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Total customer engagement: Designing and aligning key strategic elements to

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Article  in  Journal of Product & Brand Management · June 2010

DOI: 10.1108/10610421011046175 · Source: OAI

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 Total customer engagement: designing and
aligning key strategic elements to achieve
growth
Christopher Roberts
Engaged Marketing, Brisbane, Australia, and
Frank Alpert
UQ Business School, University of Queensland, Brisbane, Australia

Abstract
Purpose – Businesses today face a number of difficult challenges that make customer engagement more important than ever. The usual way in which
businesses operate makes it difficult to achieve high levels of consumer engagement. Perhaps the main problem with all the bits and pieces of ideas
that would promote customer engagement – branding to consumers, internal marketing within the company, and service delivery – is how to fit all
these together. The way to implement such models throughout the company is not clear and not easy to understand.
Design/methodology/approach – The total engagement model puts everything together into an efficient and effective system. The key is focusing
on aligning all activities of the company on a unified plan for customer engagement, including advertising, service, products and the internal culture. An
important benefit of the total engagement model is the synergy through total brand strategy alignment throughout the company: the whole (through
integration) is greater than the sum of the parts (of which some may already be good and some not so good but they may be fragmented). The proposed
model is fairly comprehensive and thereby integrates and clearly explains, with emphasis on actionability, how to design and operationalise a growth
plan driven by increasing customer engagement.
Findings – The findings of two case studies are presented, which illustrate the model at work.
Practical implications – The approach will be of interest to managers who seek to integrate a comprehensive, actionable brand management model
throughout the company in order to maximise growth potential.
Originality/value – The paper outlines an original business model, the “total engagement model,” which, when executed well, can help an
organisation to achieve business growth via customer engagement.

Keywords Brand management, Customers, Marketing models

Paper type Research paper

An executive summary for managers and executive
readers can be found at the end of this article.
1. Introduction
The success of a business is driven largely by whether customers
decide to purchase its products. It is well-known that, if an
organisation takes steps beyond just encouraging customers to
make once-off purchases and instead attempts to create engaged
customers, they can dramatically increase business performance
including sales and growth. This article focuses on the key
elements you must have in place to create engaged customers.
Let us look at the various degrees of customer engagement
that are possible. Each level builds on the previous level:
1 Level 1 – Customer purchases your product/service.
2 Level 2 – Customer is loyal to your product/service and
either continues to repurchase (product) or continues to
use (service).
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1061-0421.htm
Journal of Product & Brand Management
19/3 (2010) 198– 209
q Emerald Group Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/10610421011046175]
3 Level 3 – Customer readily buys your other product/
service lines.
4 Level 4 – Customer recommends your product/service to
others if presented with the opportunity.
5 Level 5 – Customer is an advocate and promotes your
product/service at every opportunity.
If an organisation has a high proportion of engaged customers
it is obvious that the business will be even more successful.
Let’s call customers that are levels 3-5, engaged customers.
Our definition of an engaged customer is one that is loyal to
your brand and actively recommends your products and
services to others. Engaged customers drive word-of-mouth
marketing that is ten times more effective at resonating with a
target audience than television or print advertising (Kirby,
2006). The importance of customer recommendation and its
strong correlation to long term growth and profit is well
documented, and recently popularised with the success of Fred
Reichheld’s book The Ultimate Question. Additionally, engaged
customers provide invaluable feedback, have longer business
relationships and pose less risk to the company as they are
committed to solving problems without escalating to more
aggressive behaviours such as litigation (LaMalfa, 2008).
So, the key question (and our question here) becomes: how
to create engaged customers? What is wrong with the way
some businesses conduct their marketing now so that they are
not creating engaged customers? Why do some businesses
have a larger proportion of engaged customers in comparison

198
 Total customer engagement
Christopher Roberts and Frank Alpert
to others? Is it as simple as asking customers what they want
and delivering against this or do you need to do more?
Basically, can we develop a set of clear and practical rules that
businesses can follow to help create more engaged customers?
Our proposition is key strategic elements need to be
designed to create engaged customers. These elements are
present in most organisations and the individual benefits of
these are well documented. They are:
.
customer value proposition;
.
brand;
.
internal culture elements; and
.
customer experience.
The key assertion in this article is that an organisation must
have clarity and more importantly alignment of these key
elements with a view to creating engaged customers.
A quote from Gandhi best illustrates the importance of
alignment. The quote is about happiness but it can easily be
about effectiveness as well. According to Gandhi:
Happiness is when what you think, what you say and what you do are in
perfect harmony.
How often is an organisation’s intent or what they think (value
proposition), what they say (brand advertising) and what they
do (value delivered and customer experience) in perfect
harmony from a customer perspective? In fact, how often do
you even find harmony between an organisation’s functional
departments? Typically they have different drivers and goals.
Inevitably this results in a lot of internal energy being wasted
as the organisation does not have a unifying customer
business outcome as a guiding light to bust internal silos.
The typical marketing approach of mass production,
developing “creative” mass advertising, selling products and
ensuring customers are “satisfied” is simply not enough to
create engaged customers in the current environment as there
are significant external challenges that strongly suggest
marketers will need to change their approach to achieve
success. There are also significant internal obstacles that stop
organisations from creating engaged customers.
Let us look at some of the external challenges first.
2. External business challenges
.
Increasing commoditisation. For many product and service
categories the only differentiation is price (Copernicus
Marketing Consulting, 2000).
.
Rapid product innovation cycles. As soon as a new
innovation is introduced it is replicated and improved-on
extremely quickly by competitors, reducing or even
negating the effects of the previously expended effort.
.
Increasing communication. Depending on which study you
look at it is estimated that customers are faced with
approximately 3,000 advertising messages per day
(Durning, 1992; Barnet and Cavanagh, 1994).
.
