From TheFutureOf (19 Aug 08): Responding to Jim Novo's 19 July 08 9:33am comment

Jim Novo's Comment

Joseph G: “Engaged, positive experience, and no positive ‘time since’ value”

Re: Nordic Track site, yes, you were engaged, and that's my point. I don't really have any reason to spend marketing budget on you. What (as a Marketer) I really want to know is this: for each incremental marketing dollar I am spending on customer marketing, how can I allocate towards customers with the highest Potential?

You're no longer engaged, and so not worth spending additional marketing budget on. Hopefully the experience has been positive, the product meets expectations, and when you are ready, you will buy another piece of equipment. But as a Marketer, there's not much I can do proactively, because you were Engaged, and not Engaged now. I can only create incremental profits from those that still are Engaged at some level.

Which is why Marketers need a metric to determine where the customer is in the process of dis-Engagement. “Time since” is no doubt a proxy for something more accurate, but it's a heck of a reliable one! At some point, the process of dis-Engagement gets along too far, and you are lost. I have suggested elsewhere this point on Joseph's model is “0” acceptance, which is where I think the theoretical and practical models may intersect.

This whole engagement discussion is remarkably similar to the “customer defection” discussion that has been taking place offline for years:

When is a customer no longer a customer? At what point is the customer “lost”?

What behavior – or lack of behavior – indicates a customer has defected and is no longer worth spending on because they will never respond? When do you stop spending and just “hope” they will come back at some point in the future?

Businesses have a very difficult time letting go of customers, declaring them “lost”. Online, this is evident in continuing to e-mail “customers” who have not even opened an e-mail for 2 years. I'm pretty sure a “no open for 2 years” customer is “dis-Engaged”.

Offline, I ask, If you have had no contact with or from a customer in 3 years, are they still a customer? Most answer yes. OK, If you have had no contact with or from a customer in 5 years, are they still a customer? Many answer yes. How about no contact in 10 years? 20 years? When is a customer no longer a customer, when have they “dis-Engaged?”

At some point way before the 20 year mark would be my answer, and understanding / acting on that process of dis-Engagement – which happens much, much more quickly online than offline – is the key to addressing the root causes of dis-Engagement (Marketing, Product, Service) before they manifest as a lost customer.

In sum, there is much more power from a Marketing perspective in understanding the dis-Engagement process than “Engagement”.

When everyone figures out what “Engagement” means for them I will then ask, for each customer, how long has it been since the customer was Engaged? The answer to that question generates the most optimal marketing approach to that customer, including none at all.

My Response

Howdy,

Okay, at least I'm within that “month to respond window” I mentioned earlier.

I love the question you pose at the top of your comment, Can you be “Engaged” and no longer be a customer? That's brilliant (truly, no sarcasm implied or intended. The question of proper identification gets to the heart of much of these discussions, me thinks). Tell me what a “customer” is and I'll give you my best shot at an answer.

I would agree that Dr. Geertz was engaged when on the NordickTrack site, both as NextStage defines engagement and for at least that one visit in which the purchase occurred.

I also recognize that a single web visit's engagement (as NextStage defines the term) will leave a psycho-cognitive trail. It will probably (an opinion) be non-conscious unless it was an extreme experience.

Extreme experience? Yes, and forgive me for quoting from Reading Virtual Minds, Chapter 6 “Expectation Versus Satisfaction” (something which also plays into my The Money Is Where Engagement Meets Satisfaction Online, From TheFutureOf (16 Jul 08): Responses to Geertz, Papadakis and others, 5 Feb 08 and From TheFutureOf (10 Jul 08): Back into the fray posts):

What I've often pointed out to people is that they can remember the best restaurant meal they ever had and they can remember the worst, but how many of the mediocre meals can you remember? You want your material to engender moderately extreme reactions because — whether good or bad — extreme reactions are remembered, which equates to being branded. Mediocre reactions don't get locked into an individual's memory and, in the case of websites and promotional materials, are soon forgotten.

So your question causes me to wonder if there's a way to re-activate positive engagement once a person is no longer a “customer” (one of the reasons I encourage clients to create multi-channel plans).

“Time since” and “customer defection”. Hmm…

Allow me to propose (what is to me) an interesting experiment: NextStage's technology can determine how people will react/respond in the future. I think and am not sure that it could determine that someone was starting the psychological process of “defecting”. We already do something very close with our Loyalty and Visitor Return Ratio reports.

And of course, I'll need to explain how we define Loyalty and Visitor Return Ratios.

Loyalty is the amount of pain an individual is willing to endure to either be with or to use something when they know less pain would be involved either being with or using something else. Visitor Return Ratios determine how strongly your site influenced a visitor to return. A strong enough negative experience will cause visitors to stay away, a strong enough positive experience will cause visitors to return, tell their friends and spend money — whether or not they found what they originally came to your site for.

There could be — dear god, do I dare call it — an uber-metric that is a mathematical union of what these two reports are actually measuring. I admit I haven't looked at the math behind these two reports in several years (we've been using them since 2001-2002) and I do know they measure activity in the same brain foci.

Thus, being able to determine that someone was demonstrating nascent defection phenomenology, an intervention could be executed that would insure engagement (as I think you define it). We already address recognizing what visitors are worth investing time and money on with our Tirekickers to Buyers Breakdown report, so I think that aspect of your post — “What behavior – or lack of behavior – indicates a customer has defected and is no longer worth spending on because they will never respond? When do you stop spending and just 'hope' they will come back at some point in the future?” — is covered.

Let me know if this is of interest (call, Skype or email me. If you respond in this blog I won't see it for another month).

You also want to know “…how long has it been since the customer was Engaged?”

Excellent question. What's the threshold at which it is decided a customer is engaged? This question is relevant to NextStage's analytics and think an extension of the concept is relevant to this discussion. We recognize that someone is engaged and the level of their engagement on a visit by visit basis. Thus we know various measurements involving session-length engagement (what's the average level of engagement on a page/site/for a video/flash/…? At what point does the average visitor get engaged? What is/are the triggering event (“event” in NextStage terms) that causes engagement? …).

This is a rich field of study for us as it helps us determine when sites need to be redesigned, modified, how often content needs to be changed, so on and so forth. The reason I believe this extension is relevant is because (and this may speak to Dr. Geertz's example) once the average visitor's engagement with a site/page goes below a threshold level it is unlikely they'll return (Loyalty and Visitor Return Ratio) regardless of whether or not they achieved a specific visit's goal (purchasing some exercise equipment).

Hopefully this makes sense. Wonderful questions, these.

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