Forrester Marketing Forum: Tie Customer Engagement to Company Performance

EngagementWhen I was with one of the Big Four consulting firms (rhymes with Indenture – just kidding, I loved my time there), I spent a small amount of time on a task force focusing on making the firm a "Great Place to Work" in our market unit in North America.  This committee was filled with passionate people in the organization who understood clearly that people were our #1 asset.  The committee’s charter was to go beyond happy hours and newsletters to come up with game-changing initiatives to improve engagement.  In 2005 the group began to get a lot of attention from senior executives in the firm due to some studies tying employee engagement to outperforming stock prices.  The studies measure how individuals responded in surveys to the "Three Ss": Say, Stay and Strive (developed by Hewitt Associates), measuring how effective an employee would talk about the firm, have a desire to stay with the firm for the next couple years, and optimally thrive in their careers while with the firm.  After an annual employee satisfaction survey was done, we received an "Engagement Index" score and were compared to 1500 other companies who had asked their employees the same questions.

The result: While one could debate the "chicken and the egg," there was a direct correlation between the increase in employee engagement and the increase in stock price across 1500 companies surveyed.  High performing companies had high levels of employee engagement.  This was eye opening and got senior leadership to pay immediate attention and "get in the game" on programs that improved engagement. 

After all the talk at Forrester’s Marketing Forum 2008 about customer engagement, I got to thinking.  There were great presentations from Forrester, retailers and software vendors about how we need to measure or quantify customer engagement.  High performing companies like Dell, Nike and FedEx presented on strategies that have helped them increase customer engagement.

What I’d like to see:  A study that ties a measurement of customer engagement to stock price over time. 

Take some of the key brands represented.  Jordan Brands, part of Nike, Inc., has seemingly a brand that can do no wrong.  They are undertaking innovative ways to engage customers in the same ethos of Michael Jordan himself – launching a breakfast club to motivate young athletes and track or suggest training programs, launching an exclusive "Flight Club" with premium offers, etc.  What has happened to Nike’s stock price in the last few years, and what are analysts saying now, despite a weak economy looming?

Nike_4There are many factors around operating a company that impact the stock price, no doubt, and this is only one example pulled from a list of companies doing great things with customer engagement.  I know this can’t be the only factor, but I am still wondering if any similar correlation can be drawn.

One of the breakout sessions I attended at the Forrester Marketing Forum was The Interactive Marketing Maturity Model presented by Shar VanBoskirk, Principal Analyst, Forrester Research.  In her presentation she explained how few companies have interactive marketing efforts that are optimized, and there is a disparity between the high level of belief in interactive marketing and a low level of actual investment or support to execute.  If this correlation plays out to support a positive association, I suspect it would lend credence to the army of interactive marketers who sense or are trying to prove value but have trouble convincing executives to invest in their campaigns.  I also suspect it would open corporate executives to new ways to engage the customer, making a better case for why interactive marketing, social media and engaging customers are imperatives and not optional.

Have you seen any research out there like this?  What do you think would help legitimize interactive marketing and social media campaigns that impact customer engagement?

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  • TB

    What got our upper management to take more notice was to develop case studies that demonstrated successes: Real example: Customer typed in phrase “x” into a search engine, our Google ad displayed, we tracked the customer to our Website, customer responded to compelling text and call to action, customer submitted sales inquiry, 750k sale resulted.

  • TB

    What got our upper management to take more notice was to develop case studies that demonstrated successes: Real example: Customer typed in phrase “x” into a search engine, our Google ad displayed, we tracked the customer to our Website, customer responded to compelling text and call to action, customer submitted sales inquiry, 750k sale resulted.