What is Customer Engagement?
At its core, customer engagement fosters meaningful relationships between a brand and its customers that extend beyond one-off transactions. Authentic engagement is built on trust, mutual respect, and shared values between the company and the consumer.
Engagement requires brands to nurture enduring bonds with their customers through continuous, value-adding interactions across channels. The goal is to establish an emotional connection rooted in affection and loyalty rather than just financial exchange.
A customer engagement strategy necessitates an organization-centric mindset – a laser focus on understanding and meeting customers’ needs at each touchpoint. It means embedding customers into a brand’s culture and priorities rather than viewing them as external entities.
- Investing in digital customer engagement leads to significant revenue increases. Companies saw an average 90% rise in revenue from digital engagement investments (Source)
- Engaged customers generate more revenue and have higher lifetime value. They yield 51% more revenue than disengaged customers and spend 23% more over their lifetime (Source)
- Personalization and omnichannel engagement boost revenue. 86% of consumers say personalized experiences increase loyalty, and omnichannel engagement drives a 9.5% annual revenue rise versus 3.4% for others (Source)
- Automation is on the rise. Nearly 40% of customer interactions will be automated by 2023 using AI and machine learning (Source)
- Consumers want better experiences and more control. 66% will quit a brand without personalization, 95% want more data control, and 91% say relevant offers influence purchases (Source)
- Brands struggle to deliver personalized experiences. 46% of brands think they deliver excellent personalization, but only 15% of consumers agree (Source)
- Privacy and security are top challenges. 42% of brands say balancing security and experience is their top challenge. and 98% of consumers want brands to guarantee privacy (Source)
Powerful customer engagement strategies involve identifying where brand and consumer interests align and providing recurring opportunities to reinforce these shared values through content, experiences, and community-building. Done right, customer engagement becomes an invaluable competitive asset – bolstering marketing efforts, driving referrals, and cementing lasting relationships.
Transparency and Open Communication Are Key
Brand transparency in how brands operate and communicate is the foundation of strong customer engagement. Customers want honesty about products, business practices, values, and anything else material to make an informed decision. Deceptive marketing undermines trust and crumbles engagement. Brands must have integrity in their messaging and welcome constructive feedback.
Be transparent in operating and communicating, welcoming customer feedback to build trust and loyalty. This is critical when creating a customer engagement plan.
Take Patagonia’s commitment to transparency is reflected in bluntly communicating environmental issues affecting its industry while inviting customer input on its practices. This candor breeds loyalty even when customers disagree.
Shared Values Must Align
Robust engagement only happens when customers and brands align on values and priorities. If a disconnect exists, engagement efforts flounder. Brands earn attention by living their values consistently and supporting causes customers care about.
TOMS Shoes built its brand around the core value of helping children in need – every purchase directly supports this mission. This value alignment makes TOMS devotees not just customers but advocates.
Align your brand values with those of your customers to create a deeper connection and turn them into advocates.
Proactive, Ongoing Interactions Are Essential
Engagement requires continuous, multi-channel interactions – not just during transactions. Leading brands engage across websites, social media, online communities, events, etc. They go beyond responding to actively anticipate needs and provide solutions before being asked.
Take Starbucks’ My Starbucks Rewards program – members earn stars for purchases but also by interacting with the brand via their app, emails, and in-store experiences. These ongoing touchpoints keep customers engaged between store visits.
Salesforce’s online community, Salesforce Trailblazer Community, taps user insights to improve products while providing peer knowledge sharing and support. This always-on forum molded Salesforce into a customer-driven juggernaut, with users co-creating the brand experience.
The bottom line is that a customer engagement strategy means embedding customers into a brand’s culture and priorities. Done right, it forges lasting relationships, amplifying marketing and fueling referrals. Brands like Duolingo engage users through bite-sized mobile lessons and incentives, shaping a sticky habit. This engagement catapulted Duolingo’s growth entirely via word-of-mouth.
Engage continuously across multiple channels, anticipating customer needs and providing solutions proactively.
Why is Customer Engagement Important?
