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Engaging the Public vs. Engaging Customers: What is the Difference?

Stakeholder Engagement +1

September 19, 2023

The Importance of Stakeholder Engagement

Stakeholder engagement is the process of actively involving stakeholders in an organisation's decision-making process. Stakeholders are any individuals or groups who have an interest in an organisation's activities, including customers, employees, suppliers, investors, and the public. In this blog post, we’ll be focusing on two key stakeholder groups for any organisation: The public and customers.

Stakeholder engagement is important for a number of reasons, no matter your stakeholder group. It helps organisations and their leadership teams to:

Better understand the needs and concerns of stakeholders.

This information can then be used to make better decisions that are more likely to be successful and serve the needs of those stakeholders. 

Build trust and relationships with stakeholders

Listening to your stakeholders is important not only for making better decisions but to build trust and consolidating relationships. This is important for maintaining a positive reputation and being better able to resolve  conflict. 

Identify and mitigate risks

By understanding the concerns of stakeholders, the organisation can take steps to address those concerns and avoid potential problems in the future.

Engaging the Public vs Customers: Key Differences

The people an organisation aims to connect with outside of its internal stakeholder pool fall into two main categories: the general public and its customers. While both are important, key differences exist in how to properly engage each group.

The public is a broader audience that may have a passing interest in your operations but isn't directly impacted by your products or services. Customers, meanwhile, experience a direct effect through their purchases.

Public interests tend to be general and impersonal - like your environmental impact. Customers care more about how a specific product affects them.

The public's relationship with you is indirect. They know your brand through ads and media coverage. But customers interact directly via support, feedback, and repeat purchases.

These differences influence how you should engage each group:

For the public, focus on raising awareness and sharing what you do in an open and transparent way. Respond to concerns and be accountable for your impact.

With customers, prioritise excellent service that meets their needs. Listen actively to their feedback and improve products based on that input to retain customers.

Prioritising Public Engagement or Customer Engagement

Not all organisations have equal needs to balance both public engagement and customer engagement strategies. Some primarily prioritise one over the other based on their core objectives and functions.

Public Engagement As Top Priority

Organisations that exist to serve a public good or social mission tend to prioritise public engagement over customer engagement. They include:

• Government agencies 

Their existence depends on public trust and voter/taxpayer support. Serving current "customers" like citizens and businesses is important but secondary to public perceptions and attitudes.

• Nonprofit organisations 

They rely on donors, volunteers and broader community goodwill for their sustainability. While they serve clients through programs, public attitudes towards their mission and impact matter most.

• Public institutions

Like schools, hospitals and museums. They exist to benefit society as a whole, so maintaining public legitimacy and broad support is very important for them.

• Regulated industries 

Such as banking, pharmaceuticals and utilities. They depend on positive public attitudes and trust to maintain their regulatory "social license". Serving customers well is important, but public perceptions shape their ability to operate.

These organisations prioritise public engagement strategies like transparency, advocacy, CSR and community investment because fulfilling their public-oriented goals and missions requires favourable attitudes from the general public.

Customer Engagement as Top Priority

In contrast, most for-profit businesses primarily exist to serve customers and generate revenue. So they prioritise customer engagement strategies, focused on:

• Meeting customer needs 

Through products, services and experiences tailored specifically for their target markets.

• Driving loyalty and retention

By forging personal connections, continually improving customer journeys and offering incentives.

• Increasing revenue and growth

Which depends first and foremost on satisfying and acquiring more customers.

While these companies also engage the public through communications, brand building and corporate social responsibility (CSR), their primary focus remains on directly serving and optimising value for their paying customer base.

The Need For An Integrated Approach: Understanding The Public And Your Customers

Take this example of an airline organisation. They have an impact not only on the people that buy from their organisation but the public outside of their organisation that they have a more indirect effect on. For the success of a brand and organisation, it’s vital that they take the thoughts, feelings and experiences of both groups into account in their decision-making processes, not only to ensure the continued financial success of their business but the public reputation of their business. 

Let’s look at how these two different stakeholder groups might be affected by the organisation’s decisions:

Public Stakeholders

Residents living near an airport are part of the public stakeholder group for an airline company. Though they do not directly purchase flights, they are impacted by the airport's operations through noise, traffic and environmental effects.

