“Customer engagement” is a term that has seen increased usage in recent years, particularly in the world of customer relationship management (CRM) software. Because the concept of customer engagement is directly tied to the functionality of CRM, the terms are sometimes used interchangeably.
However, some CRM software vendors are now providing solutions with a direct focus on customer engagement—designed to foster better connections with customers and add an interactive, dynamic element to what has traditionally been a one-sided relationship. Because this shift can be confusing, we’ve developed this buyer’s guide to help prospective customer engagement buyers navigate the market.
Here’s what we’ll cover:
What Is Customer Engagement Software?
Customer Engagement and Key Business Outcomes
Benefits of Customer Engagement Software
Common Customer Engagement Software Features
Pricing: Web-Based vs. On-Premise
The emergence of customer engagement platforms marks a shift in the larger CRM market, as mobile and social media have created a wider space in which businesses and consumers can interact.
Whereas traditional CRM products have been rooted in information-gathering and the storage of basic customer data, engagement platforms change this one-sided relationship into an interaction, automating processes that involve customer participation.
Some vendors offer solutions that provide sales and support automation for issue resolution across social channels. For example, some systems integrate customer complaints on Twitter into an overall profile, allowing support agents to gain a wider view of the conversation with that customer.
Other vendors offer marketing automation systems that can adapt along with current or prospective customers—for example, by automatically updating customer segments as their behaviors and demographics change.
Customer engagement platforms encompass a variety of applications and, depending on the product being offered, can include considerably different features. But the common thread tying all customer engagement solutions together is an emphasis on personalizing interactions throughout the entire customer lifecycle.
According to Paul Greenberg, a respected author and CRM thought leader: “When it comes down to it, most of the [vendors] in this market may call themselves customer engagement companies, but [they] don't compete with each other because their products are so different … There is no definition to this emerging market yet.”
People make purchase decisions based on a variety of factors. Some are strictly rational (I need this item and this price is acceptable), while others are entirely emotional (I love this store so I should buy something!). Although it’s a fluid mix that varies between individuals, time and place, researchers in the field of behavioral economics have identified a few general trends that are almost always true.
For starters, highly engaged customers (i.e., those who speak highly of a company because they feel it’s trustworthy and cares about their specific needs) spend more and are more loyal. This is true in both good and bad economic times, as well as across different cultures and industries.
For example, researchers at Gallup report these industry-specific findings:
These numbers alone should make any business decision-maker pay attention. But in addition to these bottom-line business benefits, there are additional organizational and workflow efficiency benefits to be had when a company uses a customer engagement platform to improve engagement.
Because customer engagement products are so diverse in the range of features offered, they also bring with them a diverse array of benefits for different types of software users. These include:
Again, because customer engagement solutions are evolving, there is no uniform definition for the features a given product will include. However, a number of solutions currently packaged as customer engagement platforms do offer some of the following features:
|Web self-service||Allows customers to resolve problems and answer their own questions online, without assistance from support representatives. Can reduce assisted interaction time without compromising the customer experience. (In fact, Web self-service may increase satisfaction, as it can reduce issue resolution time and empower the customer to search for and retrieve exactly what they want.)|
|Multichannel customer support||Integrates customer service and support interactions across different communication channels, particularly social media. Platforms that provide a view into all types of customer interactions at once—as opposed to email or phone interactions alone—allow support reps to easily communicate with customers in whatever way is most effective.|
|Social media management||Creates uniform social media messaging, communications and strategy across a company. This may include social content creation and social media analytics capabilities. Whereas traditional CRM platforms have treated social media as a separate category from a company’s more traditional communication channels, customer engagement platforms tie social into the overall business model.|
|Customer engagement analytics||Analyzes past and current customer sentiment and satisfaction data, to assist with decision-making around future customer behavior. Similar to the customer analytics features included in some traditional marketing software solutions.|
|Content personalization||May include interactive tools that tailor content towards individual customers (as opposed to “one-size-fits-all” content creation). May also include content-monitoring capabilities, to ensure that no duplicates are sent to the same customer and that customers are only getting the number of communications that they’ve indicated they want.|
Pricing for these solutions is dependent on the deployment model, the number of users who need to access the software and the degree of functionality required. Deployment models include:
Web-based, or “Software-as-a-Service (SaaS).” This software is hosted in the cloud, on servers managed by the software vendor, and can be accessed by any user with an Internet connection. It is priced on either a monthly or an annual subscription fee, based on the number of users who will require access to the software. This is the most popular deployment model in the CRM and customer engagement platform markets.
On-premise. This software is hosted locally, on the buyer’s own servers. Buyers must purchase a perpetual license up front for ongoing use of the software; there is no additional subscription fee. However, users might see additional fees for upgrades, customizations or maintenance. While on-premise customer engagement platforms are not a common option, they may be the right fit for certain businesses (especially those that focus on data analytics).
Customer engagement platform pricing generally increases along with the breadth and depth of functionality the system offers. Packages on the higher end of the pricing spectrum tend to include more robust functionality, while those on the lower end more often include less functionality.
Whichever deployment model you choose, one basic rule applies: the greater the functionality of your customer engagement solution, the higher the price will be.
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