Traditional media dilution. The advent of cable TV, an
increase in radio stations, mp3 players, social networking
sites such as YouTube and the internet in general has
resulted in severe dilution of traditional media channels
marketers typically rely on. According to James Stengel,
CMO of P&G, 117 TV ads are required to hit 80 per cent
of the population at least once; in 1965, this number was 3
(Peers, 2004). Last year saw internet use overtake
television viewing for the first time, according to Nielsen
Online’s 10th Australian Internet and Technology Report
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Volume 19 · Number 3 · 2010 · 198 –209
(Nielsen Online, 2008). Marketers need to realise that
traditional media is far from what it used to be.
.
Message fatigue. A third of all direct mail is thrown away
without being opened, and nearly 60 per cent is thrown
away without being read (NTC Publications, 2003).
Additionally, 69 per cent of people are interested in
mechanisms that skip advertising completely (Yankelovich
Partners, Inc., 2005).
.
Scarcity of time. Increasingly, people have less time. The
lack of time coupled with increasing choice and
communication has resulted in brand decisions being
made in an average of 2.6 seconds (Fisk, 2006).
.
Increasing choice and competition. The choice available with
even a simple product such as milk has increased
dramatically. There are various different milk strengths
(skim, lite, full, etc.), flavours and types (such as soy, rice,
oat and goat milk to name just a few). Consider the number
of fashion outlets and coffee shop franchises we have
available to us today in comparison to 10 or 15 years ago.
.
Greater customer control and access to information. With just
a few clicks of a mouse a customer has access to the
features and reviews for almost any product, to the point
where customers may know more about a product than
the in-store sales person.
.
Increasing customer cynicism. A total of 82 per cent of
consumers believe the customer experience by
organisations will not match their advertising (Shaw and
Ivens, 2002). This is because in many instances the
promises made in advertising are not met. In addition 80
per cent of consumers say that they will never buy from a
company after the first negative experience (RightNow
Technologies, Inc., 2007).
.
No place to hide. The web, including blogs and social
networking services such as Facebook and MySpace
means a bad customer experience is shared with
thousands extremely quickly.
The above factors create an extremely challenging
environment where businesses are compelled to invest more
in marketing channels, which are not as effective as they once
were, or to compete on price alone. Both of these options
erode margin and profitability.
Additionally, trust in traditional marketing channels has
dropped while trust in peer-to-peer WOM is extremely high
as illustrated in the studies in Table I.
Table I Trust in traditional marketing channels
%
Which factors make you most comfortable when purchasing a
product? *
Brand website 8
Advertisement 15
Newspaper/magazine recommendation 22
A friend recommended 76
I trust this type of advertising * *
Radio 45
TV 45
Magazines 50
Recommendations from customers 90
Source: *2004 Mediaedge: CIA study as cited in Kirby and Marsden
(2004); * *Nail (2004)
 Total customer engagement
Christopher Roberts and Frank Alpert
In summary, we live in an over-communicated,
commoditised, competitive world with increasing media
dilution, customer control and customer cynicism and
hence creating engaged customers is now even more
important. The reasons are self evident as engaged
customers are not just loyal they also buy additional
product lines, and are the most credible, trustworthy and
effective sales and communication channel available to
marketers today.
3. What must you do to create engaged
customers?
Considering the above challenges and increasing customer
cynicism, every communication and customer interaction
should be fully leveraged, optimised and treated as an
opportunity to create engaged customers. Importantly, every
interaction must be consistent and work together to achieve
this objective.
Let us look at what drives loyalty and recommendation.
Figure 1 is our linking of a typical consumer loyalty ladder to
marketing management actions.
Typically the stages customers go through on a journey
towards recommendation or advocacy are outlined in
Figure 1:
.
Marketing plays a major role in the stages of awareness,
interest and preference.
.
Sales and/or marketing play a role in the purchase stage.
.
Then the customer experiences the product. Functional
areas that play a part here include product design,
manufacturing and operations including billing, IT, and
service centres.
. Based on assessments made of these previous experiences
the customer then moves through the other stages
including retention, affinity, recommendation and finally
the ultimate stage of “advocacy”.
Typically the two aspects that drive advocacy and
recommendation more than anything else are great
customer experiences and the delivery of a strong value
Figure 1 Marketing and the consumer loyalty ladder
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Journal of Product & Brand Management
Volume 19 · Number 3 · 2010 · 198 –209
proposition that includes functional and emotional
dimensions. Think about the last time you recommended a
product or service to someone, invariably it would have been
because they delivered a distinct value proposition which may
include product dimensions such as functionality, price,
image, fashion or innovation.
Alternatively, it would have been because the customer
experience with the organisation was great.
4. The total engagement model
If you acknowledge that you need to deliver a distinct value
proposition and customer experience to create engaged
customers, it is imperative then that you also align two
other key elements. The first is your brand, which should
consistently communicate your value proposition. The second
is your internal culture, as this is the key enabler in delivering
a distinct value proposition and planned customer experience
via engaged employees.
An engaged employee is an employee who clearly
understands your strategy and direction and is personally
committed to making it a success. They are more productive,
more committed to settling disputes peacefully and are more
loyal to their company in general (LaMalfa, 2008). It is
integral to establish a strategic and collaborative link between
engaged employees and engaged customers if you want to
achieve long-term growth.
These linkages are brought together in the total engagement
model which focuses on aligning the four key elements of
brand advertising, culture, customer experience and customer
value propositions, which are defined as follows:
1 Brand is effectively the sum total of who you are and what
you stand for, not just your logo or name. Your value
proposition must form a key part of your brand.
2 Culture refers to “the way we do things around here”, and
refers to the internal aspects of the organisation such as its
goals, values and internal behaviours. This should be
designed to create an environment where staff can
consistently deliver your value proposition and planned
customer experience.
 Total customer engagement
Christopher Roberts and Frank Alpert
3 Your customer experience is a combination of physical and
emotional elements your customers experience when they
interact with you – in other words what you actually deliver.
