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Determining the ROI of Customer Engagement Initiatives

How well is digital helping you improve customer engagement? Internet and mobile devices have helped firms come up with innovative customer engagement initiatives, such as mobile apps and online communities. Such customer initiatives can facilitate firm–customer interactions or interactions among customers. However, unlike traditional marketing interventions, which are designed to prompt sales, engagement initiatives are not meant to generate direct sales. Instead, their primary goal is to foster emotional and psychological bonds between customers and the firm. Thus, assessing returns on engagement initiatives (RoEI) is not straightforward and is further complicated because such initiatives are offered for free. Against this backdrop, a Journal of Marketing study not only shows that customer engagement initiatives indeed pay off, but also provides a framework any firm can use to quantify ROI of its engagement initiatives. The key idea behind the proposed framework is to use sales data of customers who adopt firm engagement initiatives and compare it with those who do not adopt.

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From: Manpreet Gill, Shrihari Sridhar, & Rajdeep Grewal,  “Return on Engagement Initiatives: A Study of a Business-to-Business Mobile App,” Journal of Marketing, 81 (July).

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