marketings_new_key_metric_engagement
August 8, 2007
Marketing’s New Key Metric: Engagement
by Brian Haven
for Marketing Leadership Professionals
? 2007, Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, and Total Economic Impact are
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usage information, go to https://www.wendangku.net/doc/e918725120.html,. Information is based on best available resources. Opinions re?ect judgment at the time and are
For Marketing Leadership Professionals
TABLE OF CONTENTS
Does The Marketing Funnel Need An
Upgrade?
Engagement: A New Perspective On
Marketing
The Elements Of Engagement
Making Sense Of Engagement
Putting It All Together
Engagement Enhances Customer Insight
WHAT IT MEANS Engagement Redirects The Marketing Trajectory NOTES & RESOURCES Forrester interviewed 20 vendor and user companies, including: Avenue A | Razor?sh, Bazaarvoice, Biz360, BrandIntel, BzzAgent, TNS Media Intelligence/Cymfony, Digitas, The Drilling Down Project, DuPont, LeapFrog, Loyalty Builders, MotiveQuest, Nike, Organic, Procter & Gamble, Publicis & Hal Riney, Reed Business, UGENmedia, Umbria, and Visible Technologies.
Related Research Documents “The Enterprise Marketing Software Landscape”May 7, 2007
“The Forrester Wave?: Brand Monitoring,
Q3 2006”
September 13, 2006
“Five Tips For Web Analytics Success”
June 2, 2006
August 8, 2007Marketing’s New Key Metric: Engagement
Marketers Must Measure Involvement, Interaction, Intimacy, And In?uence
by Brian Haven
with Josh Berno? and Sarah Glass 2412
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DOES THE MARKETING FUNNEL NEED AN UPGRADE?
Traditionally, marketers modeled consumers’ decisions as they progressed from awareness through consideration, preference, action, and loyalty — through what is called the marketing funnel (see
Figure 1-1). The marketer’s job was to move people from the large end down to the small end. But now it’s time for a rethink, as the funnel has outlived its usefulness as a metaphor. Face it: Marketers no longer dictate the path people take, nor do they lead the dialogue. We must rethink the
marketing funnel because:
· Complexity reigns in the middle of the funnel. Awareness is still important; you need to
know that a product or service exists in order to buy it. And the marketer’s endpoint is still a
transaction. But, in between, other factors such as recommendations from friends or family,
product reviews, and competitive alternatives described by peers in?uence individuals. The
funnel’s consideration, preference, and action stages ignore these forces that marketers don’t
control. Rather than a clean linear path, the real process looks more like a complex network
of detours, back alleys, alternate entry and exit points, external in?uences, and alternative
resources (see Figure 1-2).
· The most valuable customer isn’t necessarily someone who buys a lot. In this socially charged
era in which peers in?uence each other as much as companies do, good customers can’t be
identi?ed solely by their purchases.1 Companies also need to track individuals who in?uence
others to buy. For example, a customer who buys very little from you but always rates and
reviews what she buys can be just as valuable as someone who buys a lot — her reviews might
in?uence 100 other people to buy your product. Tracking only transactions and loyalty at the
end of the funnel misses this signi?cant element of in?uence.
· Traditional media channels are weakening. Marketers continue to use mainstream media
messages to move consumers into a consideration frame of mind. But passive consumption
of media is waning. Individuals dismiss or ignore marketing messages in lieu of information
available from an ever-increasing number of resources, such as product review sites, message
boards, and online video.2
· Consumers force brand transparency. Marketing and public relations teams used to have the
in?uence to spin a message in their favor when something went wrong. But in these days of
snoring cable technicians caught sleeping on a customer’s couch, captured on video, and posted
on Y ouTube or blogs blasting CompUSA for selling an empty box instead of a camera, spin is
out of control.3 Online social tools, coupled with increasing social behavior online, make it easy
for the truth to come out. When companies try to spin the message now, they get caught in the
act, only making the problem worse.
Marketing’s New Key Metric: Engagement
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Figure 1 The Traditional Marketing Funnel Fails To Model Complex Buying Paths Source: Forrester Research, Inc.42124The traditional marketing funnel
1-1Eyeballs Buyers
Complexity lies at the center of the marketing funnel
1-2from friends
content
Marketing’s New Key Metric: Engagement
For Marketing Leadership Professionals 4· Marketing complexity means that traditional metrics fail to capture the whole story. Online metrics like unique visitors to a Web site, number of pages viewed, and time spent per page
mimic o?ine media metrics of reach and frequency. But these measurements don’t indicate the engagement of an individual; they fail to capture the sentiment, opinion, and a?nity a person has toward a brand as manifested in ratings, reviews, comments in blogs or discussion forums, or likelihood to recommend to a friend.
