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Engaged clients equal better bottom line

Paul Butcher

Editor’s note: The following is the first in a series of five articles about “Rules of Engagement” written by Paul Butcher, director of research at Populus, a Treasure Valley research firm. Populus, in conjunction with the Idaho Business Review and Price Associates, is in its fifth year of conducting the Best Places to Work in Idaho program. Best Places to Work in Idaho is an annual, free and confidential employee survey-based competition open to any Idaho business with 20 or more workers. Organizations that score well on the surveys are eligible to be named one of the top employers in the state. Winners will be featured in a special publication produced by the Idaho Business Review and will be recognized at a special awards ceremony in April 2012. For more information and to register for free, go to www.bestplacestoworkinidaho.com by Jan. 31, 2012.

2011 is rapidly drawing to a close. If you’re like most leaders of small businesses, you have on your list of objectives for 2012 something about improving sales and/or improving margins. Who doesn’t?

Writing the objective is the easy part. Now comes the hard part. What specific thing or things can you do to achieve the objective without breaking the bank? In my opinion, the single most powerful thing you can do to improve your organization’s sales and profit margins is to implement a process to improve your customer engagement.

In order to show you how easy it is to execute and convince you of the power of customer engagement, I’ve compiled five Rules of Engagement. The rules outline a simple, effective and actionable process you can use that will improve the engagement of your organization’s customers.

The Rules of Engagement work. The rules lay out everything you need to do in order to implement and manage a successful customer engagement process. If you follow the rules, you will see measurable improvements in your customer engagement, sales and margins by the end of 2012.

Let’s get started.

Rule #1: Customer Engagement = $

The evidence is overwhelming. Increasing the levels of engagement of your customers with your brand, all else being equal, will significantly increase both your top line and bottom line results. If you remember nothing else from this series of articles, please remember “Rule #1: Engaged Customers = $.”

According to Gallup, organizations that have optimized engagement have outperformed their competitors by 26 percent in gross margin and 85 percent in sales growth. Their customers buy more, spend more, return more often and stay longer. More engaged customers purchase more frequently, spend more per purchase, are less sensitive to price, defect less, take fewer resources to service and are more likely to tell others how great you are. Engaged customers are far more profitable than disengaged or ambivalent customers.

The amount of evidence available is overwhelming. The level of engagement of an organization’s customers has a significant impact on the sales and margins of any organization.

So, what the heck does “customer engagement” mean anyway? How do you know if your organization already has it or not? Will it take too much time and cost too much money to increase your organization’s customer engagement? If you decide to take action, what should you do next? How long will it take to see results?

These questions and more will be answered in this series. It is my hope that after you read all five articles, you will be convinced that obtaining, implementing and executing an effective and efficient customer engagement plan isn’t expensive, isn’t complicated and doesn’t take a lot of your time or energy.

Remember Rule #1: Customer Engagement = $.

Don’t miss next week’s installment, “Rule #2: Engaged Customers Are No Accident,” in which I define customer engagement so you’ll know it when you see it.

Paul Butcher is director of research for Populus, the research company behind Best Places to Work in Idaho. Contact him at paul@populus.com. For more information about Best Places to Work in Idaho, visit www.bestplacestoworkinidaho.com.

About Paul Butcher