4 Your customer value proposition in simple terms is the
value you offer your customers. In other words, this is the
reason customers should buy from you over your
competitors.
To create engaged customers an organisation should
implement the following steps:
1 Develop a unique value proposition based on strong
customer insight.
2 It should then communicate this value proposition to
customers consistently in its brand advertising.
3 This promise is then ideally delivered by staff that support
and understand the strategy and importantly, understand
their individual role in making it a success.
4 This cultural foundation results in the delivery of a
planned customer experience that delivers strongly against
the promise made in your advertising.
In summary, make unique and relevant “promises” and
strongly engage your staff to deliver or exceed expectations
against these promises. This is the fundamental model to
build trust, summarised in the total engagement model
diagram (Figure 2).
This alignment of all elements is what facilitates the
creation of engaged customers and staff.
Another way to represent this is to imagine a journey where
the goal is to stand out in a world of increased communication,
commoditisation, media dilution and competition.
The path towards customer engagement is outlined above.
Organisations sometimes operate like dim lights in a sea of
other dim lights, struggling to get noticed in an over
communicated and competitive world. They get around this
by investing more in advertising, price promotions and sales
incentives to create awareness and increase sales.
Figure 3 outlines how alignment allows an organisation to
truly stand out in this challenging environment and at the
same time increase its effectiveness and efficiencies by
alignment.
Some best practice examples include Virgin that delivers
experiences which are “fun” and offer “moments of wonder”
which is what they communicate in their advertising. Another
Figure 2 The total engagement model
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Journal of Product & Brand Management
Volume 19 · Number 3 · 2010 · 198 –209
example is Symantec which deliver “confidence in a
connected world” via a great service experience which is
also their advertising line. Unlike some other software
organisations Symantec do not make it difficult to call their
service centre and speak to a real person. When you do call
them the experience is very pleasant. Organisations that have
all these components aligned all enjoy high growth rates, high
retention, positive customer recommendations and engaged
staff.
If you look at organisations such as Southwest, Commerce
Bank, Virgin, and AAMI (an Australian insurance company),
you will find that what they have in common is rapid organic
growth built on the key elements shown in Figure 4.
We identify four levels of organisational performance that
determine its capability to create engaged customers:
1 Level 1. Brand, internal culture, customer experience and
customer value proposition are not clearly defined.
2 Level 2. Brand, internal culture, customer experience and
customer value proposition are clearly defined but have
been designed in isolation and are not aligned.
3 Level 3. Brand, internal culture, customer experience and
customer value proposition are clearly defined and aligned
to create engaged customers.
4 Level 4. Brand, internal culture, customer experience and
customer value proposition are clearly defined and aligned
to create engaged customers. Plus these elements are
embedded into the daily operation of the organisation.
A great example of the model in action at level 4 is AAMI, a
leading insurance company in Australia. Their tag line is
“lucky you’re with AAMI.” This has been their consistent
advertising positioning line for decades. What this means is an
appreciation that when customers make an insurance claim
they are stressed and hence the AAMI staff go out of their way
to make the experience as pleasant as possible. AAMI staff are
motivated by their fundamental purpose – to eliminate stress
and provide peace of mind for their customers. The service
plan is outlined in their customer charter which even includes
a rebate of $30 if they do not deliver against their charter.
Since 1993, AAMI has experienced more than 10 per cent
annual sales growth on average (Australian Associated Motor
Insurers Limited, 2007).
5. The chasm between strategic intent and
strategic execution
A total of 95 per cent of executives believe that customer
experience is the next competitive battleground (Shaw and
Ivens, 2002). Unfortunately, intent and actual execution are
often two different things, as seen in Figure 5.
A total of 80 per cent of executives surveyed in the 2008
Strativity Group’s Global Benchmark study strongly agreed
that customer strategies play a more important part than ever
before in the success of companies (Strativity Group, Inc.,
2008). Yet, the actual strategic execution is shown on the right
side of Figure 5. This highlights that even with the best
intentions there are significant internal challenges in achieving
true customer engagement.
The study also starkly illustrates the broken links or lack of
alignment with an organisation’s core value proposition,
customer experience, internal culture and staff engagement.
The primary reason why CEOs fail is not because of a faulty
business strategy, but because the execution of their strategy is
flawed (Charan and Colvin, 1999). The reasons for this are
outlined in the next section.
 Total customer engagement
Christopher Roberts and Frank Alpert
Figure 3 The engagement journey
Figure 4 The key elements
6. Internal organisational barriers and challenges
There are major internal challenges that cause the chasm
between strategic intent and strategic execution. Specifically
the challenges are around aligning key strategic elements to
create engaged customers.
What commonly occurs is that the key elements in the total
engagement model, which include value proposition, brand,
Figure 5 The chasm between strategic intent and strategic execution
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Journal of Product & Brand Management
Volume 19 · Number 3 · 2010 · 198 –209
culture and customer experience, may be well defined and
function satisfactorily in isolation but they are rarely aligned
to achieve a planned customer outcome. The result is sub-
optimal business outcomes including the formation of an
environment where the creation of engaged customers
becomes extremely challenging. The main reasons for this
are:
1 Separate ownership of key elements. Brand is owned by
marketing, customer experience by operations and
internal culture by human resources.
2 Designed in isolation. Sometimes Brand, Culture and
customer strategies are designed separately without
consultation or input from the other functional areas.
3 Customers require consistency. A typical customer journey
of interactions and the impacted functional areas can
look like Figure 6. A customer has to score you highly
across their whole journey of interactions to become an
engaged customer. This means every functional area
 Total customer engagement
Christopher Roberts and Frank Alpert
Figure 6 Typical customer journey
must perform well and in addition the experience must
be consistent.