ENGAGEMENT: A NEW PERSPECTIVE ON MARKETING
If the funnel no longer accurately re?ects what marketers can in?uence, why do they still cling to it? Because they can measure it, which is reassuring, even if it no longer accurately re?ects the real buying process. And, of course, there are no useful alternatives. We believe that marketers need a new
approach to understanding customers and prospects. This new type of measurement — engagement — encompasses the quantitative metrics of site visits and transactions, the qualitative metrics of brand awareness and loyalty, and the fuzzy areas in the middle best characterized by social media. Our de?nition of engagement includes four components (see Figure 2):4
Engagement is the level of involvement, interaction, intimacy, and in?uence an individual has with a brand over time.
Figure 2 The Four Components Of Engagement Source: Forrester Research, Inc.
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The Elements Of Engagement
Engagement goes beyond reach and frequency to measure people’s real feelings about brands. It starts
with their own brand relationship and continues as they extend that relationship to other customers.
As a customer’s participation with a brand deepens from site use and purchases (involvement
and interaction) to a?nity and championing (intimacy and in?uence), measuring and acting
on engagement becomes more critical to understanding customers’ intentions. The four parts of engagement build on each other to make a holistic picture.
· Involvement. This component is the most basic measurement of engagement and re?ects the
measurable aspects of an individual’s relationship with a company or brand. It includes actions
like visits to a site or a physical store, time spent per page, and pages viewed. While this alone
isn’t su?cient, measuring these activities is critical because they are often the ?rst point of
interaction an individual has with a brand and are the foundation for making the connections to
other metrics.5 For example, Reed Business tracks visitors to its Web sites, the time they spend,
the articles they read by category or channel, and pages they view per week (and across other
time periods). This helps Reed Business distinguish between ?rst-time and repeat visitors, and
informs the company of the depth, frequency, and level of interactions of their visits, helping it
determine its content agenda. Y ou can use Web analytics services like Omniture, Web Trends, or
Visual Sciences to measure these activities.6
· Interaction. This component provides the depth that involvement alone lacks by measuring
events in which individuals contribute content about a brand, request additional information,
provide contact information, or purchase a product or service. Where involvement measures
touches, interaction measures actions. These include click-throughs, completed transactions,
blog comments, social network connections, and uploaded photos and videos. Social media
contributions increasingly play a role in calculating the value of a customer and are vital to
tracking emerging behaviors. For example, PETCO tracks when customers browse and sort
by top-rated items and then buy a product, allowing the company to identify the e?ect user-
generated content (UGC) has on purchases. Y ou can use eCommerce platforms to provide
transaction data, while social media platforms like Bazaarvoice and UGENmedia track actions
like ratings and reviews, photos or videos uploaded, or connections made in social networks.
· Intimacy. This component goes beyond interaction to measure the a?ection or sentiment an
individual holds for a brand. This includes her opinion, perspective, or passion for the brand
as represented by the words she uses and the content she creates. Intimacy is the critical new
component that sheds light on customer’s feelings about your brand (positive or negative), and,
with new services, it can be tracked almost in real time, providing ample opportunity to correct
a problem or seize an opportunity before it wanes. For example, Del Monte’s pet food division
used Umbria’s brand monitoring services to track online conversations about how owners
perceive their pets, yielding fascinating di?erences — for example, Gen Y ers think of them as
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accessories, Gen Xers think of them as family and worry about how to ?t them into their busy
schedule, and Boomers consider them people too. Brand monitoring ?rms like TNS Media
Intelligence/Cymfony, MotiveQuest, Biz360, Umbria, and BrandIntel measure sentiment in
online venues, including social networks, discussion forums, blogs, and video-sharing sites.7
· In?uence. This component looks beyond even sentiment to determine an individual’s likelihood
to encourage a fellow customer to consider or buy a brand, product, or service. Qualitatively,
it includes brand awareness, loyalty, and the possibility of purchasing again. It also includes
quantitative metrics like the Net Promoter (NP) score, measuring a person’s likelihood to
make a recommendation to a friend.8 Understanding your customer’s intention to return,
repurchase, or recommend is critical to building a forward-looking pro?le of your customer.