Most brands lack the cult-like gravity of Apple or Amazon to keep customers orbiting without effort. For everyone else, fostering a strong customer engagement strategy is essential to stand out and thrive.
| Description | Impact | |
|---|---|---|
| Engagement Drives Revenue and Loyalty | Investing in customer engagement initiatives leads to higher sales, repeat business, and loyalty. Engaged customers deliver significantly higher revenue compared to less connected customers. | Increased revenue and customer retention. |
| Disengagement Repels Customers | Customers who are disengaged tend to stop doing business with brands that fail to deliver satisfactory experiences. | Loss of customers and potential revenue. |
| Brand Engagement Creates Emotional Bonds and Advocacy | An effective customer engagement strategy fosters an emotional bond between the customer and the brand, leading to word-of-mouth advocacy and a sense of community. | Enhanced brand loyalty and customer advocacy. |
Engagement Drives Revenue and Loyalty
The numbers speak for themselves – investing in customer engagement initiatives directly translates to more robust sales, repeat business, and loyalty. According to Gallup, customers who feel fully engaged with a brand deliver 23% higher revenue on average than less emotionally connected customers.
Additionally, brands adept at customer engagement retain 91% of their customers year-over-year, whereas brands with poor engagement hold onto just 33%. The revenue impact and retention differences are staggering.
Starbucks’ wildly successful My Starbucks Rewards program is a case study driving engagement between store visits to boost purchase frequency and ticket size. Enrolled members contribute nearly 40% of Starbucks’ total sales – an astonishing figure powered entirely by engagement techniques like earnable stars, special perks, and personalization through the app.
The data paints a clear picture – customers who feel engaged with brands repay that commitment with expanded loyalty and wallet share. For financially driven brands, dedicating resources to nail customer engagement swiftly pays for itself through measurable sales, retention, and lifetime value gains.
Disengagement Repels Customers
While engagement cements loyalty, disengagement has the equal yet opposite effect – activating customer defection. The numbers are sobering. An astounding 96% of customers report they will halt business with brands that repeatedly fail to deliver satisfactory experiences.
Wells Fargo’s massive fake accounts scandal provides a cautionary tale of how breached customer trust decimates engagement. After the bombshell revelation, Wells Fargo suffered a customer exodus of over 10%, representing billions in deposits. Their brand reputation still struggles to recover years later.
The takeaway is clear – disengaged customers don’t just spend less; they actively flee brands, eroding trust through poor practices. For companies like Wells Fargo, the road back from alienating customers through disengagement is long and arduous, if possible at all. Sustaining strong engagement is infinitely easier than recapturing it once lost.
Brand Engagement Creates Emotional Bonds and Advocacy
A customer engagement strategy is powerful because it fits fundamental human needs for belonging and community. When done right, engagement fosters an emotional bond between customer and brand, transcending transactional interactions.
Engaged customers become invested in the brand’s success and willingly promote it to others through word-of-mouth advocacy and social sharing. They effectively become voluntary brand evangelists driven by affinity rather than compensation.
Brands like Peloton and Yeti have cultivated zealous fanbases by crafting engaging experiences across digital, social, and real-world channels. Their communities feel a genuine connection, not just to products, but to the brands’ cultures and values. This emotional stickiness cannot be overstated.
A customer engagement plan can create echoes of community and tribe. Customers fulfilled through engagement repay brands with heightened loyalty, share of wallet, referrals, and goodwill during challenging times. As competition reaches saturation, designing for engagement is no longer optional but essential to growth. Brands that consistently engage customers reap game-changing benefits – from resilient loyalty to vocal brand evangelism.
5 Steps to Build a Customer Engagement Strategy
The foundation for any successful customer engagement strategy is understanding who your customers truly are. Before activating any tactics, brands must invest time upfront, deeply researching and mapping specific audience segments, and their needs, pain points, and motivations. The two keys here are journey mapping and persona development. Done right, these exercises provide invaluable context for resonating with customers in authentic, tailored ways across touchpoints.
This section will explore recommended approaches to gain comprehensive insight into the changing dynamics of the customer lifecycle. With customer empathy as the compass, brands can chart an engagement course aligned to how people behave, think, and feel at each interaction with your brand. The more thoroughly brands internalize the customer perspective through data-driven personas and journey models, the more effective engagement initiatives will be.
1. Understand Your Customers
To activate effective engagement, brands must dedicate time upfront to comprehensively research and map the end-to-end experience from their customers’ point of view. This requires identifying customers’ functional steps and the changing emotions and pain points shaping their journey. Two critical frameworks for gaining customer empathy are journey mapping and persona development.
Map Out the Customer Journey
Journey mapping examines the entire customer lifecycle from initial brand awareness to post-purchase service and support. The goal is to identify critical milestones, motivators, questions, emotions, and pain points shaping your audience’s experience. This provides context for aligning touchpoints and engagement initiatives to the most important moments.