4 Lack of a unifying customer outcome or goal. Each
functional area may have different core drivers, as an
example, marketing may be focussing on effective
customer communication and competitive positioning,
sales on achieving sales goals and conversion, while
operations and the service centre may be focusing on
operational efficiency and customer satisfaction and
human resources’ focus could be around creating a
positive workplace and employee satisfaction. Though
this functional focus makes perfect sense for each area
in isolation typically it burns up internal energy as
functional areas attempt to deliver customer experiences
without a unifying customer goal or outcome.
5 External agencies are also specialist in nature. Marketing is
assisted in its brand efforts by advertising agencies,
human resources by cultural agencies and operations by
call centre specialists and process consultants (TQM
and six sigma). There is no specialist consulting agency
that aligns all key elements.
6 Focus on satisfaction. As outlined previously the focus of
many organisations is to achieve customer and staff
satisfaction. This is a major inhibitor towards the
creation of engaged customers. Satisfaction means you
meet customer and employee expectations. This is
limiting as organisations may set their sights too low
resulting in strategies and experiences that are bland
and transactional in nature. The unfortunate thing
about satisfaction is that if you focus on it you may
actually achieve it but it may not be enough to create
engaged customers. Still satisfaction is probably
considered to be the leading customer metric in most
organisations.
7 Link between current satisfaction measures and financial
metrics is tenuous. Intuitively most people agree that
being good to customers makes sense. However, typical
customer satisfaction measures do not provide robust
links to financial metrics. Questions executives have are
“we achieved 3 out of 5, is that a good score?” and “if
we move our score up to 3.5 what is the bottom line
impact?” Satisfaction measures cannot answer these
questions adequately. Scales and approaches are also
not consistent across organisations as various
methodologies and scales are used. Though high
customer satisfaction links to better business
performance it does not motivate organisations to
strongly engage with customers because the causal links
to financial goals are not clear.
8 Lack of thorough customer economics. A related point is
inadequate calculation around customer economics and
profitability. Typically, organisations have robust
product profitability information but lack the same
level of robustness with customer economics.
Organisations can tell very quickly which products are
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Journal of Product & Brand Management
Volume 19 · Number 3 · 2010 · 198 –209
profitable and which ones are not profitable.
Unfortunately, this does not always apply to customer
economics. Typically, even if basic customer economics
are present they may not include all cost-to-serve
elements, customer lifetime values and the impact of
positive or negative word-of-mouth, which is a
particularly important factor. As full economic value is
not taken into consideration, customer initiatives
become difficult to justify.
9 Limited focus on planned customer emotions. Customer
experience design tends to limit itself to physical
elements such as features, reliability, timeliness and
response time. The emotional elements, which is how
you want customers to feel after an interaction are
largely ignored. Research in Australia (SOCAP, Evalue
Pty Ltd and Psychologica, 2003) and the UK indicate
that emotions make up more than 50 per cent of the
customer experience.
10 Lack of clarity around what constitutes a customer
experience. What does good service mean? It could
mean a myriad of things such as being responsive,
timely, knowledgeable, friendly, helpful, reliable,
courteous, welcoming, accessible, or picking up the
phone in 3 rings, etc. Organisations need a clear
customer experience statement outlining their unique
planned experience which includes both physical
elements (what you deliver) and emotional elements
(how you want customers to feel). This then enables a
unique customer experience to be planned, managed
and measured.
11 Voice of the customer is not embedded in the organisation.
Customer surveys are conducted quarterly or even
annually. This does not allow an organisation to
monitor and take action in a timely fashion. In fact
one survey found that:
. 95 per cent of companies collect customer feedback;
. 50 per cent alert staff of the findings;
. 30 per cent make decisions using the findings;
. 10 per cent deploy and improve; and
.
5 per cent inform customers of the change
(Responsetek, 2003, as cited in Woodcock and
Starkey, 2005).
12 Lack of staff engagement. This is a critical aspect that is
often ignored. Engaged employees can either make or
break the execution of an organisation’s strategy and
considering that only about a third (29 per cent) of
employees are fully engaged while 19 per cent are
disengaged, staff are an integral but often ignored
component in business strategies (Wellins et al., n.d.;
BlessingWhite, 2008). In fact, only about 27 per cent of
organisations around the globe have a formal program
to increase employee engagement (Melcrum, 2008).
According to the 2003 SOCAP Consumer Emotions
Study the customer emotions that most impact on
recommendation in addition to satisfaction are
 Total customer engagement Journal of Product & Brand Management
Christopher Roberts and Frank Alpert Volume 19 · Number 3 · 2010 · 198 –209

delighted, impressed, special, empowered and
important (SOCAP, Evalue Pty Ltd and Psychologica,
2003). Here is the question. How can you expect your
staff to evoke these emotions with your customers if they
themselves are NOT satisfied, delighted, impressed or
treated as special and important?
7. How do you implement the total engagement
model?
Organisations that have aligned their customer value
proposition, brand, culture and customer experience
typically have leadership that is customer focussed and
prescriptive in nature. They determine the organisation’s
framework of operation, the value it delivers and how this
value is delivered. Examples include 4 Seasons, Nordstrom,
Apple, Intuit, Enterprise Rent a Car and Southwest.
Coincidently these organisations also enjoy positive word of
mouth, high customer retention and long-term growth.
In the absence of leaders that have a strong customer focus
and set prescriptive direction you need to engage all key
stakeholders including the CEO, Executive, Staff and
Customers. The steps organisations need to follow are
(Figure 7):
1 Customer economics. Begin by building a customer
economic business case. Define engaged versus non-
engaged customers in terms of loyalty, share of wallet
and recommendation to determine customer lifetime
value. Then compare engaged customers versus other
customers, as this will help build the business case for
your customer initiatives.
2 Governance. Create a customer program committee
where all key customer functional areas are represented.
The key internal sponsor should be a senior executive
and the committee should be chaired by the CEO.
Ensure the program team has a mix of project
management, analytical and functional expertise.
3 Design. Design all key strategic elements together
including brand, customer value proposition, internal
culture and customer experience. Start with your vision,
customer value proposition and planned customer
experience. This ensures that the creation of your
Figure 7 The total engagement model in action
strategic elements is designed with a view to achieving
your vision and your planned customer outcomes.
