Engage

A widespread definition of engagement attributed to Forrester is “creating deep connections with customers that drive purchase decisions, interaction, and participation, over time.” Accordingly, the two objectives of the Engage stage are to (1) foster loyalty and (2) co-create value with customers.

Key performance indicators at this stage help measure a firm’s success in attaining these objectives and the achievement by consumers of associated goals. KPIs include the number of shares, brand mentions, referrals, repurchases, and reviews as well as the ratio of comments to posts, comments to likes, and reviews to sales.

The Engage stage is central for many reasons. Perhaps most importantly, recent research shows that loyalty leaders “grow revenues roughly 2.5 times as fast as their industry peers and deliver two to five times the shareholder returns over the next 10 years” (HBR). Working on increasing engagement is thus profitable. There are a few factors that explain this.

Acquiring customers is much more costly than retaining and selling to existing ones, and repeat consumers tend to spend more than new ones (Forbes). Engaged consumers are also more willing to interact with you, facilitating market research and leading to ground-breaking insights. This is particularly true since you can develop winning engagement strategies by identifying what makes your loyal customers loyal. Last, engaged customers work on your behalf, co-creating content that, as we’ve seen, is used by other consumers throughout their journey.

To better understand the value of customers over their lifetime with a company, we turn our attention to the concept of customer lifetime value. We then look at two tools that can help us better understand and measure customer loyalty. We conclude the chapter by examining value co-creation.