What is Customer Engagement?

Customer engagement is the way brands build a customer-to-business relationship via meaningful interactions along the customer journey. It begins as soon as the customer first interacts with your brand and goes a long way even post-purchase. These interactions can take place on a number of channels and help in strengthening the customer-business terms. Customers begin with brand awareness via social media and digital channels.

The consumer content on social media websites, articles, and guest posts. Once the marketing campaigns reach the desired audience, it creates a potential for their engagement with your brand as they buy products and resonate with your brand via emotional bond.

For any business owner, fostering customer loyalty is a priority. They look forward to building strong customer relationships. The base of which lies with how well a brand conveys what value it holds to the customers. A well-curated interaction and engagement strategy forms the basis of a long-lasting business customer relationship.

What is the importance of customer engagement?

Strong customer relationships and engagement are critical to the growth and success of your business. Customer engagement and brand building are crucial as they help with:

Customer Acquisition Costs

The costs that a company bears for acquiring new customers can sometimes be higher than the cost of retaining customers that are currently attached to your brand. Correct customer engagement tactics can go beyond a customer’s initial interaction via purchase with your brand. They can help reduce churn rates and turn ongoing customers into repeat customers.

Brand Awareness

Customer engagement is critical for e-commerce businesses so that they can effectively reach the desired audience that can turn into potential buyers in the long run. Strong and responsive customer support and rapid resolution of customer issues, even via social channels, can derive engagement. Customers who are quickly dealt with and get answers to their ongoing queries and issues are more likely to get back to the brand due to responsiveness.

Loyalty

Customer engagement brings in customer loyalty via emotional bonding and brand attachment. Loyal customers can expand your customer base by word of mouth and recommending your products/services to others.

Improved customer experience

Customer engagement helps to improve customer experience and satisfaction. Maintaining a staunch customer relationship involves optimization of every point of contact between the customer and your brand. This is inclusive of user-friendly apps, websites, customer interaction, and marketing strategies that truly bring customer engagement.

Strategic decision-making

When strong customer engagement strategies are employed in the organization or brand, it leads to behavioral understanding and usage patterns. This in turn allows ease of access to insights on what is trending, what features are well-liked about your brand, and what is lagging in your product/services that you are offering. Through a history and record of real-time customer usage insights, it gets easier to make decisions and choose what best suits the customer to enhance engagement.

How to build a strong customer engagement strategy?

Brand building and customer engagement are two sides of the same coin. When done right, customer engagement can reap benefits in a myriad of ways. Here are some tips to increase customer engagement:

Understand your audience better.

The foundation of developing messaging and creativity is to have a multi-dimensional view of your audience. Know who your audience is, not just demographically, and how they use your product. This will make you know and understand how best to drive more customer engagement with your brand.

Provide value at every touchpoint.

It may be vital for brands to get innovative with their ad structures and provide enriched experiences to please and motivate buyers. A recent study revealed that 55% of shoppers like to engage with ads through clicking on links to purchase products directly, playing along at home, and participating in sweepstakes. Also, 55% of shoppers indicated they want to experience brands woven into the content they’re viewing in imaginative ways. This indicates that viewers are ready for new and innovative approaches that brands weave their messaging into content.

Measure and optimize.

Utilize data and analytics to determine what is working and what’s not, and come up with innovative methods to iterate accordingly. Anticipate customer needs and behavior using a range of automation tools like chatbots and customer relationship management (CRM) software to gather and analyze engagement data.

Customer data doesn’t only enable you to put out fires, it can also warn you of something that consumers may love and offer greater personalization. According to purchasing history, for instance, you can text or email a customer about a new item they wind up adoring. Additionally, employing customer engagement analytics to delight customers tends to result in higher brand loyalty.

Utilize social media and other channels.

Leverage social media and other channels in your customer engagement strategy. Some of the ways you can engage customers on social media include

• Responding to customer comments and direct messages
• Creating shareable content that incorporates GIFs, polls, and contests

Apart from social media, you can gauge customer engagement on other channels like mobile messaging and community forums.

Engage support interactions.

Agents can engage in support interactions using new messaging capabilities. Messaging platforms enable you to communicate directly with your customers and offer rich and interactive capabilities such as

• Live chat capability that enables you to direct customers to help resolve problems or locate what they are searching for
• 24/7 support and automation that includes an extra layer of human touch
• A single platform that enables you to view messaging conversations in one location so you can reply to customers personally and promptly.

What are some metrics to measure customer engagement?

Different metrics can be deployed to comprehend how well your customers are perceiving your product. There are some ways to help you understand customer engagement in an easier way and gauge strategies to enhance it further.

Average Order Value

It is the measure of the average amount customers spend when buying a product/service. This number represents what customers can spend when shopping with your brand. Repeat customers are likely to spend seven times more than one-time or new shoppers.

