Are you engaging your best customers?

Richard offered a three-part presentation on how online customer engagement has become a new science that requires an understanding of the role of persuasion. Visit Richard's Sedley's website.

• Download Richard Sedley's podcast (MP3 file - 21.5mb)
  
  
• Download the PDF version of the PowerPoint slides (3.3mb)
  
  
• Read the full transcript of Richard's podcast
  

Summary of presentation

Richard firstly gave an in-depth view on what customer engagement means and why it is important now. He began with some statistics that show how the online market and customer behaviour is changing. Richard found that in 2002, conversion rates stood at an average 3.2%; in 2005 this dropped to 2.4%. He also found that in 2003, the number of sites that people visited regularly was 11 and in 2005 this dropped to 7.

So, Richard argues that not only are we narrowing down the number of sites we visit, we also switch more easily than ever before between sites – even if we say that we’re satisfied. Our attention spans have decreased: it takes 0.5 seconds to establish credibility on a web page, and 4 seconds to establish value and so we take less time to assess whether a site is worthy of our time and attention (based on brand, recommendations, look and feel etc). Richard argues that customer engagement therefore has to be about building loyalty because if we do not develop engaged relationships, businesses will be in constant new customer acquisition mode.

Richard introduced the term 'right-touching’, a phrase coined by his colleague Dr Dave Chaffey. The concept recognises that because each customer is different they should not be treated as one homogenous group. Using a range of digital Web 2.0 tools Richard asserts that we now have the flexibility to treat each customer differently.

In the second part of his presentation, Richard looked at the role of persuasion and how retailers can differentiate themselves. Based on psychology and behavioural understanding, he makes the point that the goal of persuasion is to change someone’s attitude or behaviour. In customer engagement terms, persuasion is the grease between acquisition, conversion and retention.

The four corners of persuasion:

1. Credibility: There are four different types - presumed, surface, reputed and earned. Richard illustrated the use of design to convey credibility using the NetDetective site as an example, where simple differences in design improved conversion rates.
   
2. Principles of motivation: Richard ran through six main principles – reciprocity, commitment and consistency, consensus, affinity (liking), authority and scarcity. As an example of reciprocity, Richard pointed to a study of doctors’ responses to a pharmaceutical company survey, using money/the promise of money as in incentive. As an example of scarcity, Richard pointed to Concorde’s last flight, which brought thousands out to watch.
   
3. Persuasion windows: Richard argues that persuasion windows are the instances where you have to persuade someone to do something you want them to do because it is in their interest. The key, according to Richard, is in learning how to open the windows. He gave the example of putting a link to something that requires premium access rights, combined with a link allowing sign-up to that premium access level.
   
4. Persuasion as a dialogue: Richard explains persuasion as a dialogue as being about how the process of persuasion changes the persuader. He pointed out the way in which companies can use feedback from customers to improve their web sites and hence further improve the customer experience. Another example Richard gave is of a swiki (a search wiki), which enables users to rate the results of searches, thereby improving the relevance of searches for future users.

Lastly, Richard offered 10 tips for online persuasion.

1. Are your headlines failing? – Do you use questions to elicit interest? Are you relevant to your customers?
   
2. Do you have social proof? – Does your site include multiple customer testimonials? Can your customers see what other customers think? Are the comments credible?
   
3. Make them feel proud – Can you make your customers feel like they are part of a special event? How often do you provide reasons for your customers to be advocates for you?
   
4. Exploit a thank you – a persuasion window to encourage your customers to do something else on your site. Provide choice to achieve a higher conversion rate.
   
5. Set their alarm clock – Provide reasons for your customers to return (regularly). What incentives can you provide?
   
6. Use your authority – Show off your status and recommendations etc. Oversell yourself!
   
7. The power of the portrait – First impressions have a lasting impact. Make sure the pictures you use imply an appropriate level of trust.
   
8. More than just buttons – Be creative with the visual impact of buttons and links to lift conversion rates.
   
9. Loss is more powerful than gain – Can you convey what your customers would be missing out on if they didn’t do what you want them to do?
   
10. Avoid trade-offs – Give customers choices, not a trade-off. When trade-offs occur at a persuasion window, they close the window.