Increasing Customer Engagement

1. I D C A N A L Y S T C O N N E C T I O N
Michael Fauscette
Group Vice President, Software Business Solutions
Increasing Customer Engagement
December 2012
The Internet, enabled by the proliferation of mobile devices, offers new ways of sharing and
communicating in real time through social networks and social media. New technology is creating
tech-savvy, "social" customers that expect brands to engage, interact, and provide a complete,
positive customer experience at every touch point. To engage and service these new prospects and
customers, companies need to build a comprehensive customer experience strategy. A key part of
that strategy is providing and facilitating a community where customers can share and interact with
the brand and with each other. Community management software to enable these communities is
increasingly important as a part of the brands' customer experience strategy. Companies can provide
information about products and services, facilitate peer-to-peer interaction and support, nurture
influencers to encourage word-of-mouth marketing, and even get feedback about the kinds of
products and services that customers are really looking for. In this context, companies need to
formulate a high-level customer experience strategy that includes branded communities that
encourage customers to join and to interact and engage with the brand and with each other.
The following questions were posed by Get Satisfaction to Michael Fauscette, group vice president of
IDC's Software Business Solutions, on behalf of Get Satisfaction's customers.
Q. What are the top trends in customer experience, and how do you distinguish between
customer experience as a business strategy and the technology that helps support it?
A. Refocusing businesses on building a comprehensive customer experience strategy is
growing out of a need to change the way companies engage with customers and deal with
the new expectations of tech-savvy, "social" customers. It's important to understand the kind
of change that's happened to the way people want to interact with each other and with
companies, brought about by the ubiquitous hyperconnectivity created by the Internet and the
subsequent growth of the social Web. With the consumerization of IT and the rise of the
social Web, the way people interact online has changed dramatically, and we see this trend
creating customers that want to interact with companies in a more personal, conversational
way. Given this reality, companies are recognizing the need to formulate a high-level
business strategy that provides a positive experience at every touch point in the customer life
cycle and encourages customers to join, interact, and engage with the brand.
Strategy has to be actionable, however, and processes and systems must be changed to
meet those customer experience goals. A customer experience strategy involves all
employees and every business process, but several obvious customer and prospect touch
points are very high priority as a company builds out systems and processes to meet the
customer experience strategic objectives. Sales, marketing, and customer service processes
in particular are critical in providing a comprehensive customer experience. There are a
number of different opportunities for improving the customer experience, such as tying your
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2. customer service system into some of the new social network channels, enabling you to
identify customer issues and head them off in a scalable, systematic way that might not have
been possible in the past. Another could involve building a customer community that changes
the way customers engage with the company and each other. Customer communities are
built and managed through a technology platform that allows you to effectively manage how
customers interact with each other and the brand, providing a very powerful tool for
supporting the overall customer experience strategy.
Q. What is the role of customer communities in increasing customer engagement?
A. Customer communities play several different roles with respect to a customer engagement
strategy. These communities offer peer-to-peer activity where customers can have
conversations, share information and tips and tricks, as well as help head off product
problems. There's a lot of value in enabling customers to have conversations with each other
or with a particular company given their motivation to talk about products or services. If
customers care about a brand and want to be engaged with it, participation levels can be
really high. From a company perspective, customer communities also offer a great way to
find, nurture, and leverage influencers and connect them to prospects that are evaluating
products. Nothing sells better than word-of-mouth marketing from customers that are already
using a company's products.
Benefits for customers also need to be considered. Customers can get support information,
find answers to problems, or just answer "how to" questions. The community provides a
frictionless way for customers to find information and share knowledge. This also reduces the
support workload and service cost for the company because customers answer a lot of
low-level questions for each other, which deflects a certain number of customer support calls
and adds to the company's knowledge base. In fact, answers in the community create a
social knowledge base that ensures that useful information becomes available to all
customers and prospects that may have similar questions. This can lower support call
volumes, freeing up customer service staff to focus on more challenging problems and
concerns. In sum, communities increase engagement, improve customer satisfaction, and
provide value to both customers and the company.
Q. What are the benefits of customer communities as a part of the customer experience
strategy?
A. Customers are brought into an environment where companies can monitor activity to improve
the customer experience and facilitate peer-to-peer support. Through these transactions, both
companies and their customers gain access to content that they wouldn't have otherwise.
Getting customer input about a product has great value for innovation because there's a
feedback cycle created about problems, product use, and the kinds of products and services
customers are really looking for. A customer community is an excellent place to solicit product
feedback and gauge the level of interest by seeing how many other customers like certain
features and vote up product ideas. Sharing the "voice of the customer" across the whole
business has lots of downstream value for the company and ultimately for the customer.
Customer-generated information can be tied into the company's enterprise social network to
give product designers access to previously unavailable ideas and information, for example.
The opportunity to tie customers directly into a company's innovation process can produce
dramatic results.
There is also the opportunity to influence the buying decision when prospects are exposed to
a community that's really active and can help them better understand the value proposition
for the product or service. From a marketing perspective, nothing is more valuable than
word-of-mouth marketing. A community that facilitates influencers to become more engaged
2 ©2012 IDC

3. and share their experiences with prospects offers a great opportunity to accelerate
customer acquisition and revenue for the company.
Q. What are the barriers to adoption for these technologies in today's business
environments?
A. Getting a critical mass of customers to participate is a key challenge. But this is kind of a
double-edged sword. You have to get the customers into the community for it to be valuable,
and yet for the community to be valuable, you have to have enough customers in it. To draw
customers in, companies need to provide customers with a sense of what the value is in
exchange for their participation. Companies have to ensure that they are delivering value in
an ongoing way so that customers engage, derive personal benefits, and keep coming back.
Once customers are engaged in the community, the network effect really helps to continue
the growth of the community.
Active community management is really important to helping companies accomplish these
goals. Successful communities have a very active management philosophy. They are likely to
have one or more community managers, depending on the size of the company and the
community. To help keep the community vibrant and interesting, community managers have
specific roles, such as looking at analytics, finding influencers, getting a jump on problems, and
helping customers navigate and better understand how the social network environment works.
The value of the community is about making connections. Companies have to facilitate those
connections by using the right technology platform and community management strategy and
by getting experienced and knowledgeable community managers on board.
Q. What are the key considerations in selecting a customer community platform?
A. The first consideration is to understand your requirements and be clear about what you're
trying to accomplish from both a technology perspective and a strategy perspective. That
means laying out what outcomes you're looking for and using best practices to select a
technology partner. It's important to look for a partner with depth of experience, financial
stability, and solid customer references. The vendor should also offer client services
capability to help customers understand how to manage and optimally implement
communities.
It's also important to look carefully at the platform's ability to connect to other systems. For
example, it might be advisable to integrate a community platform into an existing CRM
system as well as the internal enterprise social network. That kind of integration has to be
accomplished easily and without a lot of additional expense. We also advise evaluating the
platform's capabilities for embedding into the company's other Web properties for greater
exposure and a better experience. Additionally, you want a platform that offers added value
quickly. The days of 36-month implementations for IT projects are over, so speed and ease
of implementation are important.
A B O U T T H I S A N A L Y S T
Michael Fauscette leads IDC's Software Business Solutions group, which encompasses research and consulting in
enterprise software applications, including ERP, SCM, CRM, PLM, collaboration, and social applications; software partner
and alliance ecosystems; open source software; software vendor business models; SaaS and cloud computing; and
software pricing and licensing. He also provides thought leadership in the area of social applications and the transition to
the social business.
©2012 IDC 3

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