For example, a home services company could map the customer journey to reveal frustration, finding service providers dominate the initial research phase. This insight would justify investing in content and tools, easing the discovery process. Or identify post-purchase support gaps causing uncertainty that dents satisfaction if mapped. Journey mapping illuminates struggles customers silently endure.
Create Customer Personas
While journey maps examine touchpoints, personas profile the customers themselves. Develop hypothetical archetypes representing your core segments. Give them names, attributes, goals, and values real data defines. Fleshed-out personas humanize audiences, exposing their unmet needs.
An outdoor retailer could develop personas like “Weekend Warrior Wendy” or “City Explorer Caleb” based on purchase history, demographics, psychographics, and other attributes. This level of specificity helps ensure messaging and experiences resonate.
Invest time in researching and mapping your customers’ journey and developing personas to understand their needs and motivations.
With journey maps and personas guiding strategy, brands gain the customer intelligence essential for engagement initiatives that deliver relevance, connection, and value. There are no shortcuts – dedicating time upfront wins long-term loyalty downstream. Keep the customer front and center.
2. Set Goals and Metrics
Once brands gain customer insight through journey mapping and personas, the next imperative is defining goals and metrics to gauge engagement efforts. Too often, brands jump into activating tactics without strategic alignment on what success looks like and how it will be measured. This risks wasted energy and muddled results.
After researching customers, brands must establish strategic goals and metrics guiding engagement plans to maximize effectiveness and ROI. Well-defined success indicators focused on customer behaviors ensure efforts stay aligned with business priorities while enabling data-driven optimization, analysis, and reporting.
Define clear, customer-focused goals and metrics to measure the success of your engagement efforts.
Identify Strategic Goals
Start by identifying specific overarching goals your engagement strategy aims to accomplish. Common objectives are increased customer lifetime value, higher retention rates, expanded share of wallet, boosted referrals, and repeat purchase frequency. Goals should be S.M.A.R.T. – specific, measurable, achievable, relevant, and time-bound. This strategic alignment focuses efforts on outcomes that matter.
For example, a software company could set a goal of increasing customer renewal rates by 15% year-over-year through ramped-up engagement initiatives. This goal drives strategy, resources, and measurement in a quantifiable direction.
Define Customer-Centric Metrics
Next, define performance metrics focusing specifically on customer behaviors aligned to goals. Look beyond vanity metrics like social media followers or website clicks. Instead, track indicators tied to financial impact – repeat sales, retention, referral rates, recency and frequency, and customer lifetime value.
Our software company would track renewal rates over time and metrics like enrollment in customer communities. This data proves engagement’s business contribution.
Establishing clear goals and customer-focused metrics are the first steps in any engagement plan. With these guardrails, brands can purposefully activate initiatives and optimize based on what engages audiences and drives ROI.
3. Build Omnichannel Experiences
Meaningful engagement requires brands to connect with customers across channels and devices. Piecemeal, siloed experiences no longer suffice. To drive loyalty, retention, and referral, brands must adopt integrated omnichannel strategies tailored to how different audiences consume information and shop.
Rather than optimizing isolated channels, brands seeking deeper engagement must adopt integrated omnichannel strategies. This means crafting seamless, consistent experiences optimized for how different audiences research, purchase, and engage across devices and platforms.
Create seamless, personalized experiences across all channels and devices where your customers are present. A customer engagement strategy should always be omnichannel.
Meet Customers Where They Are
The first step in omnichannel engagement is understanding your audience’s media consumption habits across digital and real-world channels. Conduct research to identify the platforms and touchpoints customers predominantly use for discovery, research, purchasing, and support.
Then, look to build coordinated engagement strategies that meet audiences on the channels they already frequent and gravitate towards. Trying to dictate platform preferences is ineffective – engaging with convenience on their terms is crucial.
This requires seamlessly integrating messaging, campaigns, content, and experiences across email, mobile apps, social media, websites, and brick-and-mortar platforms. For example, an athletic apparel brand could amplify its email campaigns through coordinated social media content and in-store displays centered on the same seasonal launch theme.
Personalize Across Channels
The key to an effective customer engagement strategy is using data to deliver personalized experiences tailored to individuals as they move between channels. This requires brands to connect their data architectures to build unified customer profiles, segment audiences based on attributes, and track behaviors consistently across touchpoints.
Robust profiling makes it possible to tailor content, product recommendations, special offers, and messaging dynamically based on someone’s interests, history, and habits wherever they engage. For example, personalized product suggestions on a website can draw from the customer’s recent email clicks and purchases. Or cart abandonment reminders can be triggered via text message if someone previously provided their mobile number at checkout.
