Customer engagement: Everything to know

 Effective customer engagement will ignite meaningful connections and foster loyalty. Learn how to grow your business with customers at the center of your business.

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What is customer engagement?

Customer engagement is the varying level of emotional connection or relationship between a business and its consumers across various interactions. Also known as consumer or client engagement, customer engagement can happen across all business touchpoints—advertising, marketing, branding, sales, acquisition, onboarding, or customer support. Therefore, developing customer engagement isn’t exclusive to one unit within an organization—it’s a common denominator across all departments. Client engagement is more closely akin to relationship marketing. They both help businesses build lasting relationships with customers instead of looking at customers as short-term sources of profit and revenue. Customer engagement can happen on many levels:

  • Businesses can take proactive approaches to improve customer engagement. An example of this is sending out personalized email campaigns based on consumers' purchase history and preferences. 

  • Customer engagement can also be reactive when customers want something out of their brand experience, like reaching out to the support team.

  • It can happen on a subtle level when both—the business and the consumers—are not even aware of it.

Customer engagement varies across sectors, platforms, channels, mediums, and brands. Engaging customers in the traditional offline world meant greeting your prospects in person with a smile, creating great in-store experiences, offering tangible brand value, and so on. The interaction was more direct, immediate, and primarily physical.

However, in the digital age, it has evolved as a broader set of experiences that offer equal opportunities as there are challenges for businesses. It isn’t limited to virtual transactions and demands everything the offline medium offers. It means offering a comprehensive and personalized omnichannel experience to ensure customers are immersed in the brand.

Customer engagement, customer satisfaction, and customer experience (CX)

 Let’s distinguish customer engagement from two inter-related concepts: customer experience (CX) and customer satisfaction.

Customer experience (CX) vs customer engagement

Customer experience is all customer interactions with your company at all customer journey stages. Managing customer experience is about caring for and improving customer interactions and improving their expectations at all levels.

On the other hand, customer engagement is how the customer feels about the brand, reacts to its various aspects, their level of loyalty, and how they respond to your marketing efforts. It sheds light on the customers’ choices, not just how the brand presents itself.  

Customer satisfaction vs customer engagement

Customer satisfaction is just one of the metrics used to measure customer engagement. This means that a satisfied customer can be considered engaged, but it’s not the only factor that decides whether they are engaged or not. 

The increasing demand for a higher level of client engagement is why customer support teams across businesses nowadays don’t just stop at offering service and resolution but aim to create memorable experiences for customers. Companies like Zappos and Nordstrom are classic textbook cases of businesses providing fantastic customer support to ensure deeper customer engagement and experience.

While all of the above play a part in getting customer’s attention, they are not the only aspects that determine it. After all, you can be satisfied with a product, but it doesn’t necessarily mean that you engage with them on social media or refer your friends to the brand.

Why is customer engagement important?

Businesses that invest wisely in building meaningful relationships with their consumers enjoy long-standing benefits. According to Gallup, a customer represents an average 23% premium in terms of share of wallet, profitability, revenue, and relationship growth compared with the average customer. 

When leveraged well, client engagement is fruitful at all stages of a buyer’s journey leading from prospecting, acquisition, onboarding, and support. It will also lead to better retention rates in the long run.

Simply put, not engaging with customers can lead to high brand attrition. Customers don’t feel the need to stay with a company that doesn’t interest them. 

You can find the most evident instance of customer engagement and its direct impact on consumer behavior with brands that invest heavily in creating and distributing highly engaging social media and video content. This content is created not just for marketing and branding intent but with an aim to inform, educate, and entertain consumers so that there is some level of emotional involvement for consumers to feel the need to take certain actions.

5 Strategies to drive customer engagement

Now that you know what customer engagement is and its benefits, let’s take a look at how you can improve it. 

1. Highlight customer stories

Publishing content on your customers’ success stories highlighting how your brand enabled them to succeed is a proven customer engagement strategy. It builds trust and an emotional connection with your audience and makes the brand more approachable.

You can feature customer stories regularly on your blog, email, and social media content. Also try to encourage user generated content on social media to get genuine examples of how your product help customers. 

A great example os Shopify’s podcast ‘Shopify Masters’ which feature insightful conversations with Shopify store owners and industry experts. They repurpose these episodes into blog posts, emails, and other content assets to distribute to their audience of eCommerce business owners.

