What is customer engagement?

Customer engagement is the varying level of connection between a business and its consumers that takes place across a range of interactions. Customer engagement, also known as consumer engagement or client engagement, can happen across all business touchpoints—advertising, marketing, branding, sales, acquisition, onboarding, or customer support. Therefore, the responsibility of creating and offering customer engagement isn’t exclusive to one unit within an organization—it’s a common denominator across all departments. However, client engagement is more closely akin to relationship marketing because of the many overlaps between the two ideas; they both help businesses build lasting relationships with customers instead of looking at customers as short-term sources of profit and revenue.

The engagement happens proactively when businesses want their consumers to be more engaged with their brand, reactive when customers are looking to gain something out of their brand experience, or it can happen on a subtle level when both—the business and the consumers—are not even aware of it.

Customer engagement varies across the industries, platforms, channels, mediums, and brands. For example, 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 mostly physical.

However, customer engagement in the digital age has come to evolve as a broader set of experiences that offer an equal amount of opportunities as there are challenges for businesses. Customer engagement in the online world isn’t limited to the virtual transactions; it demands everything that the offline medium offers. Customer engagement in the online world means offering a comprehensive omnichannel experience to make sure customers are deeply immersed in the brand.

Why is customer engagement important?

Simply put, non-engaged customers lead to high brand attrition. Customers don’t feel the need to stay with a company that doesn’t interest them. On the other hand, businesses that invest wisely in building meaningful relationships with their consumers enjoy long-standing benefits. When leveraged well, client engagement is fruitful at all stages of a buyer’s journey leading from prospecting, acquisition, onboarding, and support. A high level of customer engagement also leads to long-term repeat purchases, customer retention, brand loyalty, and advocacy.

The need to invest your resources in creating a sticky customer engagement and ensuring brand retention becomes very critical at an age when the customer acquisition costs run 4–10 percent high.

The most evident instance of customer engagement and its direct impact on consumer behavior can be found with brands that invest heavily in creating and distributing highly engaging social media and video content. These content are 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 action.

Here’s a visual depiction of the engagement journey that consumers go through when they interact with a brand’s social media content:

customer journey

But the customer engagement that happens through social media is just one dimension of it—engagement isn’t limited to a brand’s Facebook page or its Twitter posts. Below are some of the different dimensions of customer engagement:

1. Interaction types

The quality of interaction that customers have with a brand says a lot about their involvement. For example, customers checking to ensure the subscription expiry date doesn’t sound much like an engaging interaction compared to when they visit the pricing page for review upgrade options.

2. Interaction frequency

You can establish positive client engagement when you find that customers are a lot engaged with a mobile app when they use it multiple times a day.

3. Level of involvement

A customer who visits your product to change password is not as engaged with your products as much as the customer who exploits all the available features and doesn’t hesitate to ask for more.

4. Purchase frequency

Customers who love your brand and who are deeply engaged with your products are likely to buy from you more frequently.

5. Customer behavior

Highly engaged customers tend to advocate your brands and refer your products to their friends and families when the opportunities present.

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 activity that is carried out in order to encourage consumers to increase their brand interaction and perform certain actions that lead to repeat purchase, 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.

Other strategies by which marketing teams improve customer engagement is by producing a set of content and experiences that pull consumers in 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’ 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.

Similarly, live chat is one of the best customer engagement channels that your business can use to offer timely, contextual, and proactive interaction. Customer engagement is high when your prospects find answers to their queries in a quick and easy way. Unlike other customer engagement tool, a modern live chat software also doesn’t feel like a traditional business touchpoint—if offers the convenient experience of a messenger that users are familiar using on a daily basis. Live chat works best for marketing and sales because the client engagement at the consideration level of the customer journey is extremely high—prospects are evaluating the product and need a little push to proceed through their decision.

Here is an illustration of different types of brand content or experiences created for customer engagement.

Customer benefits

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.

The increasing demand for a higher level 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 the classic textbook case of businesses offering amazing customer support in order to ensure a deeper customer engagement and 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.

