Gallup Research has a proven customer engagement instrument that comprises actionable question items with proven links to customer behavior.
Based on their responses to these items, Gallup categorizes customers into three distinct groups: fully engaged, indifferent, and actively disengaged.
The Three Types of Customers
FULLY ENGAGED customers are emotionally attached and rationally loyal. They'll go out of their way to locate a favored product or service, and they won't accept substitutes. True brand ambassadors, they are a company's most valuable and profitable customers.
INDIFFERENT customers are emotionally and rationally neutral. They have a take-it-or-leave-it attitude toward a company's product or service.
ACTIVELY DISENGAGED customers are emotionally detached from a company and its products or services. They will readily switch brands. If switching is difficult or impossible, they may become virulently antagonistic toward the company. Either way, they are always eager to tell others exactly how they feel.
Linking customer engagement to crucial business outcomes
Gallup's analysis has found that fully engaged customers are more loyal and profitable than average customers in good economic times and in bad.
Across a variety of industries and target audiences, including business-to-consumer and business-to-business, Gallup's research has consistently shown a powerful link between customer engagement and key business outcomes.
Data reveals that a customer who is fully engaged represents an average 23% premium in terms of share of wallet, profitability, revenue, and relationship growth compared with the average customer.
In stark contrast, an actively disengaged customer represents a 13% discount in those same measures.
In short, when customers believe they are getting more out of a business, they give more to it. For example, Gallup research has found that:
- In the retail banking industry, customers who are fully engaged bring 37% more annual revenue to their primary bank than do customers who are actively disengaged. Fully engaged banking customers also have more products with their bank, from checking and savings accounts to mortgages and auto loans. Plus, they have higher deposit balances in their accounts than less engaged customers with the same products do.
- In the consumer electronics industry, fully engaged shoppers make 44% more visits per year to their preferred retailer than do actively disengaged shoppers. And when they do visit their preferred electronics retailer, these fully engaged shoppers purchase more items than they originally intended to. On average, they spend $373 per shopping trip, while actively disengaged customers spend $289 per trip.
Gallup found similar results in other industries, including the restaurant, hospitality, and insurance industries:
- Restaurant -- casual dining: Fully engaged customers make 56% more visits per month than actively disengaged customers do.
- Restaurant -- fast food: Fully engaged customers make 28% more visits per month than actively disengaged customers do.
- Hospitality: Fully engaged hotel guests spend 46% more per year than actively disengaged guests spend.
- Insurance: Fully engaged policy owners purchase 22% more types of insurance products than actively disengaged policy owners do.
When businesses can provide the meaningful experience their customers want, they realize greater rewards in terms of loyalty and profits.
Though it can be difficult for businesses to connect with their customers on an emotional level, it can be done be listening and establishing a trusting relationship that's mutually-beneficial for the customer and the business.
What actions are you taking to enhance customer engagement?