For example, BrandIntel tracked sentiment about the ?lm Snakes On A Plane and TV series
Heroes. Eighty percent of the conversation about Snakes On A Plane focused on the hype of
the ?lm and Samuel L. Jackson the actor, not his character, while Heroes conversations were all
about the characters and the premise of the show. This is why Heroes is a hit and Snakes was a
?op; BrandIntel’s studies show that people aren’t really engaged unless they’re talking about plot
and characters rather than hype and actors. Y ou can measure in?uence through opt-in surveys,
mailed questionnaires, or customer service calls and phone surveys.
Making Sense Of Engagement
With a new set of components — involvement, interaction, intimacy, and in?uence — companies
can integrate data from many sources to build the engagement pro?le, an aggregate description of the types and levels of engagement your customers exhibit. But with all this new data, what metrics matter, and how can you combine them? To understand how engagement a?ects customer value,
consider these three customer scenarios that re?ect di?erent customers and how they approach one brand, an online retailer:
· Charlie: passive participant. Charlie’s just not that into you. Y ou see him on your site as an
occasional visitor who does not recommend the brand and reads the company blog about
gadgets but does not comment. Still, his behaviors on the site liken him to people who tend to
have a favorable sentiment about the products they’re researching (see Figure 3). Since Charlie
isn’t a registered user, you’ll need to track his actions on the site (pages viewed, time spent, etc.)
and measure the sentiment of the occasional anonymous content he contributes (comments,
discussions, etc.) as well as the sentiment on the sites and pages that refer him, tracked through
browser cookies. In your analysis of engagement of visitors like Charlie, you would match their
characteristics to similar users who are registered and, from that, extrapolate their loyalty and
likeliness to recommend.
· Steven: semiactive participant. Steven is ready to be turned on to your brand. He visits the
site in bursts surrounding product purchases, has become loyal, and writes highly in?uential
reviews of the sports equipment products he buys, even though he feels that the product
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Marketing’s New Key Metric: Engagement
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research tools and information are lacking (see Figure 4). For users like Steven, you should
track activities surrounding purchases (before and after) and the time between a transaction
and his review of the product. Measure the sentiment of product reviews, the actions taken after reading unfavorable content, and the in?uence his reviews have on other customers’ purchasing behaviors. Y ou need to ascertain what motivates him to contribute content and try to encourage more of that behavior.
· Sarah: brand zealot. Sarah could turn out to be one of your most valuable customers. She is an
avid fan of the site’s pet accessories, is a highly active visitor who recommends the site to every
pet owner she knows, and actively contributes content to the site’s online community, even
though she sometimes posts negative comments about products after making customer service
calls (see Figure 5). For zealots like Sarah, it’s important to track the quantity and frequency of reviews, pro?le updates, blog posts, forum discussions, and other content contributions. Y ou
should also measure the sentiment of her contributions and use surveys to keep a pulse on her
a?nity for the brand and intent to continue to participate. For some brands, it would make
sense to start a brand ambassador program to draw users like Sarah closer to the company and energize their word-of-mouth.
Marketing’s New Key Metric: Engagement
For Marketing Leadership Professionals 8Figure 3 Passive Participant Source: Forrester Research, Inc.
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Level of intensity from low to high
Marketing’s New Key Metric: Engagement
For Marketing Leadership Professionals 9
Figure 4 Semiactive Participant Source: Forrester Research, Inc.
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Level of intensity from low to high
Marketing’s New Key Metric: Engagement
For Marketing Leadership Professionals 10Figure 5 Brand Zealot Source: Forrester Research, Inc.
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Level of intensity from low to high
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Putting It All Together
Now that you know what information to collect, can we provide you with a formula to measure engagement? Well, no, because it’s di?erent for each company. But you can start by identifying the
key metrics that are useful to you and use them to choose and work with vendors of measurement technology.9 The engagement pro?les you track will be di?erent depending on your marketing strategy. Here are four recipes for measuring engagement, matched to company objectives:
· Your objective is to create awareness. Start as you always have, tracking existing online ads,
promotions, and TV commercials. To this, add tracking content contributed by brand advocates,
such as product reviews or comments in discussion forums. Measure the sentiment of that
UGC, including venues you don’t control such as third-party product review sites. Additionally,
track in?uence through customers’ intent to recommend the product to a friend by conducting
a survey or witnessing actions on peer review sites like Epinions and TripAdvisor.10 A good
example: A large national ?nancial institution used brand monitoring service Biz360 to identify
key message pickup from its Superbowl ad in both traditional and interactive channels, and
used that buzz measurement to evaluate the expenditure.
· Your objective is to drive transactions. Track involvement to identify how people use your
site (page views, navigation paths, etc.) and merge that information with the e?ect UGC has on
others’ purchases. This way you can discover the content and actions that increase a customer’s
likelihood to buy. For example, CompUSA uses Bazaarvoice’s services to provide product
ratings and reviews, then tracks the e?ect reviews have on the buying behavior of readers.
