What is Customer Engagement?

When you think about customers, sometimes your main priority is whether or not they’re purchasing your products or services. That’s understandable. You are a business after all, and you do need customers to thrive. But focusing on the buying habits of your customers or even the customer experience with your company isn’t enough to really move into the realm of customer loyalty. 

Customer loyalty is a space where your customers are passionate about your brand, come directly to you first (without considering a competitor), and actively promote your products and services to their friends and family. So how do you reach this ideal zone of customer loyalty? One place to look at is customer engagement. Read on to learn more about customer engagement, what it looks like, why it matters, and some key examples. 

Customer Engagement Defined 

Customer engagement is an ongoing process of interactions and activities that create connections between a business and its customers. The goal is to build a relationship that leads to customers returning to the business again and again. The key concept at the heart of customer engagement is relationships. 

At its core, customer engagement is about creating an environment of trust and reliability. It is about understanding your customers and building relationships with them through a variety of channels. It’s connecting with your customers and remembering that your customers are more than the products they buy—they’re the people who power your company and keep your business running. They’re the reason you do what you do, so it’s important to have great relationships with them. 

What Does Customer Engagement Look Like?

So what does customer engagement look like? It’s one thing to know in the abstract that customer relationships are vital, but it’s another thing to understand what that means in practice. So let’s dive into what customer engagement actually looks like. 

When you begin looking at customer engagement, it helps to think about a few key concepts with your customers and how they interact with your brand: 

• How often do customers interact with your brand? 
• Are the interactions frequent or sporadic? Regular or irregular? 
• How proactive are customers with interacting with your brand? Do they come to you? 
• What is the context of your interactions? Do customers interact with you only when there’s a promotion or do they interact with you regularly? 

Thinking about these concepts reveals what kind of relationship your customers have with your company. But what does that really look like in practice? Customer engagement can be product-specific or on the higher level of interacting with your brand. It can be done offline and online. Here are some specific ways customers interact with brands in the wild that could be a part of customer engagement: 

Making a Complaint

Yes, really! When a customer makes a complaint, they’re opening an avenue of communication with your company, and they’re interacting with your brand—though in a negative way in this case. They might make a complaint directly to you, post it on your website, put it on social media, or put it on a third party website. If the customer cares enough to complain, you have an opportunity to interact with them in a positive way, help them solve the problem, and transform a bad situation into a positive relationship. 

Responding to Your Social Media

We live in the digital age of marketing, and you’re most likely to put a lot of your brand info online and on social media. Comments and messages are customer engagement. 

Participating in Loyalty Programs

Loyalty programs are often a decent sign of loyalty, right? There might be incentives to join a loyalty program, but if customers are prioritizing coming to your company, that’s engagement and a great sign. 

Contributing Ideas

Customer suggestions are an opening to a conversation. If they comment on a product that they’d love to see a product in blue or combine products into gift sets, they’re showing a preference for your company and looking to have a relationship with your brand. 

Using Your Customer Service

If a customer has a problem and uses your customer service, they’re engaged with interacting with you and with solving their problem alongside you. You also have a great opportunity to build a relationship with your customers by providing them with a great experience. 

Why Is Customer Engagement Important?

Customer engagement is about creating relationships and ultimately brand loyalty. And there’s research to back it up. In a pivotal 2010 study, researchers found that about two-thirds of a brand’s profits came from its customer engagement. So performing well as a business has a direct tie with customer engagement. There are a few other reasons why customer engagement is so important: 

Stronger and Healthier Customer Relationships

In the digital age, customer engagement is easier than ever before. You can put out touch points across a variety of channels to connect with customers and to connect with customers about more than just purchases. As you connect more with customers, you’ll find you can build stronger relationships and garner more loyal customers. 

Improved Customer Retention

Keeping customers around is much easier than finding new customers from scratch every product launch. Improving your customer retention by only 5% improves your profits by 25%. And customer engagement can help boost your customer retention because you’re building a genuine relationship with your customers. 

Better Opportunities to Up-sell

Up-sells can be a valuable tool for improving your profits and running your business. When you have a real relationship with your customers, you’re able to have an opportunity to up-sell your products. 

Increase in Subscribers

Subscribers are important in a world that requires digital involvement. Whether through email or social media, subscribers are the ones who get the word out for you. Building relationships with your customers helps you increase your subscriber base. 