Ensure the heads of all key functional areas are
present in the design stage namely sales, marketing,
service, HR and operations. Focus on more than mere
satisfaction. Ensure that your planned customer
experience includes emotional elements as well.
4 Engage. Invite all staff to participate in the creation of
engaged customers. Involve staff by empowering them
to develop innovative ways to create engaged customers.
Ensure leaders exhibit the right behaviours.
Staff engagement is a function of staff understanding
your strategy, knowing what is expected of them,
knowing they have the skills and resources required,
being personally committed to your strategy and finally
knowing that they are making a difference.
The key to engaging staff is to sell staff the strategy
from two perspectives:
1 rational – business benefits, competitive benefits,
market perspective; and
2 emotional – customer perspective, doing the right
thing, an invitation to make a difference;
and to involve them in the design and delivery of your
customer experience elements.
5 Measure. Measure customer engagement levels in terms
of consideration, recommendation and loyalty. Follow a
rating question with a question asking the reason for the
score. Ensure that measures around recommendation
and loyalty are granular and are census based so that
results are at an appropriate operational level (branch,
retail outlet, product, call centre team or other channel).
From an internal perspective each team should be
measured on their behaviours by peers and internal
clients against the organisational values. Encourage
inter-functional discussions post feedback.
6 Embed. Invite staff to develop initiatives against your
planned customer experience. In addition, encourage
staff to innovate and develop new initiatives. Deliver
customer feedback to functional areas that are best
qualified to make improvements. Create processes so
that staff can make improvements against customer
feedback.
7 Performance management. Manage, reward and recognise
against the following:
. living the organisational values;
. internal peer ratings against agreed behaviours based
on organisational values;
. customer measures – recommendation, loyalty and
consideration.
Hire and fire based on fit with organisational values and
behaviours.

8. Case studies
What would it be like to implement the total engagement
model in practice? The hardest part is implementing the total
model, all aspects at once and in complete alignment. To
show what this would be like, we present examples in two
different industries.

8.1 Sheldon College – alignment driven by customer-

focused leadership
Why would a school student plead to be re-admitted to a
school that expelled her two years ago for not meeting its
standards of behaviour?

204
 Total customer engagement
Christopher Roberts and Frank Alpert
Dr Lyn Bishop, the principal of Sheldon College, a K-12
private school in Brisbane, Australia, sat opposite Jenny
(actual name withheld) in her office. Jenny had been expelled
from the school two years ago as she did not meet the school’s
strict standards of behaviour.
The consequences of not adhering to Sheldon’s standards
of behaviour are well known within the school. As an example
there was an instance where a child was sent home as his hair
cut was too short and the media picked up on the story and
Dr Bishop was positioned by the media as draconian, old
fashioned and inflexible. However, Dr Bishop stayed
consistent to the schools values and the Sheldon College
community, including staff and parents, completely
supported her.
Jenny’s parents had just separated and as a result could no
longer afford to pay the tuition fee at Sheldon College. Jenny,
however, is so committed to returning to Sheldon College that
she worked part time for a year and saved up for her tuition
fee herself and pleads with Dr. Bishop to accept her back.
Jenny’s commitment to return is reinforced by her experience
at other schools – she now fully appreciates the unique
learning experience offered by Sheldon College.
What is so special about this school? Why would a young
student work part time for a year to earn money to pay tuition
fees so she could be re-admitted?
Sheldon College opened in 1997 with 110 students. Since
that time the school has grown to over 1,450 students in ten
years and has a growing reputation as one of the best new
private schools in Australia.
The success of Dr Bishop, and Sheldon College, has been
recognised by the community multiple times. Dr Bishop was
awarded the 2002 Australian Entrepreneur of the Year and
the 2000 Australian Institute of Management Professional
Manager of The Year.
The positioning of Sheldon College is “traditional values . . .
progressive thinking”. This line is used in their advertising
and on their website and the experience that Sheldon College
provides is based on that. Examples of traditional values
include the notion of respect between students and adults
such that students always say “good morning/afternoon” to
teachers and parents, the zero tolerance for bullying and the
strict guidelines associated with dress and appearance.
Though the values are traditional the teaching methods and
facilities are modern. Sheldon College focuses on fostering an
attitude amongst its students that “it’s cool to be an achiever”
as opposed to “it’s cool to be a fool”.
The teachers at Sheldon College are professional,
passionate and love what they do. In terms of appearance
they are extremely well groomed and their presentation style
is as polished as executives presenting at a Board meeting.
Dr Bishop’s criteria is simple, as she looks for “teachers that
treat teaching as a vocation, not a job.” Teachers go through
a multistage recruitment process including a peer review
and presentations by existing teachers about life at the
college before they are employed. Teachers are also “fired”
if they do not align with school values. If however, the
teacher has technical deficiencies, the school’s support
infrastructure invests as much time as required in skill
development.
Sheldon College is an excellent example of an organisation
that meets the requirements of the Total Engagement Model
and reaping the benefits. The common thread across all
elements including their customer value proposition, brand
advertising, culture and customer experience is all about
“traditional values . . . progressive thinking”.
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Let us look at each aspect:
1 Customer value proposition. “Traditional values . . .
progressive thinking”. Parents choose Sheldon College
because it not only emphasises traditional values but
because they also have the latest facilities.
2 Advertising. “Traditional values . . . progressive thinking” is
also the tag line in their billboards, website and other
communications.
3 Internal culture. Here are excerpts from the vision and
mission statements for Sheldon College:
. Vision: “traditional values and progressive thinking for
quality learning and living.”
.
Mission: to provide a quality educational experience in
an environment that encourages and enables our
students to succeed in a constantly changing world.
Sheldon College’s cultural elements and values are reiterated
every week to staff at weekly staff meetings and with students.