2. Value customer feedback

Having an active feedback mechanism with your customers is a great way to make sure they stay engaged. Customers also already expect that the brands they do business with understand their needs. According to a recent survey, 82% of respondents expect retailers to be able to accommodate their preferences and meet their expectations.

Use online surveys to gather structured feedback from customers. These can include post-purchase survey, customer satisfaction survey, product usage surveys, and exit survey. Another way is to monitor reviews on platforms like Google, Yelp, and social media. 

Use the collected feedback to identify areas for improvement, whether it's enhancing customer service, or updating processes. Act on the feedback to demonstrate that customer opinions drive positive change within your organization.

3. Build stronger relationships through contextual communication

Personalize communication by addressing customers by their names, referencing their past purchases or interactions, and suggesting products/services that align with their preferences. Personalization shows that you value their individuality and thus improve customer engagement.

Your customers may prefer multiple platforms to engage with your brand. Reach them through various channels and ensure a consistent message across all these platforms. Furthermore, consider using data analytics to gain insights into customer behavior and preferences. This allows you to tailor your communication strategies even more accurately.

4. Engage proactively

You don’t have to always wait for customers to reach out to you with a problem before you can engage with them. 

With proactive customer service, you’re anticipating issues before they occur. This saves customers effort and gets them at the right place. For example, actively asking customers if they need help with a new feature you’ve released so that they don’t get confused or overwhelmed makes customers to remain engaged with your product. 

Providing proactive customer service like this will boost trust in your brand and keep buyers feeling satisfied and engaged. As a result, you’ll see stronger retention rates.

5. Reward loyal customers

Having a rewards and loyalty program in place can not only boost customer engagement, it can also bring in new customers and even increase your profits. HubSpot found that more than half of people will spend more in order to maximize their loyalty benefits. 

Source: Blumetopia

Find out what your customers would value the most from you. Discounts, store credits, early access to sales sales promotions, and shipping benefits are some of the common loyalty benefits offered by brands. 

What is a customer engagement platform?

A customer engagement platform is any application that is used to communicate with customers, track and analyze customer behaviour, enhance user experience, and improve brand loyalty.

A wide category of tools come under customer engagement platforms, some of which are:

Help desks: Software used by customer facing teams to manage customer queries and requests.

Chatbots and in-app messaging tools: Tools used to proactively connect with customers at specific points and chat with them in real-time.

Feedback and survey apps: Software to create customer surveys and other feedback systems to collect, analyze, and respond to feedback.

Social media management software: Platforms used to create, schedule, and post content as well as manage comments on social media platforms. 

Email marketing software: Applications to create and manage email campaigns.

A/B Testing software: Tools that let you test multiple versions of a product, website page, or experience to determine what works best for users or brings the most conversions.

Loyalty platforms: Tools that are for creating and managing customer loyalty programs.

Tools that come under this category have a wide range of functionalities including personalized communication, automated campaigns, social media integration, feedback collection, analytics, and segmentation.

Some tools come with multiple customer engagement features. For example, Freshworks comes with customer support, conversational engagement, and marketing automation features — the power of three different tools combined!

5 good examples for customer engagement

Businesses across industries run different campaigns and loyalty programs to attract and retain customers. We’ve curated five best examples of good customer engagement and what they’ve done right.

Wendy’s: Social media campaigns done right

Wendy’s is known for their witty Tweets, not just their crispy fries. They also use their social media presence to encourage consumer engagement by crafting attractive social media campaigns accompanied by special offers for winners.

Amazon: Personalized product or content recommendations

The e-commerce giant—Amazon does a fantastic job of keeping consumers engaged and hooked to both their online retail and streaming platforms.  Users get push notifications or email reminders based on their past purchase or viewing history, to check out similar products. 

Spotify: Buzzing community forums to drive customer engagement

Spotify connects and engages with music lovers worldwide through its thriving Spotify community. Users don’t just look for help on product issues but also contribute their ideas and feedback towards improving the Spotify experience. The brand responds and ensures that customers’ voices are heard, thus driving significant engagement through the forum.

Canva: Customized templates and challenges to build user engagement

Canva has over 75 million users across 190 countries. To keep their customer base active and engaged, Canva curates design templates for national and regional holidays that are made prominently visible within the product. They also run the #CanvaDesignChallenge campaign—promoted via email and social media— to encourage customers to use their product and boost their engagement.