Shorter Purchase Cycles

The purchase cycle can be long for some customers who are new to your company and looking specifically for a product to solve a problem. They have to deliberate over what would be the best solution, and that takes time. But when your customers have a relationship with you and go to your company first, you get shorter purchase cycles. 

More Brand Advocates

When customers trust your brand and have a relationship with you, they’re more likely to actively promote your brand and products without you ever asking them to. They just love your company and your products, and they’re not afraid to let people know. 

Recognizable Brand Identity

Your brand is one of the most important parts of your business. It’s how you show the world who you are. When you have relationships with your customers and they’re engaged with you, your brand becomes more recognizable and more distinguishable from the masses of companies out there. 

Enhanced Customer Service

When you’re engaged with your customers, you care more about their experience. As a result, you’re going to improve customer service because the individual interacting with your brand matters to you and your business. 

How to Measure Customer Engagement

There isn’t one end-all-be-all metric for knowing exactly how engaged your customers are. But when it comes to measuring customer engagement, there are a few key metrics that businesses should track. Here are some metrics that you can track to get a good idea of how your customer engagement looks: 

Average Time Spent on Your Website or on a Page

This is a key indicator of customer engagement. If customers spend a lot of time on your website or a specific page, it indicates that they find your content interesting and useful. However, it’s important to also consider the context — sometimes, high time spent can mean that users are having difficulty finding what they need.

Open and Click Through Rates for Emails

High email open rates indicate that your subject lines are compelling and that recipients are interested in your content. High click-through rates suggest that the content within the emails is engaging and effectively encourages users to take action.

Social Media Interaction (Likes, Comments, Shares)

These actions indicate that users are not only consuming your content but also interacting with it and sharing it within their networks. This type of customer engagement can help to extend your reach and increase your brand awareness.

Number of Form Fills When You Put Out a Form on Your Website

When customers fill out a form on your website, it shows a higher level of engagement and interest in your offerings. It also indicates their willingness to share personal information in exchange for value, such as a whitepaper, newsletter, or product demo.

Customer Referrals

If customers are referring others to your business, it’s a strong sign of customer satisfaction and loyalty. It shows that they have a positive view of your brand and trust your brand enough to recommend it to others.

Repeat Purchases (or Renewal Rate Depending on Your Product Model)

This metric shows the extent of customer loyalty. Customers who make repeat purchases or renew their subscriptions demonstrate satisfaction with your product or service.

Repeat Visit Frequency or How Regularly Customers Visit Your Website

Regular visits to your website are a good sign of customer engagement. This could be due to your compelling content, the utility of your product, or your ongoing customer relationship efforts.

Direct User Feedback From Forms, Comments, Emails, Calls, etc. 

Feedback via forms, comments, emails, or calls is a direct measure of customer engagement. Thes forms of customer engagement show that customers are invested enough in your product or service to spend time giving feedback.

Customer Loyalty

This is measured through repeat business, referrals, and customer feedback. High customer loyalty is a strong indicator of overall customer engagement.

Customer Satisfaction

Usually determined through surveys, this metric helps you understand whether your product or service meets or exceeds customer expectations. High satisfaction rates often correlate with high customer engagement.

Customer Effort

This metric measures how easy it is for customers to interact with your business. The easier it is for customers to find information, make a purchase, or get support, the more likely they are to stay engaged.

Sales

The most direct measure of customer engagement is sales. If customers are engaged, they are more likely to purchase your products or services.

Frequency of Contact From Customers

Frequent interactions with customers, such as calls, emails, or chats, indicate that customers are engaged and invested in your product or service.

Number of Subscribers

Whether it’s to your blog, newsletter, or YouTube channel, the number of subscribers your business has can indicate the level of interest and engagement customers feel with your brand.

Customer Reviews

Reviews are not just feedback; they also demonstrate customer engagement. Customers who take the time to leave a review are typically either very satisfied or dissatisfied, and both are valuable for your business to understand and improve.

All together, these metrics can paint a picture of how engaged customers are. 

Strategies to Improve Customer Engagement

There are several strategies that businesses can use to improve customer engagement. But here are a few strategies to improve customer engagement and begin connecting with customers and building relationships. 