They’ve found that customers acquired via review-related searches convert at a 60% higher rate
than the average customer and spend 50% more per order.
· Your objective is to build brand preference. Track involvement on your own site as well as
referrals from other sites to identify the content people use to make decisions. Understanding
how intimate customers are with your brand and what increases intimacy will establish what
it takes to convince a person to choose you over a competitor. For example, a large auto
manufacturer launched a new SUV, but sentiment in discussion forums (measured using brand
monitoring services) indicated that the o?-road capabilities of the vehicle were not believable.
Then, using imagery of the SUV performing in o?-road conditions, the company was able to
track a change in perception, which resulted in outselling its competitors that quarter.
· Your objective is to increase loyalty. Track recurring purchases, positive commentary, and
intent to recommend. Analyze the characteristics and behaviors of known loyalists to determine
what you should do to motivate potential loyalists to make the leap. Monitor sentiment about
products in forums and in blog comments to track those actions that commonly encourage or
discourage repeat purchase and respond accordingly through incentives, product modi?cations,
or services enhancements. For example, in 2006, Mini Cooper decided to boost its community
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e?orts in a year with no new product announcements to strengthen loyalty and avoid being
seen as a fad. Working with MotiveQuest, it used brand monitoring services and con?rmed
that the emotion expressed by owners in the Mini community set it apart from other vehicles.
In addition, Mini Cooper was able to monitor the results of the brand’s community e?orts and
evolve future communications.
ENGAGEMENT ENHANCES CUSTOMER INSIGHT
Measuring engagement is a new concept, and no measurement vendors provide uni?ed services
to help tie it all together — yet. To get started, you’ll need to take the ?rst steps alone. But starting
small and remaining focused on a few objectives at a time (such as connecting UGC to increased
purchases or linking sentiment to loyalty) allows you to identify the metrics that matter to you most.
Integrate your customer perspective across channels and campaigns by using a variety of online and o?ine metrics, so you can calculate the value of new channels and identify e?cient strategies for
them.11 And consider the payo? of your hard work. Y ou’ll be able to:
· Measure and learn from things you currently ignore. Qualitative metrics like feelings, a?nity,
and sentiment are di?cult to track. And when you can collect the information, it has historically
been complicated or impossible to use with other data. But social media makes it easier for
customers to o?er up their opinion, and, as a result, all that data is sitting out there waiting to be
mined. Companies should track these metrics on a regular basis with brand monitoring services,
partly to get insights that no survey would ever detect, since they come right from the minds
of the customers. For example, a kitchen hardware manufacturer should track commentary in
discussion forums about home renovation to get ideas about product shortcomings, identify
new or improved products, and track impact on actual sales.
· Identify customers who in?uence others to buy. A person who contributes content, such as
a product review or a video of the product in use, may be far more valuable than the average
purchaser.12 As a result, your idea of who you consider a good customer should become
more robust, and you should make tactical o?ers with ?ner control to drive the behavior of
these customers. For example, a sporting goods retailer should identify customers who make
signi?cant product reviews that in?uence others’ purchases, then initiate programs to encourage
those customers to contribute more content.
· Encourage behavior across multiple touchpoints — online and o?ine. The engagement
pro?le crosses channels. Once you establish engagement pro?les based on online data, the
next step is to tie in data from o?ine sources, such as in-store transactions, phone or catalog
orders, and customer service calls. For example, a quick service restaurant should determine
if customers that are heavy users of its in-store loyalty program are more likely to provide
favorable sentiment in online discussion forums or possess an increased likelihood to
recommend the food to a friend.
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· Audience, not product or channel, will de?ne the new marketer. Rather than focus
on areas of expertise aligned with a channel or industry, the marketing organization will
shift to a customer organization. As she focuses on in?uencers and consumer knowledge,
the new marketer will develop a career based on her understanding of, for example,
new moms, young athletes, or women reaching menopause. For example, Alison Zelen,
Consumer & Market Insight manager for Axe Body Spray at Unilever, succeeded based on
her intimate understanding of how young men think, gained partly from watching them in
a Communispace community.13 This is knowledge that transcends the consumer packaged
goods category.