Amplitude: Deploying bots as icebreakers for customer conversations

Brands have started deploying bots on their websites to engage with prospective customers who are exploring their service or product offerings. AI-enabled bots are trained to collect the right information, gauge user intent, and serve the right content or next steps to move potential buyers down the purchase cycle. For instance, Amplitude offers interesting content from their recent conference to engage with website visitors.

You can also use bots to resolve commonly asked customer support queries or announce new product updates within the app for existing customers.

Customer engagement metrics 

Now that you have an idea on how to improve customer engagement and about the tools you need to help you, let’s check out how you can calculate customer engagement score and find out the effectiveness of your campaigns.

Customer loyalty

You can measure customer loyalty with the help of Net Promoter Score (NPS) surveys. It's a simple yet effective way to gauge how likely your customers are to recommend your product or service to others. 

The single-question survey usually asks a question similar to “On a scale from 1 to 10, how likely are you to recommend this brand to friends or family.”

The higher the Net Promoter Score, the more loyal the customer, and the ore likely they’re engaged.

Customer satisfaction

You can measure customer satisfaction by sending out a CSAT survey after a specific interaction or transaction, asking customers to rate their satisfaction with a question like: "How satisfied are you with your recent experience with [product/service]?"

Provide a rating scale, typically ranging from "Very Unsatisfied" to "Very Satisfied."

Customer effort

Customer effort score tells you how easy a customer finds it to take certain actions: get their problems fixed or aquarius answered, make a purchase on your website and so on. You can measure it with survey questions on a scale of “very easy” to “very difficult” and get to know how you can improve engagement.

Revenue metrics

Look for revenue trends in your financial graph in terms of customer lifetime value (LTV), revenues per customer, or overall revenue increases to understand what impact client engagement or disengagement is making to your bottom line.

Sales enablement metrics

When you launch new sales enablement assets to your target audience, you can directly correlate the number of ebook downloads, new lead sign-ups, and increase in conversion rates to the increase in customer engagement.

Campaign metrics

Use analytical tools to understand how successful your campaigns are among your audience by measuring the click rates, website traffic volume, new page views, email responses, social shares, and other analytics.

Subscriber count

A big part of customer engagement is nurturing and maintaining a strong relationship with your audience. Subscriber count on newsletters and events your brand hosts can be a measure for assessing the reach and potential impact of customer engagement efforts. 

Social media engagement metrics such as follower count growth, likes, and impressions, are also valuable indicators of customer engagement with your brand.

What is customer engagement in marketing?

Of all the disciplines that are there in the business world, client engagement is most akin to relationship marketing in its mission and motive. The term customer engagement is, therefore, often thrown around as a marketing function to make it a more overt and proactive business practice. That way, it doesn’t become a dormant experience that comes to life as a reaction only when a customer prompts an action.

In this sense, customer engagement is a set of imminent business activities that is carried out in order to encourage consumers to increase their brand interaction and perform certain actions that lead to repeat purchases, retention, loyalty, or brand endorsement.

Marketers heavily depend on customer relationship management (CRM)—both, a discipline and a system—to improve customer engagement and maintain relationships with customers. A CRM tool allows brands to create a central repository of customer data, trace individual customer interactions, and collaborate within the team.

Another strategy by which marketing teams improve customer engagement is by producing a set of content and experiences that pull consumers for some level of interaction. For instance, your consumers will enjoy reading and sharing the listicle article your content marketing team might have posted on your business’s Facebook page, titled “7 productivity hacks you can learn from the animal kingdom.” It could be a feedback form you display on your website or a customer success team that you set up to reach out to your existing customers to help them achieve their goals with your product.

How does customer support approach customer engagement?

The spectrum of customer engagement runs thick across the board, and customer support is no exception. In fact, customer engagement plays a very important role in providing enriching customer experience because support is one area that customers are usually most sensitive about.

If your business can’t live up to the support expectations of your customers, it usually doesn’t bode well for your brand reputation—especially in the age of Twitter where an unhappy customer can start a wave of brand-shaming based on a single bad experience.

But customer engagement in the realm of customer service doesn’t end there. Traditionally, customer engagement was a reactive aspect of customer support. More recently, there is a relatively new practice of setting up customer success teams across industries to help their customers achieve their end goal. 