It is not unusual for Dr Bishop to walk up to a teacher and ask
“what have you done this week to progress the Sheldon
College Mission statement?” Typically a value is workshopped
internally at these staff meetings. The cultural elements are
also refined at annual strategic planning workshops.
Customer experience: if you ask parents to describe the
experience they would say “traditional values . . . progressive
thinking.”
All these values are communicated to parents (and also to
students) via newsletters, annual functions, and to any parents
who attend the weekly assembly.
Interestingly advertising is not their main acquisition
channel. The key channel that drives Sheldon’s growth is
positive WOM where current parents recommend the school
to other parents. In terms of growth they have grown from
110 students to more than 1,450 in 10 years (Sheldon
College, 2006).
A private school is like any commercial entity – a wide
category of competitors, various fees and value propositions.
The customers (namely the parents) are entrusting their most
valuable possession into the hands of the school. Sheldon
College are also competing for staff, especially teaching staff.
Sheldon College has more than 200 staff.
It should be noted that, like most organisations focussed on
delivering a unique value proposition and experience, they do
not appeal to everybody. Some students and parents find the
discipline regime too demanding and restrictive. Additionally,
some teachers do not fit in, as working at Sheldon College
sometimes means longer working hours and they are asked to
wear a uniform, which some find restrictive.
8.2 Energy utility – using the total engagement model to
recover a brand
This case study outlines how the total engagement model
principles were used to systematically recover a brand from
unprecedented lows to higher-than-previous levels. As a result
of applying the total engagement model, ENERGEX went on
to again become one of the strongest brands in the state and
the strongest energy brand in the country. Brand strength was
measured independently by market research studies with
worldwide credibility and reputation such as Y&R’s brand
asset valuator and the TNS brand index.
In early 2004 the South-East Queensland region in
Australia was hit with five heavy storms in seven days
resulting in more than 200,000 homes losing power. This
level of storm activity was unprecedented in the region.
 Total customer engagement
Christopher Roberts and Frank Alpert
The power retailer in this region was ENERGEX, a State
Government owned corporation. ENERGEX serviced
approximately 1.2 million residential and business
customers, its annual revenue was $2.36 Billion and it had
total assets of $5.62 Billion (Source 2004/2005 ENERGEX
Annual Report). ENERGEX employed approximately 3,370
staff. As a government owned corporation it had its own
board of directors and operated like a privately listed
company.
Before this series of storms the ENERGEX brand was one
of the strongest regional brands in the state of Queensland
and had a reputation for great service, enjoying very high
customer satisfaction ratings in comparison to other
Australian utilities providers.
The power outages resulted in a series of press articles but
at this early stage customer perception was not adversely
impacted. There was an appreciation by the general public
that such a fierce series of storms was unprecedented and as
such ENERGEX was taken by surprise.
In response to the initial press scrutiny the state government
commissioned an independent study to understand the
reasons for the outages. The study made some positive
comments about ENERGEX but it also presented a major
criticism of the company for having an inadequate supply
infrastructure for current and future requirements. The press
seized on this report and blamed government underfunding
and accused the government of treating the utility as a “cash
cow”. This then led to a sustained “campaign” by the press
against ENERGEX and the State Government, resulting in
eight months of negative press coverage, every day. The press
machine fed itself daily starting with an article in the morning
newspaper, which was picked up by morning talk back radio,
which in turn was then picked up by afternoon talk back radio
and the evening TV news. The next day the whole process
started again.
At the same time the state government also conducted its
own detailed investigations into the organisation’s internal
operations including board processes, operational processes
and executive business expenses. Possibly as a result of this
extreme and daily scrutiny the CEO took his own life.
Over the next three months ENERGEX lost two Chairmen,
two Board Members, the next acting CEO and three senior
General Managers through resignations. Some resignations
were forced and some were voluntary. The community lost
confidence in the organisation and the brand damage was
catastrophic. On every major brand measure ENERGEX had
the lowest ratings in the country in comparison to other
utilities.
To understand how this brand was recovered we need to
look at the situation just prior to the storm events. The
ENERGEX marketing team were putting steps in place to
rejuvenate the brand. Current branding was around seven
years old and needed freshening up. The plan however, was
not to just focus on the external brand but to also align
internal culture and customer experience with the brand. The
external positioning line developed was “energy X expertise”.
This was meant to indicate that the brand was proactive,
helpful, knowledgeable and an expert.
A customer experience statement was developed with four
components: a goal, emotional elements, physical elements
and desired business outcome as follows:
1 Goal. We want our customers to be impressed.
2 Emotional elements. We will achieve this by proactively
providing expert solutions that help them.
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3 Physical elements. Everything we do will be delivered in a
safe, timely and reliable manner.
4 Business outcome. As a result our customers will become
advocates and will say “I will happily recommend
ENERGEX to others.”
This was the internal articulation of what the brand
positioning of energy X expertise meant.
An internal communication strategy launched the customer
experience strategy company wide. As it was common to all
functional areas staff were encouraged to interpret it
according to the relevance to their function. Every
functional area served either an external client or an internal
client, or both, and hence the statement was relevant to all –
everyone had a “customer” whether that customer was a
fellow staff member (an internal client) or a real customer.
Each functional area then developed initiatives for the
elements (elements are the underlined words in the
customer experience statement) relevant to their area, a
performance target that could be measured and finally each
area also nominated the person responsible for the initiative.
More than 1,100 initiatives were developed organisation wide.
The external research brand track was modified to include
these elements. In addition, an inter-functional team survey
was conducted where every team was assessed by at least
three of its internal clients/peers against the above elements.
Effectively, the whole organisation was reviewing itself and
singing off the same hymn sheet.
In addition, to ensure consistency, the internal customer
cultural initiative which was called CustomerCare was
renamed “energy X expertise . . . its all about customer
care”. The external and internal brand was now completely
aligned.
