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News Release from: Economist Intelligence Unit
Edited by the Manufacturingtalk Editorial
Team on 30 March 2007
Engaging customers gives competitive
advantage
Instead of only relying on customers' loyalty, to achieve business success companies must engage customers by establishing a deep connection that endures over time.
Companies have always tried to cultivate customer loyalty, but they can no longer do so just on the basis of quality or price Instead, they must engage customers by establishing a deep connection that endures over time
This article was originally published on Manufacturingtalk on 30 Mar 2006 at 8.00am (UK)
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The report, published in two parts, is based on a worldwide survey of 311 senior executives conducted by the EIU for Adobe Systems.
Although most respondents realise the importance of customer engagement, few believe that their companies are doing it effectively.
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More than eight in 10 executives believe their companies lose sales each year because of failure to create engaged customers, and one in 10 estimates insufficient engagement accounts for 50% to 75% of lost sales.
Only 13% of respondents believe their customers are very committed to their company's products, but the majority of executives believe that earning such a commitment is essential to the success of their business.
More customer engagement, they believe, would translate into improved customer loyalty (80%), increased revenue (76%) and increased profits (75%).
"Executives are increasingly finding that the winning differentiator is no longer product or price, but the level of customer engagement relative to the competition," said Rama Ramaswami, the editor of the report.
"Companies see that there is a competitive advantage in going beyond traditional customer loyalty programmes to create engaged customers." Other key findings of the report include the following * Engaged customers offer a company important benefits.
Seventy-nine percent of executives surveyed say that engaged customers are very important because they recommend products and services to others; 64% say they are frequent purchasers; 61% say they provide frequent feedback on products and services; and 55% believe they are less price-sensitive.
* Technology is seen as providing important tools for building engagement.
Most respondents identify technology, such as electronic forms, Web sites and multimedia technologies, as important tools for creating engagement and believe that they will be even more important within the next five years.
* Measurement is a major challenge in implementing engagement initiatives.
In spite of executives' enthusiasm for creating customer engagement, 47% say that the difficulty of measuring customer engagement is the biggest barrier to achieving greater levels of engagement.
"This survey reinforces what we have believed for a long time-the secret to success isn't just about gathering or churning data, it's about how you connect with customers through the medium of their choice," said Adobe CEO Bruce Chizen.
"Customers now demand information and interaction anytime, anywhere and through any medium." He added that engagement-enhancement solutions are available that not only enable companies to create, manage and deliver information more powerfully, but also help them forge strong connections with their customers.
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