Clearly Define Goals

If you don’t know where you’re going, it’s hard to get there. So a great way to reach your overall goal of improving customer engagement is to clearly define how you want to get there and to have smaller goals along the way. Set SMART goals and define metrics to help you know where you’re going and how you’ll know if you succeeded.

Invite Feedback

We’ve discussed how feedback is an opportunity for conversations and for you to begin building positive relationships with your customers. But how do you make sure you’re getting feedback from your customers? Well, one of the simplest ways is to invite feedback yourself. Include forms after product purchases, email surveys, social media opportunities, and any other channel for feedback that you can think of. 

Build Strategy Into UX/CX

To really work on your customer engagement, you will need to have strategies designed to target engagement. Most likely, you already have UX and/or CX plans in place where you begin interacting with customers as soon as they end up on your site. As you work on this plan, keep engagement in mind and build engagement strategies in from that first interaction. 

Offer Personalization in the Customer Journey

No two customers are exactly the same, so no two customer journeys are the same. When you create personalization opportunities, you can guide your customers toward what will really matter to them. That does two things for you: helps your customers find products from you that they’ll love and helps them feel that you care about them.  

Consider a Rewards Program

Implementing a customer rewards program can significantly enhance both customer engagement and loyalty. A well-structured rewards program provides incentives for customers to interact more frequently with the brand and its products or services, thereby driving engagement. By rewarding customers for their purchases, reviews, referrals, or other forms of interaction, businesses can encourage repeat behaviors that foster deeper connections.

Remember the Human Connection

The basis for good customer engagement is customer relationships. To have real relationships with your customers, you need to make sure that you remember the human connection and show your customers that you care about them. It’s important to be genuine and to really be focusing on the relationships rather than just selling products and services. 

Examples of Brands with Great Customer Engagement

Apple

Apple’s product launches are anticipated by millions worldwide, and their customers are deeply engaged with the brand, often forming long lines outside stores on launch days. Apple has cultivated a strong brand community that feels a sense of ownership and engagement, often seen through user-generated content, online discussions, and reviews.

Netflix

Netflix has mastered the art of customer engagement. Their recommendation algorithm engages viewers by suggesting content based on their viewing history. They also maintain a strong social media presence, creating dialogues with their audience about popular shows and films. Their user interface is designed to keep viewers hooked, encouraging binge-watching.

Starbucks

Starbucks’ rewards program is a prime example of an effective customer engagement strategy. By offering perks like free drinks, birthday rewards, and order ahead services, Starbucks incentivizes customers to continually engage with their brand. They also maintain active social media channels where they interact with customers and post engaging content.

Nike

Nike is well-known for its engaging marketing campaigns like the “Just Do It” campaign. They’ve also developed a successful online community with their Nike+ app, which provides a platform for users to track their fitness goals and progress, share their achievements on social media, and engage with other community members.

Lego

Lego has an impressive customer engagement strategy, which includes a successful VIP program, interactive retail stores, user-generated content campaigns, and even a product line (Lego Ideas) that is built on customer suggestions.

Amazon

Amazon’s customer engagement is multifaceted, ranging from personalized product recommendations to an easy-to-use interface, and a robust review system that encourages customer interaction. Their Prime membership program also offers several benefits that increase customer engagement, such as faster shipping and access to exclusive content.

Spotify

Spotify’s Discover Weekly and Daily Mix playlists are excellent examples of personalized customer engagement. By providing users with curated music selections based on their listening habits, Spotify keeps users engaged and coming back for more.

 

Improve Your Customer Engagement with Pearl-Plaza

Customer engagement is an important process for businesses to build relationships with their customers and foster loyalty. It involves understanding customer needs and preferences and delivering products and services to meet those needs. There are many strategies and tools businesses can use to improve customer engagement, such as surveys, focus groups, loyalty programs, customer reviews, and analytics tools. Additionally, businesses should focus on creating an enjoyable customer experience and staying in touch with customers. But how do you go about improving your customer engagement?

Pearl-Plaza’s customer experience improvement platform, the XI Platform, can play a pivotal role in enhancing customer engagement for businesses. It allows businesses to capture, analyze, and respond to customer feedback from a myriad of touchpoints, providing them with a deeper understanding of their customers’ needs and experiences.

Watch this webinar about more customer engagement strategies to continue learning more!