To ensure an organisation wide and consistent approach to
the brand recovery a Brand committee was established and
chaired by the Head of Marketing and other members
included the CEO, GM Retail, GM Shared Services, Head of
Corporate Communications, Internal Communications
Manager, Call Centre Manager, Brand Manager and the
Sponsorship Manager. The recovery of the external brand
image commenced with the strategic use of customer insight.
ENERGEX regularly measured 20 brand attributes but now
with the increased emphasis on getting the consumer side of
alignment correct. ENERGEX now increased the
sophistication by asking their research company TNS to use
regression and correlation to determine the top four attributes
that were linked to brand perception at the time:
1 reliable supply of electricity;
2 well regarded in the community;
3 quick to fix; and
4 committed to customer service.
To ensure stakeholder engagement the same 20 attributes
were given to key government stakeholders and senior
executives. They were asked to rate the attributes in terms
of organisational priority given the current crisis and their
responses were collated. Their priorities strongly matched
customer priorities. All key stakeholders including customers,
executive and government were now aligned.
All marketing and PR activity was now designed around
communicating and reinforcing our performance against
these four key consumer attributes. To get around the
perception of spending too much money on advertising,
innovative media partnerships were developed between
ENERGEX and selected TV, radio and press partners.
Importantly, ENERGEX also stopped activity that did not
 Total customer engagement
Christopher Roberts and Frank Alpert
align with brand recovery such as promoting retail products
and certain sponsorship activity.
The external brand strategy was modified to reflect this and
the new positioning line that replaced energyXexpertise was
now “positive energy”. It was a clever ploy devised to make a
statement that despite all the negativity in the press,
ENERGEX was proactively powering ahead. The customer
experience statement was left unchanged and staff
communication clearly communicated that the principles
behind “energyXexpertise” were consistent with “positive
energy” and hence there was no need to change the customer
experience statement. Engaging the executive and the board
were key aspects of the strategy. As this was a critical issue the
board wanted to be educated and included in the brand
recovery journey. This was achieved via executive workshops
and a staged approach of endorsement by the board.
ENERGEX’s staff were already customer focussed making
them the easiest stakeholder to engage.
Brand health was measured via a TNS proprietary tool
called the brand index, a function of:
.
overall quality;
.
recommendation;
. continue to use; and
.
competitive advantage.
The results were spectacular and unprecedented in terms of
brand recovery. The brand index score, which had dropped to
56 at its lowest point placing us in the bottom 30 per cent of
utilities internationally, now rose to 70 which placed
ENERGEX in the top 25 per cent of international utilities.
According to the Y&R brand asset valuator the ENERGEX
brand was among the top three brands in the state and the
strongest energy brand in its market in Australia. The
customer satisfaction score, from customers that had a recent
interaction, increased from 3.6 out of 5 to 4.3 out of 5.
The key to the success was aligning brand, culture and
customer experience and engaging staff. In other words,
ensuring what was “said” was consistent with what was
“done”.
9. Conclusion
International research strongly supports the model:
.
A study in the UK attempted to look at the links between
brand, culture and shareholder returns. In an examination
of five year returns to shareholders, if the standard and
poor index ¼ 100, companies with high brand ratings
from consumers scored ¼ 160 and companies with high
brand ratings from both consumers and employees ¼ 320
(The Vivaldi Brand Leadership Study, 2002; as cited in
Woodcock and Starkey, 2005).
.
If an organisation without employee or staff engagement
performs at an engagement index of 1.0 then
organisations with high levels of employee or customer
engagement perform at 1.70 (Fleming and Asplund,
2007). However, organisations with high customer and
staff engagement perform at 3.40 (Fleming and Asplund,
2007).
.
The link between internal culture and customer
experience in inextricable. The customer experience is
typically a reflection of the internal culture. So if you have
a bland experience the organisation will typically have a
bland culture. In fact, 51 per cent of consumers state that
“outstanding service” is the number one reason they
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Volume 19 · Number 3 · 2010 · 198 –209
continue to do business with a company (RightNow
Technologies, Inc., 2007).
.
Additionally, when comparing companies with single-digit
growth rates to those with double-digit growth, those with
a double-digit rate have 39 per cent more employees who
are highly engaged – and 45 per cent less who are highly
disengaged (Hewitt Associates, 2004).
Considering the highly competitive and over-communicated
environment and an increasing sense of cynicism among
customers, organisations must focus on creating engaged
customers.
Best in class examples include Southwest where the focus is
on employees first, then customers and finally shareholders.
At Nordstrom staff are treated with respect and made to feel
important by being empowered; this then results in a great
customer experience as staff are trusted to do the right thing
(Spector and McCarthy, 1995).
The total engagement model and system provides a holistic
view which emphasises the importance of achieving clarity
and alignment between customer value proposition(s),
advertising, customer experience and culture. The proper
execution of the total engagement model is required to create
engaged customers for your brand as well as increasing
customer consideration, sales, loyalty and repurchase rates.
In summary, the key to developing engaged customers is to
develop a distinct and relevant customer value proposition,
communicate it consistently, engage your staff and deliver the
value proposition with memorable customer experiences.
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(accessed 16 December 2008).
 Total customer engagement
Christopher Roberts and Frank Alpert
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com/offer/etee/surveysummary.pdf (accessed 15 December
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Corresponding author
Christopher Roberts can be contacted at: chrisroberts@
engagedmarketing.com.au
Executive summary and implications for
managers and executives
This summary has been provided to allow managers and executives
a rapid appreciation of the content of the article. Those with a
particular interest in the topic covered may then read the article in
toto to take advantage of the more comprehensive description of the
research undertaken and its results to get the full benefit of the
material present.
Sustained success for business organisations becomes likelier
when they are able to turn casual or regular patrons into loyal
ones. Any company able to boast a larger proportion of such
customers has every chance of enjoying even stronger sales
and growth.
