As a board member, your job is to maximize shareholder value. You work hard to get the best CEO, ensure she hires the best leaders for the company, orient the strategy to the best markets, capitalize the business appropriately and try to identify strategic risks. If things go well (and you’re lucky), growth plans are on track and the future is bright. Unfortunately, competition gets fiercer and your pricing power declines and your offerings become commoditized as your customers find different alternatives. Competitors that companies did not previously perceive as threats have suddenly developed capabilities to engage customers with valuable data and services. Consequently, companies with the best engagement strategies will win and keep more customers. In the case of one Summa client, investment in a mobile engagement app for their users - and the resulting high adoption rate by users - created the opportunity for a strategic acquisition by a much larger competitor.
In the fight to stay ahead of the pack, don’t ignore the power of highly engaged customers. They buy 30% more than the average customer. Done well, customer engagement drives faster revenue growth, higher margins and less churn – three of the most important performance metrics in shareholder value.
What does an engaged customer look like? Because engagement is measured through actual behavior relevant to the brand, we can see them clearly in our big data. The most engaged trust you, send you referrals, advocate for you on social media and even participate in advisory boards. It’s most critical to engage those that are individualistic, opinionated and prone to lots of sharing across the broad array of social and mobile technology. The challenge is to figure out what they need and what innovations you have to come up with to deliver it. With the key areas of value uncovered, you then have the opportunity to delight them by solving their biggest issues.
Board members need to be sure their companies are engaging customers aggressively and not losing market share to more advanced competitors. With a savvy board, management may well be ahead of the curve already and poised to deliver strong returns to shareholders. Companies that do this best engage customers starting as prospects, through customer acquisition and onboarding, continuously as customers use the product and, perhaps most importantly, to define their future growth strategies. To find out how the companies you’re involved with measure up, ask management:
- Do we effectively gather and analyze customer input across our organization?
- Do we take customer input as a priority in our planning?
- Which recent strategic initiatives undertaken by the company were the result of customer input?
- How many members of the board have experienced the company's customer's buying process?
Summa has helped dozens of companies find the best ways to engage their customers. From creating compelling mobile experiences to intuitive interfaces to crafting the software customers use most, Summa’s design-led approach results in solutions that help you engage customers as effectively as possible. Companies leading the way in engaging customers will continue to pull away from their competitors in the years to come. Technology is enabling an expanding array of communication tools that will continue to bring competitive advantage to those companies that deploy it for years to come. To maximize shareholder value, boards need to be sure they are not losing ground to others simply because of weak engagement with their customers.
