In a nutshell
Understanding the engagement of your customer base is an important element of your Marketing Strategy. While multiple metrics have been defined for measuring this engagement, the Net Promoter Score has been used widely as the standard for customer engagement. The seminal question “Would you recommend it ?” has been asked to probably millions of clients/customers across the world . Agreeing or Disagreeing on the metric is not relevant. What is relevant is to accept that customers engaged positively with your brand and your services will help you achieving your objective while others negatively engaged will play against your objectives. Do you know it? Do you take this into account in your strategy?
Engagement is a holistic characterization of a consumer's behavior, encompassing a host of sub-aspects of behaviour such as loyalty, satisfaction, involvement, Word of Mouth advertising, complaining and more.
Satisfaction: Satisfaction is simply the foundation, and the minimum requirement, for a continuing relationship with customers. Engagement extends beyond mere satisfaction.
Loyalty - Retention: Highly engaged consumers are more loyal. Increasing the engagement of target customers increases the rate of customer retention.
Word of Mouth advertising - advocacy: Highly engaged customers are more likely to engage in free (for the company), credible (for their audience) Word of Mouth advertising. This can drive new customer acquisition and can have viral effects.
Awareness - Effectiveness of communications: When customers are exposed to communication from a company that they are highly engaged with, they tend to actively elaborate on its central idea. This brings about high degrees of central processing and recall.
Filtering: Consumers filter, categorize and rate the market from head to tail, creating multiple, overlapping folksonomies through tagging, reviewing, rating and recommending.
Complaint-behaviour: Highly engaged customers are less likely to complain to other current or potential customers, but will address the company directly instead.
Marketing intelligence: Highly engaged customers can give valuable recommendations for improving the quality of the offering.
In the Marketing Canvas
In the Marketing Canvas, we have identified 6 main categories for building your Marketing Strategy: CUSTOMERS, BRAND, VALUE PROPOSITION, JOURNEY, CONVERSATION and METRICS. Each of these categories, have 4 dimensions which means that a total of 24 dimensions (6 by 4) are defining your Marketing Strategy.
ENGAGEMENT is a one of the 4 dimensions of the CUSTOMERS category.
How to use it?
When building your Marketing Strategy, you should know whether you understand (or not) the engagement of your customers. I am personally using NPS for explaining how to use ENGAGEMENT in the method (you can adapt this with the metric of your choice ).
Following NPS methodology, you could have 3 different kinds of customers: Promoters, Passives or Detractors. Promoters are in your favour, they love you. Detractors are against you (at least at the moment of the survey), they play against you. Passives are neutral.
You should also compare your NPS with the NPS of your competitors as it will tell you the difference of engagement between your customer base and the customers of your competitors (you can do that by commissioning a NPS study on the competition customer base or on the global market).
Having done this, you could have the following situation:
I don’t have a NPS alike methodology and thus I don’t know how much my users are engaged. It is a Brake as you don’t know how to change or leverage your users’ base.
I have a NPS alike methodology and a NPS score above market average. My users are more engaged or promoting than the users of my competitors it is an Accelerator as my users base might buy more, recommend more and complain less.
I have a NPS alike methodology and a NPS score below market average. My users are less engaged or promoting than the users of my competitors it is an Brake as my users base might buy less, recommend less and complain more.
Harvard Business Review, 2003, https://hbr.org/2003/12/the-one-number-you-need-to-grow
Moving Beyond NPS, Medium, https://link.medium.com/OHO1Mz6IGY