In addition to being faithful to the brand, engaged
customers actively encourage others to purchase the
products and services attached to it. The importance of
customer endorsement is widely recognised and certain
scholars claim that word-of-mouth (WOM) commendation
from these patrons can have a significantly greater impact on
target audiences than conventional media advertising. That
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engaged customers are also a source of valuable feedback and
are less likely to take grievances with the firm to external
bodies further illustrates their worth.
Scholars have pointed out a variety of external challenges as
justification for a changed approach to marketing. For
instance, rising commoditisation makes differentiation hard
to achieve and swift imitation by competitors ensures that
securing an advantage from new ideas is short lived at best.
Companies also face the problem of getting their message
heard among the multitude of advertising voices spanning a
variety of new media. Not surprisingly, message fatigue is a
growing concern too and devices that enable people to
completely opt out of advertising are an attractive proposition
to many. Scepticism about claims made by advertisers prevails
among those that remain and consumer power is furthered by
the ease in which information, feedback and reviews can be
accessed. Add the general mistrust of traditional marketing
channels and the environment becomes even more difficult.
Total customer engagement
Creating highly engaged customers should therefore be a
serious consideration for all company leaders. One suggestion
is to ensure appropriate planning of “key strategic elements”
that include:
.
Customer value proposition. What the organisation can offer
its customers.
.
Brand. What the company is and what it stands for.
.
Internal culture. This reflects what goals, values and
behaviours should be in place to ensure that employees
can consistently provide a quality service to the customer.
.
Customer experience. Reflects both the physical and
emotional aspects of what occurs during interactions
with the firm. The aim should be to deliver value in terms
of the functionality, price, image or innovation aspects of a
product or service.
The benefit of such elements is widely acknowledged but the
effect is much greater when they are properly aligned.
Unification of these key aspects improves the chance of the
company achieving harmony between its thoughts,
communications and deeds. This is important given that
discord between functional departments is the norm within
many organisations. With each having different motivations
and agendas, a damaging silo effect is virtually inevitable.
Brand and internal culture are regarded as especially
significant elements. For instance, the organisation should
consistently communicate the customer value proposition
through every aspect of its brand. And since employees deliver
brand promise, internal culture is equally important to ensure
that the workforce is dedicated to the cause. Understanding of
strategy and direction is higher among engaged employees,
who are also typically more productive, more committed and
more loyal. Effective collaboration between such employees
and engaged customers is another crucial ingredient of
longer-term growth and achievement.
Roberts and Alpert believe that creating engaged customers
involves executing four steps that correspond with the key
strategic elements. Firms should use:
.
customer insight to develop a value proposition that is
distinctive;
.
brand advertising to impart a consistent message about
the value proposition; and
.
committed employees to deliver a strategy they fully
comprehend and support.
 Total customer engagement
Christopher Roberts and Frank Alpert
As the whole is greater than the sum of its parts, achieving the
necessary alignment between these elements can help produce
a final step where the intended customer experience lives up
to promises made.
A failure to clearly define the key elements prevents some
companies from creating engaged customers. Others achieve
clarity but not alignment due to elements being designed
separately. Clear definition and alignment is characteristic of
better performing organisations and some go even further by
ensuring that the elements become an integral part of daily
routines and operations.
Internal challenges and solutions
A key survey has emphasised the growing link between
customer strategies and business success. Many organisations
are able to develop suitable strategies but fail to execute them
properly. A number of significant internal challenges must be
overcome for successful execution to materialise including:
.
Lack of shared customer-related goals. Different functional
areas such as marketing, sales and human resources are
driven by their own rather than unified objectives.
Separate ownership of key strategic elements is a related
issue.
.
Setting high enough satisfaction targets. In many cases, the
focus leads to bland, transactional-like experiences that
may not create engaged customers.
.
Vague relationship between satisfaction measures and financial
goals.
.
Poor knowledge of customer economics. This prevents the
impact of such as customer lifetime values and WOM
being accurately computed so that customer initiatives can
be justified.
.
Insufficient concentration on the emotional aspects of customer
experience. Research has shown the influence of these
elements to be crucial.
.
Unclear definition of customer experience. Companies need a
clear statement outlining the various physical and
emotional elements that might be incorporated. This
approach can enable customer experience to be better
planned, administered and evaluated.
.
Poor response to customer feedback. Even though most
organisations conduct satisfaction surveys, a much smaller
percentage act on what customers tell them.
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.
Lack of employee engagement. Companies overlook this vital
aspect and fail to realise that staff will only excel when
delivering the company strategy if they feel satisfied and
valued themselves.
Leadership is fundamental to the success of any total
customer engagement strategy and should be “customer
focused and prescriptive in nature”. Alternatively, key
stakeholders could step into the breach to ensure that the
right foundations are created. Those involved must:
.
Define engaged customers in relation to loyalty, share of
wallet and WOM to help create a customer economic
business case.
.
Appoint a program committee that includes members of
key functional areas and contains a mix of relevant
expertise.
.
Collectively design key strategic elements containing both
functional and emotional aspects. Functional area leaders
should be present during this stage.
.
Empower staff and involve them in the design and delivery
of initiatives aimed at creating engaged customers.
Encourage them to develop new ideas based on
customer feedback. Ensure they have the necessary
resources, skills and commitment. Sell the strategy to
employees using both rational and emotional reasons.
The importance of appropriate measurement is also pointed
out by Roberts and Alpert. In their view, customer
engagement should be rated in terms of “consideration,
recommendation and loyalty” with results being appropriate
to the operational level in question. Likewise, peers and
internal clients can measure how employees perform against
organisational values. The authors suggest exploiting
feedback to stimulate “inter-functional discussions”. A
system of recognition and rewards aligned to peer ratings
and compliance with organisational values is also
recommended.
Roberts and Alpert cite several examples of best practice
companies and include lengthier case studies to illustrate the
effect of total customer engagement.
(A précis of the article “Total customer engagement: designing and
aligning key strategic elements to achieve growth”. Supplied by
Marketing Consultants for Emerald.)