Customer engagement is always important, which is why we write about it all the time. And while a recession doesn’t increase the importance of customer engagement, it certainly underscores it.
In an economic boom, companies have some customer engagement cushion, meaning: even customers who aren’t completely engaged will keep paying the bills when things are good. But when times get tough, and budgets get cut, only companies with strong customer engagement will keep their accounts, protect their revenue, and possibly even find ways to grow.
In this post we’ll look at indicators and benefits of customer engagement, and hopefully convince you there’s never been a better time to double down on your existing relationships.
Defining Customer Engagement
Customer engagement deals with the emotional connection between your customer and your company and therefore looks different across different industries. For example, a retail brand is not going to define or measure customer engagement the same way a creative services consulting firm might. However, sifting through the many definitions of customer engagement will highlight 3 common, crucial elements:
- Customer engagement is rooted in ongoing, 2-way communication between a customer and your company
- Customer engagement creates a dynamic relationship that leads to real resilience
- Customer engagement can be measured against stated goals
At Kapta, when we distill and simplify those key elements, we say: Customer engagement is a resilient, strategic partnership in which both parties succeed.
At the end of the day, customer engagement is better demonstrated than defined. So let’s take a look at practical indicators of customer engagement.
Indicators of Customer Engagement
One way we help our own customers understand the strength of their customer engagement is by asking a short list of questions, each designed as an indicator of customer engagement.
- Do your customers reach out to you? Engaged customers will reach out anytime they face an issue or opportunity. If you find you are always the one initiating contact, you may need to work on customer engagement.
- Do you understand your customer’s big picture business goals? Understanding what your customer is trying to achieve at the company level—not just with the individual product or service you provide—means you’ve asked the right questions, and earned enough trust to get the right answers. That’s how you graduate from vendor to strategic partner, strengthening your position and delivering great work.
- Is your customer engaging with vendors who offer similar or complementary products and services? Even if they aren’t actively looking to replace you in your specific capacity, this is a bad sign. It indicates they aren’t aware of everything you could be doing for them, or that you haven’t demonstrated enough value to get the attention of other teams or functions in the organization. Which means you’re missing opportunities for organic growth and leaving yourself open to competitive threats.
- Do your growth goals reflect what’s possible for key accounts? In a customer engagement model, your own growth goals should reflect what’s reasonable in the context of your customers, rather than imposing your company’s own goals onto customers who may or may not be able to support them. When you’re truly engaged with your customer, you have a detailed sense of how much room they have to grow with your suite of products and services, and you can plan your own growth accordingly.
- Are you experiencing high customer churn? This is a no-brainer. If you’re losing customers left and right, they aren’t engaged with you. Of course, by the time this is happening, it’s pretty late in the game.
In summary, the questions we ask are designed to give you a sense of the strength of your customer engagement. If your client is reaching out to you regularly; if they call you when they’re facing an issue or opportunity; if they share with you the bigger context for what they’re doing; if you are confident in their satisfaction and your future with them, and if you’ve built your own sales goals accordingly, then you are doing customer engagement right.
Benefits of Customer Engagement
Let’s take those indicators and spell out the benefits of customer engagement in a recession. First, we’ll state the cold, hard facts: It’s a bad time to pursue new business. Cold calls are always a little awkward—they’re especially painful now. Even pursuing new opportunities with existing customers is a delicate proposition during a major crisis.
Here’s how real customer engagement helps you through a recession.
- Your customers reach out to you. Your customers are facing unprecedented challenges. If, time and time again, you’ve shown them that you’re here to help, they will actively seek your help navigating this crisis.
- You understand your customer’s big picture business goals. The more you already know about your client’s organization, structure, objectives, strengths, weaknesses, and more, the more you understand how this recession has affected them, and how they may need to change course. Armed with this insight, you can adjust your conversations accordingly, and ensure you’re a contributing strategic ally, rather than a tone-deaf vendor who’s really only adding stress to a stressful situation.
- Your customer engages with you across multiple teams and functions. The more you’re horizontally embedded in your client’s organizations, the less you need to worry about direct competitive threats. Recessions are a risky time for bidding wars—competitors might be willing to slash their prices to make their numbers. But if you’re deeply embedded in your client’s organization, the effort it would take to switch horses midstream won’t be worth even the most aggressive price gouging.
- Your growth goals reflect what’s possible for key accounts. The more your own growth goals were already grounded in what your customers could support, the less blindsided you’ll be by the recession. Sure, it might not be your biggest year. But if you were starting from a reasonable projection, rather than an inflated one, you’ll be much closer to your forecast and much better equipped to plan around the dip.
- Your customers stick with you. This is a no-brainer. If your customers were always on the brink of churn, they’ve probably already left—or they’re about to, as the recession continues. If your relationships are strong, they have a much better chance of weathering the storm.
Building Customer Engagement
So how do you get there? At Kapta, we believe customer engagement is the end product of a customer-first culture and process, executed by a dedicated team of account or client service professionals.
Let’s pick that apart for just a second. First, you need intention: A company-wide culture and a set of internal processes that puts customers first. This has to happen at the company level, because it has to be reflected in every function at your organization. It affects who you hire, how you train, how you measure performance, what products and services you offer, how you plan for growth, and more. The companies with the highest level of customer engagement are those that prioritize their customers, full stop.
A recession is in some ways the perfect time to make cultural shifts. But if that’s too daunting a task for right now, start by focusing all your energy on existing accounts—understanding how the crisis has affected them, and how you can help them get through.
You also need infrastructure: both people and technology. Customer engagement demands team of professionals dedicated to building and strengthening client relationships. If you’re not in a position to hire, start by ensuring your existing teams understand the importance of building customer engagement.
And set them up for success with a purpose-driven process and platform to support customer engagement. CRM and sales tools cannot do this for you. Neither can an ad-hoc collection of various communication, presentation, project management, and billing tools. We’ve written in detail before about how sales differs from Key Account Management, and why you need purpose-built tools for each. We’ll simply recap here that CRM tools are excellent for generating new leads or managing a high volume of low-touch customers, but they don’t provide the framework and visibility you need to build an ongoing, highly strategic relationship with any given, high-value client.
Kapta: Your Customer Engagement Platform
Hopefully by now the benefits of Customer Engagement are pretty clear. Customer Engagement creates lasting, loyal, strategic partnerships that help protect your existing revenue—and even drive growth—in a recession. Customer Engagement also helps position you as an indispensable strategic partner, vs a pesky salesperson trying to save themselves in a difficult time.
Kapta can help you get there. If you want to start light, download our KAM To Go framework to ground yourself in Our KAM Process. Then get in touch to see how we can help you double down on your existing revenue—and weather this storm with your clients.