price, quality, and service are always going to be there; they’re par for the course," he says. "It's like if you're flying an airplane and you only look at the fuel gauge. We’re coming along and saying no, you need a whole dashboard of tools."
The report even suggests using the same rubric to measure both employee and customer engagement.
"Almost all studies focus on the customer," Cottle says. "We know statistically that there is a huge correlation between consumer and employee satisfaction."
Allegiance has developed cost-effective feedback methods through efficient "pulse" polls that are rarely more than 25 questions long to avoid survey fatigue. The information collected is specifically designed to measure where a customer or employee fits into the engagement pyramid.
"Right now [many feedback systems] are loosey-goosey," Cottle says. "It will go in an email inbox and they’ll give it to someone who doesn’t really care."
One of Allegiance's clients is Denver-based Vectra Bank Colorado. Until just a few years ago, the bank used paper-based and word-of-mouth feedback systems.
Erica McIntire, director of marketing communications for the bank, says Vectra used Allegiance's engagement tools to complete their success equation: "Happy Employees + Happy Customers = Revenue." They increased pulse surveys from annually to monthly and learned that one of their lowest scores was in the unexpected rewards category.
"We discovered that’s what employees want," McIntire says. "They wanted words of congratulations, and not only a monetary bonus or a prize. As a result we started the right kind of perk program. We saw something that was identified in the data, we addressed it, and there was an improvement. It made the employees happy and there was an enormous cost savings."
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