The higher this metric goes, the more it means that repeat customers are buying from your brand. If there is higher engagement, it means your strategies are well-worked and good to continue.

Repeat Purchase Rate

It is the percentage of customers who have bought more than once from your brand in a given time span. This shows how good your customer engagement strategies are.   For the calculation of this rate, you can divide the number of customers who made more than 1 purchase over the set time span by the total number of customers in the same time period.

Newsletter Open Rate

Email marketing metrics are difficult to gauge customer engagement. This is primarily due to the fact that email marketing usually consists of several campaigns being sent to diverse, segmented customer databases. To gauge customer engagement with your email marketing, it is best to concentrate your metrics on a single campaign being sent to the majority of your contacts.

Newsletters are the way to go—particularly if you’re sending old-school, content-led newsletters rather than sales-driven ones. Beyond that, you’re able to glean information from open and click-through rates on a daily, weekly, or monthly basis.

Net Promoter Score

It is a considerable metric to measure customer loyalty and how likely it is that the customers will recommend your brand to others. Regular surveys can help to know this metric. You can ask customers to rate their experience with your brand on a scale of 1-10.

Example

For instance, you can ask them, how likely would you recommend us to a friend on a scale of 1-10? You can also ask how well their experience was with your brand. This can help in gauging what your brand means to them.

What are some examples of customer engagement?

Glossier, a direct-to-consumer beauty brand, used social media platforms to create a robust customer engagement approach. The brand prompted customers to share their experiences and photos with Glossier products, highlighting user-generated content (UGC) on the website and social media platforms.

Key Strategies:

Social Media Contests: Glossier organized contests and giveaways, inviting customers to post their favorite product moments and mention the brand.

Influencer Collaborations: Glossier partnered with social media influencers and brand ambassadors to market products and share their own stories.

Interactive Content: The company developed interactive content, including polls, quizzes, and “ask me anything” sessions, to interact with customers and collect feedback.

Results:

Brand loyalty increased: Glossier’s customer engagement strategy enabled the development of a loyal customer base that felt a sense of belonging to the brand.

Increased conversion rates: The brand experienced a boost in sales, fueled by the authenticity and social proof of UGC and influencer collaborations.

Invaluable customer insights: Glossier obtained valuable customer insights and feedback, which guided product development and marketing efforts.

Through social media and UGC, Glossier developed a customer engagement strategy that fueled brand loyalty, conversions, and expansion.

Another example:

Spotify frequently makes individualized value propositions to its users by sending them individualized playlists on a regular basis based on their listening behavior. Spotify will frequently customize the titles of these playlists as well, for example, “Only You.” If the user’s name is Tim, they might name the playlist “Made for Tim.”

Nike

Nike’s customer engagement strategy stands out because its membership club apps, Nike Run Club and Nike Training Club, are aimed at assisting users in achieving their goals. Nike also has a special Nike Membership program offering members-only products, free shipping on products, exclusive offers and promotions, and more.

Nike has a consistent brand voice and provides great-quality resources across all of its channels. Nike continues to add value and thank repeat purchasers so that it may actively construct brand loyalty.

Example of Starbucks

Starbucks is a promising people’s brand that focuses on its customers and their well-being. Their values involve inclusion, community building, and opportunity for growth. As an example, Starbucks realizes that 1 in every four Americans has a disability, and making it an area of focus, the company is testing and designing scalability to offer inclusivity for all. These initiatives are viewed as customer-friendly and all-inclusive, thereby attracting more people and enhancing brand reputation.

What are the challenges in customer engagement for a business?

As a part of customer engagement, businesses are likely to face numerous challenges in the process. Here we have highlighted some challenges for your ease.

Data Security

Customer engagement comes with the risk of data leakage, and customers are often concerned about it. To improve their services, firms often collect customer data to understand their needs and preferences. This in turn creates a sense of worry among customers about how long the organization will keep their data and how it will be used. Thus, achieving a balance between customer data and engagement remains a challenge.

Longer than usual response time

Prolonged waiting hours in case of queries can create customer dissatisfaction and frustration. When firms fail to cope with increasing customer needs and resolution of challenges they might be facing, it poses a risk to customer engagement and brand repute in the dynamic market.

Ineffective automation

Building trust and loyalty with customers can be very complex as self-service chatbots have become a norm. When human touch and human-to-human interaction are lost, it creates hurdles of incompetence that the firm may miss dealing with, with customers posing a challenge.

Zero personalization

When customers feel they are being treated just as a number, they are likely to churn and stop buying from your brand. According to research, almost two-thirds of customers expect companies to tailor changes to features and products based on customer needs. High volumes of customers in a thriving business can pose challenges of personalization for such a high number of customers.