ISB Updates

Engagement Strategy: A New Source of Competitive Advantage

When does a transaction transform into an engagement? What are the components of a profitable customer engagement? Is it possible to engage customers better by engaging employees effectively?
If you think only trust and commitment of your customers is enough to turn your firm into a fortune maker, then think again. Firms have been slowly shifting their focus from the objective of merely selling to connecting emotionally with not only their customers, but with other stakeholders too, thus ensuring a lifetime of loyalty and profitability.

“Customers become engaged with the firm when a relationship based on trust and commitment is satisfying and has emotional bonding, quite like in a marital relationship,” said Dr V Kumar, a Regents Professor, a Richard and Susan Lenny Distinguished Chair and Professor of Marketing, Executive Director, Center for Excellence in Brand & Customer Management, and the Director of the PhD Program in Marketing at the J. Mack Robinson College of Business, Georgia State University.
“Every firm wants to engage its customer, but customers are not the only assets in the organization. We need to figure out how to engage the employees too.” Dr Kumar said, adding that employee engagement is a five dimensional measurable concept viz. employee satisfaction, identification, commitment, loyalty, performance. Effect of employee engagement on customer engagement is enhanced by empowering employees. Thus, attitude, behaviour and level of connectedness among the customers, between employees and customers, between customers and employees and the firm are critical to the firms's performance and profitability.
Dr Kumar has been providing strategies to firms, to improve their level of engagement with their stakeholders. To define and measure the same his team of researchers has worked for two years on 120 large public companies. With several awards to his name, Dr. Kumar is currently listed in Who’s Who Worldwide, for his leadership and achievement in the field of Marketing, and Who’s Who Among Global Business Leaders, for his leadership and quality work.
Direct contribution of engagement to the firm is the life time value through stakeholder interaction and through their behaviour, while the indirect contribution is that customers become evangelist of the firm thus becoming a vehicle for building a larger customer base. Fully engaged customers pay more visits to the product or service provider, compared to the actively disengaged ones.
“Contrary to conventional wisdom, people like to spread word of mouth of positive things than negative things.” Dr Kumar added, citing a crucial learning from his research.