Satisfaction has long been considered the cornerstone for evaluating the strength of a company's relationship with its customers. After all, a satisfied customer should have no incentive to take their business elsewhere, right?
But what do we mean by satisfaction? Is it the process by which we meet a need or the effect of satiation that follows? This distinction can mean a world of difference. Engagement -- that is, attracting and engrossing customers -- is the measure that will determine the true value of a customer relationship.
Dunkin Donuts vs. Starbucks
Sociologists tell us that many of our buying decisions are dictated by our "taste culture." It is our taste -- as a distillation of our self-image, social interactions, and past experiences -- that can be engaged. Here's an example: Dunkin Donuts and Starbucks both sell coffee, but their approaches are not the same.
Dunkin Donuts stores are brightly lit with limited seating. The philosophy is all about satisfaction and speed-- fulfilling the customer need (for caffeine) as quickly and conveniently as possible. Dunkin Donuts says, "Use our product to fuel your daily life." Look no further than their latest ad campaign -- "America Runs on Dunkin" -- for confirmation. Count how many times you see the inside of a Dunkin Donuts in their commercials. The product is important; the venue is not.
By contrast, Starbucks has laid-back music, comfortable couches and dim lighting. The venue is an immersive experience in itself. Starbucks is all about engagement: baristas call customers by name to retrieve their fully-customized drinks (which they have requested according to a special lexicon, and for which they must wait amid an array of artfully strewn merchandise). Even the cups themselves -- featuring conversation-starting quips -- speak to a certain taste culture. The message: Come feed your caffeine habit, but also sit, relax, work, chat, browse. The Starbucks goal is to build a long term relationship with its customers resulting from the experience of spending time (and money) at the store.
Why customer engagement is important
It's easy to see the difference in approaches, but it doesn't tell us why engagement is more important than satisfaction. After all, Dunkin Donuts is extremely successful.
The answer lies in how we see the customer relationship. Satisfaction tells you whether or not you're doing something wrong. It should be the baseline target, not an end in itself.
Engagement, because it comprises a deeper, more persistent relationship, should be the aspirational goal.
Here then are five reasons why measuring engagement is more valuable:
1. Satisfaction is a measurement of past experience, not an indicator of future behavior.
Just because a customer hasn't had a reason to complain doesn't mean the relationship will weather a bad experience in the future or a competitor's enticement. Verizon, AT&T, and BellSouth are likely discovering this now as many formerly satisfied customers begin switching to Qwest, the one company of the four that reportedly did not provide customer phone records to the government.
2. Extremely satisfied customers often act and behave no differently than less satisfied customers.
Researchers at the Gallup Organization have found that extremely satisfied customers of a leading supermarket chain, on average, spend no more than less satisfied customers. It is only when a customer is both extremely satisfied and emotionally attached that purchasing behaviors shift.
3. Engaged customers become the medium for the message.
These passionate advocates actively promote your brand and products through viral and word of mouth marketing, often without realizing they're doing it. Witness the Cult of Mac, whose members embrace a lifestyle and believe they share a common set of values while trumpeting the virtues of the Mac over the PC.
4. Negative engagement can hurt you more than you know.
Look no further than Sony BMG's recent spyware troubles, started by a groundswell within an engaged blogosphere. Never mind the consumer boycotts and class action lawsuit, more telling is the fact that a Google Blog Search for "Sony + spyware" returned nearly 35,000 blog posts. That's the online equivalent of a billboard-sized "Beware of Dog" sign.
5. Engaged customers add more to the bottom line.
Customer Management reports, "Gallup's research suggests that for all kinds of companies, fully engaged customers -- those who score in roughly the upper 15-20 percent on Gallup's measure of emotional engagement -- deliver a 23 percent premium over the average customer in terms of share of wallet, profitability, revenue and relationship growth."
We are in the nascent stages of the triumph of customer engagement over satisfaction. An early innovator is LEGO's LEGO Factory, which lets customers design custom models, share them within the community, and then order those specific parts for delivery.
I predict an increasing number of companies will follow suit and begin to generate engagement by tapping into the social and technological capabilities of the internet to empower customers.