Which is the more powerful marketing asset, customer engagement or customer loyalty?
Which is more important to marketers, an engaged customer or a loyal one? This is a compelling question—and one that seems to come up more than ever before in the daily discourses I have with senior-level marketers across industries.
Here’s a question I often ask in those discussions: “Would you rather have a loyal spouse, an engaged spouse, or both?”
I would always choose a loyal spouse; yet having a mostly engaged and always loyal spouse is the best, as long as the spouse’s experience in the relationship isn’t steeped in negative engagement. For example, if I—married, with four overscheduled kids and a small business—were to take a Saturday off and go play golf with my buddies, I’m quite sure I would still have a loyal wife, but I’m also sure that there would be some form of negative engagement from her in response to my temporary “escape”—or narcissistic pleasure—as my wife would argue.
Loyalty is the way to go
Similarly, I assert that having a loyal customer is the most important asset a brand can possess. (As a matter of full disclosure, I am a loyalty marketer, so I may be a bit biased.)
Consider the following: Among its many assets deep customer loyalty helps brands to recover quickly when they deliver a negative experience—like my golf outing—because customers know that their preferred brands will listen and address the issue. What’s more, brands can add incremental and measureable value to the relationship in that win-back situation if the issue is addressed properly. Studies have shown that customers who have had a problem resolved by a brand are more loyal than those who have never had a problem with it at all.
The fact is, when discussing the issue of customer engagement versus customer loyalty, marketers often focus on positive customer experiences and their impact on engagement and loyalty. But those who do often forget one thing: the human element.
Marketers need to remember that despite their brand promises, not all experiences with their customers are going to be positive due to the human element involved. For all of the good intentions that brands may have, the customer relationships they’re working so hard to build will always be influenced by the actions and attitudes of the part-time contact center agent who wasn’t informed of the latest promotions, the server who grudgingly stepped in for a peer who called in sick, or the associate who didn’t honor the “price match guarantee” that was so eloquently described in the Sunday circular.
Why choose?
I used to believe that if brands were to choose, they should choose to have both loyalty and engagement. Yet recently, more and more brands that I’ve spoken with are concerned about negative engagement—not knowing what it is, how to define it, and being unable to measure its impact on long-term customer behavior.
When positive and negative engagements are considered, it’s quite clear that loyalty, when viewed from a larger behavioral standpoint should be of utmost importance to your marketing team. Loyalty is about fostering a sustainable behavioral change in your core audience based on the ability to create a mutually beneficial dialogue and value exchange between brand and customer. The ability to listen effectively and address customers’ concerns, even if it means that you don’t address their concerns in the manner they anticipate, is very powerful. Brands that do this are the ones that have ardent supporters.
Customer engagement, on the other hand, is enigmatic, because each and every situation or interaction is wrapped in the contextual and temporal concerns of a specific individual or group of individuals. Short-term expectations can be transient, so if you’re not asking in each situation, “What are your expectations?” there is greater risk of missing the mark on engagement.
When marketers seek to define and measure customer engagement, it’s usually quite difficult. Engagement is hard to predict and often subject to the whims of the “irrational” consumer (as author of Predictably Irrational Dan Ariely would posit). The solution for marketers is to be thoroughly prepared and to script each and every engagement for optimal results. Doing so is much more difficult than bolstering customer loyalty by taking such actions as saying you’re sorry and addressing an issue to the best of your ability when the company makes a mistake or delivers a poor customer experience.
An engagement may have been messy, but loyalty is quite clean.
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Mark Johnson, Loyalty 360
Mark Johnson, CEO and CMO of Loyalty 360, has years of experience designing and administering loyalty programs, CRM, and data-driven marketing communications for industry leaders such as Fifth Third Bank, Stored Value Systems, and Size Technologies. A sought-after speaker and writer, Johnson is frequently called upon by media worldwide to share his expert insights into customer and employee loyalty issues. He is currently pursuing a second MBA, from Xavier University (his fi rst was from the University of Cincinnati). He’s also pursuing his four young children. “My life,” he says, “is focused around getting my kids to swim meets, practices, soccer practice, soccer camps, training, gymnastics, etc. I love my family in a big way and they sacrifi ce a lot of me as I am always working, so I make sure that I put as much effort, energy, and passion into them.”
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