The more silos brands can remove to personalize intelligently across channels, the stronger engagement and conversion become.
Make Mobile a Priority
Mobile represents the fast-growing focal point for digital engagement today. With consumers spending more time on smartphones and tablets, brands must make mobile optimization a pillar of their omnichannel approach.
This means designing seamless mobile experiences through responsive sites, simplified navigation, one-click actions, and wallet integrations. Developing robust mobile apps with exclusive features and convenient account management functionalities is also important. Other tactics include leveraging SMS marketing for alerts and promotions based on opt-in preferences and integrating messaging across platforms like WhatsApp.
Mobile personalization should anchor the omnichannel mix to engage audiences on the go.
4. Focus on Value, Not Transactions
In an increasingly commoditized marketplace, brands can no longer rely on product or price alone to attract and keep customers. The path to enduring loyalty and retention lies in shifting focus from maximizing transactions to consistently delivering exceptional experiences and value at every touchpoint.
While necessary, sales transactions alone no longer build loyalty. To earn emotional bonds and advocacy, brands must shift focus to providing ongoing value and amazing experiences vs maximizing conversions.
Deliver Value Through Content
Rather than hard sells, create content that provides genuine value to audiences by showcasing expertise and solving real problems. Useful “know-how” content taps into motivations beyond just a purchase. For example, produce blog posts or videos that provide actionable tips for getting the most out of your products. Create explainers and guides that constructively educate about industry topics.
Brands that invest in content that informs, educates, and entertains build trust and affinity over time through utility. While some promotional content is fine, focus on addressing pain points and knowledge gaps your audience cares about. Valuable content earns attention and goodwill that transactional sales pitches cannot.
Build Online Communities
Look for opportunities to facilitate shared experiences, support, and connections among fellow customers. An online community allows people to bond over common interests and form relationships beyond just interacting with the brand.
Tactics like building branded communities on social platforms, hosting member forums tying into your expertise, or enabling user reviews help put people and conversations first. Customer communities add life and personality to brands by tapping into the human need for belonging.
Make Experiences Effortless
Obsess over eliminating any potential pain points or friction from the customer journey. Surprise people by exceeding expected service levels through thoughtful processes and touches at every opportunity. Wow, V.I.P. customers with free expedited shipping or insider access to new products pre-launch. Include handwritten thank you notes with purchases.
Even tiny hang-ups or inconveniences in interactions jeopardize hard-won loyalty. Constantly brainstorm ways, both large and small, that you can exceed expectations to deliver exceptional experiences. Smoothing out rough edges pays dividends in trust and affinity.
5. Encourage Loyalty and Advocacy
Gaining new customers costs exponentially more than retaining existing ones. As such, brands seeking profitable growth must focus equally on nurturing loyalty and motivating advocacy from their current base beyond just acquisition alone.
While acquisition grabs attention, winning long-term requires nurturing loyalty and activism from existing customers through advanced retention strategies.
Build Lasting Loyalty
Rather than taking customers for granted, nurture loyalty by deploying tactics that make people feel valued and appreciated. Establish loyalty programs providing escalating rewards and perks for repeat purchases and referrals. Identify VIP. high-value customers to surprise and delight with special upgrades, discounts, or early access without asking. Seek out and act on feedback to optimize customer experiences.
Loyalty is earned incrementally through consistency in providing above-average service and experiences. Efforts like handwritten notes or recognizing customer milestones build emotional equity over time. The goal is to reinforce why customers should keep coming back.
Motivate Organic Advocacy
While ads touting products often breed skepticism, satisfied customers organically advocating your brand carry far more influence. Strategically empower passionate customers to become brand evangelists. Craft share-worthy social media content and facilitate reviews. Spotlight customer success stories with permission. The key to brand advocacy is being human.
People trust peers over brands. Harnessing authentic word-of-mouth at scale can bolster awareness. Advocacy is driven by an emotional connection – one best forged through shared values versus transactions.
Make it Easy to Remain a Customer
Reduce friction surrounding purchases, account management, reorders, and support interactions. Preferences and details like billing and shipping should carry over seamlessly post-signup without re-entering. Offer one-click reordering. Introduce auto-delivery subscription models.
The more brands can anticipate customer needs proactively, the easier loyalty becomes. Identify points of friction in the relationship and smooth them out. Convenience builds habits while obstacles break them.
With customers not contractually bound, the only path to earning ongoing business and advocacy is consistently remarkable service and interactions. Set sights on being unforgettable.
