Like I said in the last post, I’m sure there are quite a few different reasons why folks want to measure “Engagement”, and not all of them have to do with Marketing. But if you are talking about Engagement as a metric to be used in Marketing, now you have the complete framework for why (as opposed to how) it is so important to measure Engagement – to define the LifeCycle of the customer, in order to communicate and act in the most customer-centric, relevant way possible. Logically, this approach drives higher profits.

The LifeCycle is about both Engagement and dis-Engagement. If you are in the Marketing camp, you can’t just talk about measuring Engagement. After all, if Engagement is really important and valuable, then dis-Engagement has to be really important and valuable in the opposite way – it’s a bad thing. Dis-Engagement means, literally, that your company is no longer relevant to the customer.

In some businesses, online display advertising for example, it’s not clear that dis-engagement really matters, at least in the current model from the perspective of the advertiser. Hey, an impression is an impression, right? Who cares what happens after that. At least they’re talking about some kind of engagement metric – Duration – which should relate to the quality or the likelihood of an impression. Not much more they can do, in my opinion, for that business model. But from the perspective of the site owner the ads run on, dis-engagement should be a big deal – especially if you paid something to get that visitor to come to your site in the first place.

So, we have Engagement, and we have dis-Engagement, which it seems nobody ever talks about. I sincerely hope that changes in the future as we move forward.

Now, how do we track the LifeCycle, how do we actually implement? It’s really very simple in concept:

1.Define / Measure Engagement – any way you want to, as appropriate for your business; whatever activity or combinations of activity you feel appropriate

2. Measure dis-Engagement – the absence of Engagement, as in the visitor / customer stopped doing whatever it is you define as Engagement for your business model

3. Take some kind of Marketing or Service action to slow or reverse the dis-Engagement with dis-Engaging folks

That’s not very hard, is it? No. If you’re looking for some kind of model to follow for planning and managing LifeCycle communications, take a look at Satama’s REAN.

However, even when you get the LifeCycle and learn to react to it, the system is not optimized yet. The Relationship Marketing Strategy is not optimized until you start predicting dis-Engagement, and taking action to try and re-Engage the customer before they completely dis-Engage. Because once your company becomes completely irrelevant, it’s very hard to change that for the visitor / customer – much harder than if you act before or when the dis-Engagement is occurring. You can’t have an “annual re-Engagement campaign” and fix this – you have to fix it as it is happening, meaning you throw out all calendar-based communication and communicate based on where individuals or segments are in the LifeCycle.

Fortunately, dis-Engagement is usually a process – unless the company screwed up in a really big way. And this dis-Engagement process is fairly uniform and actually quite easy to predict with simple tools. The company most often becomes irrelevant to the visitor / customer over time. In other words, the company gets second chances, the customer often gives the company leeway to become relevant again. So as a company or analyst, the key is to:

1. Recognize dis-Engagement has begun with a customer or segment

2. Have a re-Engagement plan and implement the plan before the company becomes irrelevant to the customer

I’m pretty sure most people reading this know what comes next – how to measure dis-Engagement and act on it – given I have plastered this information all over my blog and web site. If you don’t know how to predict dis-Engagement and the triggers you can use to take action, this is a good place to start. Depending on your business model, you should probably also take a look at what Theo proposes in terms of Kind and Degree for survey work once you have dis-Engagement behavior as a trigger for the survey.

For most web sites, regardless of what you are using as a metric for Engagement, a good clue the dis-engagement process has begun is when a visitor stops visiting, posting, commenting, buying, or whatever is key to generating value on your site. The challenge is you have to recognize this non-event has occurred right away, because the longer you wait to try and re-Enage the visitor / customer, or ask why they are dis-Engaging though a survey, the less likely it is you will be successful. And in case you are wondering, those of you with e-mail tactics that consist of relentlessly pounding your list with the same messages and offers regardless of visitor / customer behavior are not addressing the re-Engagement issue – trust me. Think about it.

I’ll get into how a Relationship Marketing strategy affects e-mail marketing and measurement tomorrow in the next post.

Does the above make sense to you? Questions? Criticism? Problems? Let me know, leave a comment.

There has been a tremendous amount of discussion around the Engagement topic that started here and fragmented into a bunch of chunks and related topics, including here, here, and here. I have also had a lot of one-on-one correspondence in and around these topics through e-mail lately, and while thinking through all this, realized there’s a lot going on but there may be a “can’t see the forest for the trees” scenario building here.

