From Return on Investment to Return on Engagement


8 February 2011 Grant Leboff


Grant Leboff presents an extract from his new book Sticky Marketing.


In the technological world, one of the scarcest resources available is customer attention. The demands of modern life, with emails, texts, phone calls, social networks, 24-hour news, a multitude of television channels and a plethora of websites all available at any place and any time, mean that getting customers to take notice of you is extremely difficult. Of course, this means that it is equally challenging for everyone else, including your competitors. Once you have your customers' and potential customers' attention, you are much more likely to win their business at the appropriate time.

The battle in the marketplace is no longer for transactions, it is for attention. Quite simply, those companies with customer attention win. Therefore, we need to replace the old model of marketing, which was measured by ROI (return on investment), with a new model based on ROE (return on engagement). For, if you are engaging with your audience, it means that you have their attention and, ultimately, this will lead to business growth.

The inverted marketing funnel

The customer engagement model of marketing is a complete reversal of the traditional funnel. In fact, we turn the funnel 180° so that it is completely on its head. What you are left with is the narrow spout at the top with the wide base at the bottom.

The narrow spout represents where prospects start engaging with us. We are no longer going to shout at them, for example by sending out 100,000 emails. Instead, they are going to come to us. It is far more likely that prospects will come to us; one, five, or ten at a time. It is extremely unlikely that we will be approached by 100,000 people at once. Therefore, the spout at the top is very narrow, representing the far fewer prospects with whom we begin to engage at any one time. Once a prospect has, metaphorically, raised their hand and indicated that they would like to engage with us, they drop through the narrow spout into the wider base. In an ideal world, this base continues to grow wider and wider.

"In the technological world, one of the scarcest resources available is customer attention."

The reason the wide base is forever expanding is because, unlike the traditional funnel, we are not interested in qualifying anybody out. The scarcest resource for businesses today is customer attention. Those companies with the attention of their potential customers win. Therefore, the more attention we have, the better. Marketing today requires us to keep as many people engaged as possible.

Firstly, the more people we have engaged, the more customers we will eventually acquire. For example, if over time you ascertain that, statistically, 15% of your engaged audience buy, then, of course, 15% of 100 engaged prospects is a lot fewer than 15% of 1,000. Secondly, people will engage with your business only if they are receiving value. Even if they do not become paying customers, some of these prospects will tell others about your company. Although many of your engaged audience will not be customers, some of them will be responsible for attracting new prospects and, therefore, delivering new customers and growing your business.

Breaking the communication barrier

The cost of engagement before the ubiquity of modern technology would have been prohibitively high. Attempting to give value and stay in contact with potentially thousands of people would have been beyond what most companies could sensibly afford. Concentrating on transactions was the only option open to most businesses. However, using all aspects of modern communications, distribution and advanced customer relationship management tools means that even the smallest business can engage with potentially millions of prospects at negligible cost.

"The cost of engagement before the ubiquity of modern technology would have been prohibitively high."

In fact, not only does the customer engagement model of marketing not require prospects to be qualified out of the funnel, but ideally, no prospect or customer would ever leave. Thus, the base would become increasingly wide. Of course, there will be natural attrition. In a business-to-consumer scenario, customers move away and disappear. In business-to-business, companies merge, are bought out and go bust. However, aside from this natural attrition, ideally a business will give enough ongoing value to keep all its prospects engaged.

This can be monitored. For example, website analytics packages can be used in order to track who visits your website, where they come from, what they look at and for how long etc. Meanwhile, services that monitor and alert you to online conversations involving your business, and your market, will allow you to track the reactions your company receives to the activities it undertakes. It will also allow your business to respond to the comments being made. In addition, customer relationship management software enables you to keep a detailed history of any interactions made directly with a customer. In so doing, you will gain insights as to how you will be able to offer and provide further value in the future.

If a company identifies that there is a certain point in their journey when people leave, then it would be required to do everything it can to prevent this from happening in the future. By asking consumers, a company should be able to realise why it is no longer able to provide value at this juncture, and then do its best to rectify this situation.

This is an exclusive extract for CEO from Grant Leboff's new book Sticky Marketing, published by Kogan Page.