Customer success is the proactive extension of customer support that views existing customers as a source of repeat business and aims to keep them engaged with the brand. The philosophy behind establishing customer success teams is to ensure that no customer is left out in the cold for competitor brands to poach. It believes that helping customers succeed in their goals will eventually help businesses create demand for their service at scale as a result of their client’s growth.

Customer Engagement Statistics and Trends

Customers who received responses to tweets from brands were willing to spend 3% to 20% more on future purchases from the company. 30% of customers who receive a response to a tweet are more likely to recommend the brand to others.

-Twitter survey, 2016

78% of marketers say that engagement occurs in the middle or end stages of the marketing funnel.

-Marketo 

At 42%, live chat is the most preferred means for customers to give their contact details—higher than other lead capturing method.

-Invesp 

Millennials have the lowest level of customer engagement; their engagement is highly dependent on technology.

-Gallup report, 2016

"Active listening" is a critical customer engagement criteria. Companies that fail to respond to customers via social media witness a 15% increase in customer churn rates.

-Gartner 

Compared to the average customer, ‘fully engaged” customers make-up for the 23% share of profitability, revenue, and relationship growth.

-Gallup 

Businesses that offer the strongest omni-channel engagement strategies retain 89% of their customers, as against the 33% for companies with weak omni-channel strategies.

-Digital Commerce 360

Businesses can increase customer advocacy by as much as 25% when they answer social media complaints.

-Convince & Convert 

44% of customers consider a live chat conversation with a support agent to be the most important feature of an online shop’s website.

-Forrester

52% of companies believe that Facebook is the most effective social channel for customer engagement, service, and support.

-Social Media Today

45% of companies offering web or mobile self-service reported an increase in site traffic and reduced phone inquiries.

-Unisphere Research

In a marketing survey, 87% of respondents said that they were okay with having various details of their activity watched, monitored, and tracked if it meant receiving access to personalized rewards or engagements.

-Bond Insights

Customer engagement only gets 15% of attention in the list of priorities for brand marketers, compared to customer experience (25%), brand awareness (18%), new customer acquisition (18%), customer retention/loyalty (17%).

-Bynder and OnBrand

In a survey ran in the UK, 54% of customers confessed that they feel more loyal to brands who show a deeper level understanding of their preferences.

-Wantedness research

83% of customers prefer the ability to move from one channel to another (e.g., moving from web chat to a live conversation), but only 50% of businesses support such cross-channel interactions.

-Genysys

35% of millennial shoppers want to search products in a brick-and-mortar store using an image and then receive product recommendations on the spot.

-Salesforce

Over 50% of customers use mobile messaging apps like Facebook Messenger for customer service and support.

-Genysys

73% of customers feel satisfied with their live chat brand experience compared to email (51%) and phone (44%).

-Invesp

Frequently asked questions about customer engagement

What is digital customer engagement?

Digital customer engagement refers to using multiple digital channels and technology to nurture customer relationships. This involves using various online media such as email, chat, social media, bots, online forums, mobile apps, and more to engage with prospective and existing customers.

What is the purpose of customer engagement?

The main purpose of engaging customers is to attract and build long-term relationships, thus driving brand loyalty and customer retention.

When done right, engaged customers can become your ultimate brand advocates through word of mouth, helping your business generate more revenue.

What is good customer engagement?

Good customer engagement stems from a deep understanding of customer behavior, preferences, and customer needs. When you’re well aware of your customer's journey, you’ll know the best touchpoints, channels, and the right stages of the journey to engage with your customers.

You know you’ve got your customer engagement strategy right when you see an uptick in your engagement metrics such as NPS, CSAT scores, social media followers, or churn rate.

How to increase customer engagement?

Play with different customer engagement strategies, including personalized customer interactions, loyalty programs, gamification, or introducing new engagement channels, to find which resonates with your target audience better in increasing engagement. 

Above all, ensure to provide quick and effortless customer support when customers reach out for help. Great customer service shows that you listen and care about your customers.

How can small businesses improve customer engagement?

Small businesses can win big time on social media by engaging and interacting with customers. Share your customer testimonials or online reviews as engaging videos to attract more customers. You can also easily track and respond to brand mentions by customers on Twitter and Facebook using a customer engagement software like Freshworks Customer Service Suite.

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