In other words, the discussion is so focused around Tactical measurement issues that folks may not be seeing how “Engagement” is an important part of a much bigger Strategic idea, and that fact should influence the way people think about Engagement, if this whole concept is ever going to be more than just a pile of exotic Tactical metrics lying around.

Now, I realize people want to measure Engagement, particularly on-site Engagement, for lots of different reasons that may not have to do with Marketing Strategy.  I think it’s the nature of people with technical backgrounds to think very Tactically.  Many of these folks are more concerned about usability or something closer to “customer experience”, or the general appeal or stickiness of a web site.  And that’s certainly OK with me, and important work. 

But this post is not for you folks. 

This post is for the more Marketing-oriented analysts and managers, many of whom have technical backgrounds and have done an amazing job of learning about Marketing.  Really.  I wish Marketing folks would take the time to learn as much about Technology as these technical folks have learned about Marketing.

Marketing is much more than the Tactical stuff, like Advertising, Branding, conversion, and all that.  At least to some of us old folks.  Marketing has traditionally had a Strategic role, which means it sets up the business model and ensures that the “product”, whatever that is, directly addresses the marketplace and audience, that the product is built to sell – and stick.

Those of who are interested in Engagement from this more Strategic level of Marketing, this post is for you.  And just as an aside, we’re not talking about fuzzy Branding and social media Engagement stuff here (You’ve got to engage your customers!  Really!  It will be good for business!), we’re talking about real world, provable, profit and loss Database Marketing (here’s how to increase profits by measuring and acting on Engagement).

In the mid-eighties some academic folks published thought pieces around a data-driven marketing approach they sometimes referred to as Relationship Marketing.  In 1992, a pretty famous Silicon Valley guy named Regis McKenna published a book called Relationship Marketing, which put forth a framework and real life examples of how it all worked, mostly focusing on B2B. 

Essentially, the idea behind Relationship Marketing is that rather than segmenting customers by age, income, product, and so forth, you segment them by where they are in their relationship with the company; you create a Marketing Strategy that is customer-centric instead of business-centric.  The core Strategy was this: if you communicate with customers based on where they were in their Relationship with the company, the communications would be more relevant to the customer, so your marketing would be more successful and profitable over the long run. 

Customer-centric.  Relevant.  I’m not kidding.  Check it out on Wikipedia if you don’t believe me; you will be shocked at the concepts and language used.  It all should sound very, very familiar to you when you read it!

It gets better.  To do this Relationship Marketing thing properly, you have to understand what the Customer LifeCycle is.  Lifecycles are literally a measurement of engagement and dis-engagegment between the customer and the business.  The idea was if you could measure these engagement / dis-engagement cycles, you could tell when things were going well or poorly between the customer and the business, then proactively take action to correct problems and issues.  Further, if you got very good at recognizing these cycles and patterns, you could actually anticipate / predict problems and take corrective action before the customer had a negative experience.

So it’s 1993, and I’m sitting in the middle of the greatest interactive experiment to date on the consumer side – Home Shopping Network.  And I’m thinking, if this Relationship Marketing Strategy works so well in B2B, why wouldn’t it work for B2C?  The data will be different, the metrics different, the trigger behaviors different, the Tactics different, but the Strategy, the Relationship Marketing Strategy – wouldn’t that work?  Particularly when we’re so interactive with the customer?  Shouldn’t it work even better when there is direct and sustained interactivity with the customer?

You wouldn’t believe how well it worked, at many different levels of the company.  Customer Marketing programs with unimaginable response rates.  90-day ROMI numbers of 400% or better on a consistent and sustained basis – using offline marketing.  That’s how well it worked.  The magic of using Control Groups to measure campaign profitability allowed us to capture every bit of incremental profit that was derived from re-engaging the customer – even if they didn’t respond directly through the campaign itself, but through another channel.

So, these conversations about customer-centricity, relevance, and engagement have been taking place for over 20 years in Marketing Strategy.  The challenge with this model – and probably why it isn’t more widely known – has been the data, it’s a very analysis-intensive model, as you might expect.

In B2B, McKenna’s ideas grew into what is now known as Contact Management or Sales Force Automation.  On the B2C side, I guess CRM was supposed to be the ticket, but somehow (until recently) these folks forgot about how critical the analytical part of the equation was to the success of the Relationship Marketing concept.

As far as online goes, we have the data,  but until fairly recently the online space has been so all about Brand and Advertising, not Relationships.  Now the Web has decided it will be all about Relationships, which is very cool.  The web is perfect for that approach, (um, can you say interactivity?) and it’s perfect for a Relationship Marketing Strategy.

I’ll get into the Implementation of a Relationship Marketing strategy tomorrow in the next post.