· Engagement will force B2B marketers to take the social media plunge. B2B marketers’
slow adoption of social technologies will be accelerated when community sites emerge
discussing the merits (bene?ts and limitations) of their products and services.14 B2B
marketers will recognize that social media is critical to their business because all of their
customers are online and one unhappy customer can cost them millions of dollars in
business. Imagine this: A new enterprise product from HP, Oracle, or Microsoft fails to deliver
on its promise for a prominent client. The key decision-maker at the client company is an avid
blogger and posts about the poor performance of the product. A groundswell of unhappy
customers develops, and three developing deals fall through as a result, costing the vendor
more than $5 million in potential new business. Events like this will persuade B2B marketers
in a heartbeat to measure engagement.
ENDNOTES
1More than one-quarter of online consumers contribute to discussion boards or submit a rating or review of
a product. See the January 25, 2007, “Leveraging User-Generated Content” report.
2Only 13% of consumers say they buy products because of their ads, and a mere 6% believe that companies
generally tell the truth in ads. See the November 27, 2007, “Consumers Love To Hate Advertising” report.
3The video of the Comcast technician is located at https://www.wendangku.net/doc/e918725120.html,/watch?v=CvVp7b5gzqU. The
blog post about CompUSA’s sale of an empty camera box is located at https://www.wendangku.net/doc/e918725120.html,/
archive/lifeslices-all-sales-?nal-is-not-a-license-for-theft.
4In marketing today, the term engagement has a plethora of de?nitions coming from many di?erent
organizations. For example, the Advertising Research Foundation (ARF) de?nes engagement as: “turning
on a prospect to a brand idea enhanced by the surrounding context.” The Web Analytics Association sticks
to today’s components of measurement (internal search terms, top pages and content requested, customer
retention rate, time for a user to navigate the site, etc.) to help encourage better usability. But we’re arguing
for a more comprehensive de?nition that addresses all of the many touchpoints an individual has with a
brand. The ARF de?nition of engagement can be found at https://www.wendangku.net/doc/e918725120.html,/research/engagement.
html. The Web Analytics Association explanation of measuring engagement is located at http://www.
https://www.wendangku.net/doc/e918725120.html,/en/art/?102.
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5To get the most out of your Web analytics e?orts: 1) connect customer behavior to business results; 2)
present analytics data to business owners regularly; 3) assign a single owner to each metric; 4) create rapid response plans; and 5) add sta? to accelerate ROI. See the June 2, 2006, “Five Tips For Web Analytics Success” report.
6Based on our analysis, four vendors rose to the top of our evaluation: WebTrends for its strengthening
product line, ?exible deployment, and global presence; Omniture because of its all-around solid product
and training o?erings; Visual Sciences for its market-leading technology; and Coremetrics for its
respectable product coupled with the market’s best customer service. See the January 13, 2006, “The
Forrester Wave?: Web Analytics, Q1 2006” report.
7As consumers usurp control from companies, marketers are forced to listen more, shout less, and interact
on a regular basis. Brand monitoring services have emerged to speci?cally focus on helping ?rms listen. See
the September 13, 2006, “The Forrester Wave?: Brand Monitoring, Q3 2006” report.
8Net Promoter alone isn’t enough, but alongside other insights about customers’ motivations, other metrics
about customer experience touchpoints, and operational programs, Net Promoter becomes an important
input into a broader measurement process. See the February 2, 2007, “Net Promoter Scores: Good, But Not Enough” report.
9Marketers need technologies that improve marketing processes and help deliver relevant and consistent customer experiences across multiple channels. Leading enterprise marketing platform (EMP) vendors
aspire to be the comprehensive suite. See the May 7, 2007, “The Enterprise Marketing Software Landscape” report.
10 Product reviews can be found at Epinions (https://www.wendangku.net/doc/e918725120.html,), and travel reviews can be found at TripAdvisor (https://www.wendangku.net/doc/e918725120.html,/).
11 As marketers make strides to become more customer-centric, their need for a single agency of record diminishes. Over time, these marketers become better at managing integrated marketing campaigns
— which results in spreading budgets across di?erent agency types, building up internal capabilities, and experimenting with risk-sharing contract structures with their agencies. See the February 23, 2007, “Help Wanted: 21st-Century Agency” report.
12 New tools of Web 2.0 promise to dominate the shopping landscape in the years to come. This will launch
a cycle in which more consumers become comfortable using the Internet for information created by
other consumers and then begin to create content of their own. See the February 20, 2007, “Trends 2007: eCommerce And Online Retail” report.
13 Communispace builds and runs online communities to provide product and marketing insight for its
clients. More information is available at its Web site: https://www.wendangku.net/doc/e918725120.html,.
14 B2B marketers admittedly stick to marketing tactics they say fail to work as well as they would like. See the August 2, 2006, “B2B Marketing Needs A Makeover — Now” report.