Residents experience the consequences of the airport's growth and increasing flight traffic. Issues like noise pollution from take-offs and landings, road congestion from passenger vehicles, and air pollution affect their quality of life. The success of the airline company and increasing demand for air travel can have both positive and negative effects on the local community.

Customer Stakeholders

Customers of an airline company are directly affected by the airline's services, as they use the flights to reach their travel destinations.

The airline customers book flights from the company, utilise the seats, in-flight services and amenities provided on the aircraft, and experience the punctuality, comfort and customer service first-hand. The success or failure of an individual flight has a direct impact on the customers travelling on that flight. They may also make purchase decisions based on the environmental impact of the organisation’s activities.

Effectively Engaging Both Stakeholder Groups

For effective stakeholder engagement, organisations should develop separate but coordinated strategies for the public and customers, tailored to the needs, motivations and desired outcomes of each stakeholder group. Both are important but require distinct approaches and priorities.

The Use of Focus Groups to Facilitate Stakeholder Engagement

Focus groups are a popular method of stakeholder engagement. They involve bringing together a small group of people to discuss a particular topic. This can be a good way to get feedback from the public or customers on a new product, service, or policy. Importantly, they provide in-depth, qualitative data that isn’t possible to attain through other methods of stakeholder engagement research.

There are a number of things to keep in mind when using focus groups to facilitate stakeholder engagement. 

Choose the right participants

It is important to choose the right participants for a focus group. The participants should be representative of the target audience or stakeholder group identified as the group from which you want to hear.

Have a clear agenda

It is important to have a clear agenda for any focus group. This will help to ensure that discussions are productive and there is limited side-tracking. 

Allow room for open-ended discussions

For the best qualitative data from a focus group, it’s best to position your questions in an open-ended way that allows personal interpretation by participants during a discussion. Avoid closed-ended questions that only allow for short or yes/no answers.

Focus group facilitation

It’s important to have a facilitator who is skilled at moderating focus groups. The facilitator should be able to keep the discussion on track and encourage everyone to participate. 

The Use Of Technology In Facilitating Focus Groups

Traditional focus groups have limitations for stakeholder research. Groups are typically small, making it hard to get a representative view of large stakeholder populations.

Focus groups average 8 to 10 participants, but large stakeholder groups can number in the hundreds or thousands. This likely means missing important perspectives and insights from the wider stakeholder pool.

Decisions based on a non-representative sample carry risks. But with AI and natural language processing platforms, organisations can gather input from much larger stakeholder audiences. Engaging more stakeholders, paired with effective sampling procedures to ensure representativeness, can go a long way to ensure that your research’s insights are sound and useful. 

Platforms like PSi automate online focus group facilitation through algorithms designed around social science principles of turn-taking and group participation. This allows thousands of stakeholders to jointly discuss issues in an equitable way.

Everyone has an equal voice while maintaining the depth of analysis that offline focus groups enable. By including larger and more representative samples of stakeholders, organisations can make more informed decisions with less risk.

AI-powered online focus groups offer a solution, allowing organisations to harness insights from their full stakeholder populations rather than a select few. This comprehensive view improves decision-making and outcomes for all.

But how does that happen? 

The PSi platform captures representative insights from large stakeholder groups through efficient virtual focus groups. Participants are divided into online discussion tables where they share and vote on ideas.

The highest-voted ideas from each round carry over to the next. Participants are randomly assigned to new tables to discuss those selected ideas plus any new ones. This process continues iteratively until one consensus response emerges with the most votes across all participants.

Natural language processing helps to surface qualitative insights from the discussions, such as summaries, opinion clusters and dialogue maps. Some insights come from people challenging each other’s viewpoints. These insights are only discoverable through real voice conversations and would not be discoverable by simply surveying the same people. Ideas rise or fall purely on their merit, after a process of discussion and argumentation. These insights enable truly deliberative decision-making that minimises risk for an organisation’s entire stakeholder base, regardless of group size.

The entire process takes under an hour, allowing for faster stakeholder research and informed, unbiased decisions. Participants anonymously share and discuss ideas without a facilitator, while the platform’s algorithm helps reduce common social biases (such as herding or groupthink) that are often observed in groups. 

Get in touch to book a PSi demo today!