Midsize business

Customer engagement: one size does not fit all

Customer engagement is the process of interacting with prospective buyers to strengthen relationships and drive sales. Customer engagement can happen anywhere potential customers interact with your business: websites, social media, email, or text messaging. No matter the channel, customer engagement is essential for finding and building a customer base.

Coming up, we’ll cover the latest strategies, examples, tools, and metrics to help your business earn more repeat customers with effective customer engagement.

What is customer engagement?

Customer engagement refers to a business’s ability to deliver direct, personal messages to the right people at the right time. Whether it’s a chatbot greeting you on a landing page or a hand-written letter thanking you for a purchase, marketers can utilize this concept to optimize their customer experience and increase customer loyalty and customer retention.

“Customer engagement” and “customer satisfaction” are sometimes used interchangeably, but there are a few key differences between these concepts:

  1. Customer engagement (if it happens) occurs early in the customer journey, often at the first point of contact, whereas customer satisfaction is a result of customer engagement.
  2. Customer engagement reflects the quality of customer relationships across multiple touchpoints, unlike customer satisfaction which indicates how a customer feels after interacting with a brand.

Because of these differences, it’s important to measure these concepts using two distinct methods. We’ll explain how that’s done later on, but for now, you might be wondering why customer engagement is important in the first place.

Why is high customer engagement important for your business?

Savvy consumers are becoming more conscious about spending their money and don’t want to feel like just another transaction for a business. People are no longer shopping based just on need, location, price, or service—they’re looking for a more personal connection to a brand.

For example, the formerly tried-and-true method of capturing email addresses and offering a 10% off coupon might work to some degree. But while brands once saw clickthrough rates of about 5% , that has dwindled to .5%. Smart brands respond by personalizing their marketing communications to make consumers feel like human beings, not a data point on a spreadsheet. The result is authentic customer interactions that help you maintain a steady revenue stream.

Put it this way: customer engagement is like a friend who checks up on you no matter what, whereas cookie-cutter communication is like that friend who only calls when they want something from you.

Customer engagement might seem like a vague concept, but there are multiple ways to measure it, so you have a clear insight into your return on investment (ROI).

Five ways to measure customer engagement

There is no magic formula to evaluate customer engagement levels. Instead, it must be assessed through a few different metrics that, when viewed together, will give you a good idea of how engaged customers are.

1. Average time on site

Unlike pageviews, measuring how much time your audience spends on your site indicates how well you’ve held their attention and whether they stick around to explore what you have to offer.

2. Social media interaction

People scroll through social media at the speed of light these days. Knowing how often your audience shares your LinkedIn posts or comments on your Instagram ads is vital to understanding whether your followers are genuinely engaged or mindlessly scrolling.

3. Conversion rates

Some marketers like to brag about how many people view their content. Still, measuring conversion rates (how often prospects become paying customers) is the ultimate indicator of whether that content actually resonates with those viewers. Whether you measure click-throughs on an email campaign or Instagram ad, this metric is directly proportional to how engaged your audience is.

4. Repeat purchases or subscription renewals

If you have loyal customers who continually purchase your products, that’s a sure sign you’re staying top of mind. Accordingly, it’s important to assess your sales channels to determine which buyers are returning and which are new customers.

5. Customer referrals

Word of mouth beats any marketing strategy. When customers become evangelists for your brand, that’s a strong indicator of a well-engaged audience. You can measure customer referrals through a customer feedback survey (“How did you hear about us?”) or by giving current customers referral links to send to their friends.

Three customer engagement examples

1. Let chatbots handle marketing and customer support for you

Companies like Amazon have software that makes recommendations based on past purchases or search history. You can create a similar effect with a chatbot that can direct customers to specific products or let them know when something out of stock is available again.

Using behavioral data, your chatbot can help customers by offering a discount on a product she’s pursuing in real-time. While this is pure artificial intelligence behind the scenes, the shopper feels like the bot (and by extension, the brand behind it) understands her.

Skincare brand Hello Ava uses chatbots to provide customized skin care regimens for customers. After answering questions about skin type, allergies, and even environmental influences, website visitors are given a skincare profile and encouraged to pay $10 for a customized skin care consultation with product recommendations.

2. Own the offline conversation

With so much attention paid to digital marketing, it’s easy to overlook the opportunities for providing customers with an amazing experience offline.

Simply writing, “Thanks so much for your order!” on a card and signing is a simple yet personal touch to include in every order. Go Get ‘Em Tiger Coffee in LA does just that, and as a result, gets a lot of shares on Instagram.

It only takes a moment to add a personal touch like this. Just make sure order fulfillment employees add the thank you card to the inventory management and fulfillment process.

3. Leverage data for deals

Mobile marketing platforms can provide unique reporting data, like which customers saved a mobile wallet offer, clicked a text message coupon, or tapped a push notification. With that data, brands can create personalized offers that customers want. In fact, 47% of consumers are willing to share personal data in exchange for deals and better customer service.

For example, you can offer your customers a loyalty program they can sign up for at checkout. With sign-up, you can send customized offers based on their purchases as well as rewards for that accrue with additional purchases.

What are the benefits of improved customer engagement?

Of all the marketing strategies out there, you might be wondering whether investing in customer engagement is right for your business. Let’s look at a few ways it can boost your bottom line:

Reduced churn rate

Customer churn rate is the percentage of your customers who don’t return or renew during a given time. Actively nurturing relationships with customers through their preferred channels can reduce the likelihood of them leaving you for a competitor.

Shorter purchase cycles

Consumers are generally more likely to buy from brands they’re familiar with. But if they rarely—or never hear from you—selling can be an uphill battle. Consistent engagement makes consumers less defensive when you approach them with an offer, therefore shortening the purchase cycle.

Stronger brand identity

Every newsletter, tweet, blog post, or handwritten letter is an outlet to make your voice heard in a noisy world. Take a brand like Wendy’s, for example, whose daily snarky tweets have garnered them an audience of nearly 4 million people.

How to get started with your customer engagement strategy

While there isn’t a cookie-cutter template, there are a few general principles that apply when incorporating a customer engagement strategy into your business.

1. Define your target audience

Before you define your goal and a plan to get there, you first need to define who your potential customers are in the first place. Avoid general descriptors like “millennials” or “people who like coffee.” Instead, map out a buyer persona that states how they spend their time, what tone of voice resonates with them, and what their current purchasing habits are.

2. Analyze customer behavior across all customer engagement platforms

You can’t improve what you don’t measure. Accordingly, it’s important to study how audiences currently interact with your brand so you can drill down into what’s working and what’s not. This may involve tracking time spent on your website, what time of day customers are most active, or what type of social content gets the most engagement.

3. Clearly define your goals and corresponding KPIs

Once you’ve done your preliminary research, set specific, measurable, attainable, realistic, and timely (SMART) goals for your engagement strategy. For example, your goal might be to get more of your customers to advocate on your behalf, and in order to accomplish that you need to increase customer referrals by 25% this year.

4. Create an omnichannel engagement plan

Try to avoid putting all your eggs in one basket when it comes to engaging with customers. Instead, make sure you’re adding a personal touch to all of your digital properties. This will ensure that no matter how your audience finds you, they feel like a friend—not a number—every step of the way.

Final thoughts

Your customers are individuals, and they want to be treated as such. When you center your marketing messages on each customer, you communicate that you care about them and are paying attention to their preferences.

If you do your job well, they’ll be dedicated to your brand long-term. Even with thousands of customers, there are special touches you can add to your service that makes each one feel valued.

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