For customer support, live chat is a great stimulator to increase customer engagement because of how quick, easy, and effective it is to talk about problems and solve them on time. Live chat for customer support also works as the most preferred way for customers to reach out to the brands in order to escalate their queries or get solutions to their problems.

Ways to increase customer engagement

The first step towards improving customer engagement is to realize that there is always plenty of room for your business to pull your customers deeper into your brand experience. Secondly, you should make sure that client engagement is balanced throughout a customer’s journey and should see-saw inconsistently. For example, if you create a certain brand personality for your advertising and marketing communications, your support team should reflect that personality when customers come in with a preconceived expectation.

Here are a few customer engagement strategies to make more customers like your brand:

Personalize customer experience

Personalization has become a must-have for brand communications in recent years and the most obvious reason for this is because it works without fail. Your customers are more likely to open their emails if the subject line has their names on it. Customers cling on to experiences that speak to them on a personal level—a music player that gives them personalized recommendations, a restaurant that sends them a discount code a week before their marriage celebration, a dedicated account manager for businesses who are trialing a software, and so on. When you personalize the customer experience, your buyers turn into emotionally engaged customers.

Leverage in-product messaging

Your customers are more easily engaged when they are inside your product ecosystem, dabbling with your features and other offerings. Therefore, you should make the most of the customers’ attention and create fun avenues for them to immerse themselves in the experience. Companies like 8tracks.com and Canva are really good at tugging at their users’ heartstrings with messages that feel personal, witty, and engaging. If you want to ace the customer engagement game, make sure your push notifications, in-app messaging, text messages, etc. are all designed to hit the right chord with your users. Say “loading your personal settings, Chief” instead of “please wait while the page is loading” or say “Whoa, check out this new notification” instead of “you have 1 new notification.” In-product messaging are a smaller piece of your customer engagement pie, but a very powerful one when done right.

Add value to customers’ lives

It’s important for your customer engagement strategies to be directly relevant to your users’ lives because engagement without information is just entertainment—customers will eventually forget the jazz and drift apart from your product. At the core of client engagement is the relationship that you build with them. This relationship is based on trust and reciprocity, so you should give them the information that they can use and succeed in their lives. Send them emails about the productivity hacks that they can apply to their daily grind, announce the latest product updates, give them the product tour when you revamp your website, and let them know about all the ways they can use your service to scale and succeed in their business.

Use live chat

Contradictory to the conventional wisdom that associates live chat primarily as a customer support tool, it’s also one of the powerful customer engagement strategies for brands to enrich client engagement on a much deeper level. Live chat for customer engagement is not limited to just customer service; it also helps marketers engage first-time website visitors and convert them as leads; it offers ways for businesses to nurture leads into becoming customers; it provides avenues for them to create a great onboarding experience for newly acquired customers; and, it helps support teams to delight and retain customers for long-term relationships. Live chat for customer engagement is proactive and reciprocal unlike phone or other traditional means of client engagement channels, which is why your business should leverage it for every phase of the customer journey.

Create interactive experiences

If you take a close look at customer experience, you will find that there are deeper level of experiences such as product experience and content experience. While in-app product messaging helps you offer a great product experience, you should also focus on creating an interactive content experience that will stick out to customers so that they will come back for more. For example, use a ‘reading progress bar’ at the top of your blogs to let your customers know how far they are in finishing an article. Gamify customer experiences by adding an easter egg to your features list. Enhance their journey by communicating valuable insights about their behavior such as product usage, most used features, comparison with other users, etc.

Measure customer engagement

You can’t improve engagement if you can’t measure how customers view your brand. Religiously measure customer engagement metrics by running customer satisfaction (CSAT) tests and identify your weak points to improve on them. Ask direct feedback from customers through surveys, interviews, focus group discussions, and so on. Measure your net promoter score (NPS) standing and run customer effort survey (CES) to find out how likable your brand is among your existing customers. These datasets can work as a sounding board for your brand to be aware of the loopholes in your customer engagement strategies and fill those gaps by adding appropriate value to your customers.

How to measure customer engagement?

Customers don’t necessarily go by facts when they make buying decisions—they go by their feelings and intuition. Measuring customer engagement metrics is very important to manage customer engagement. It helps your business understand attrition areas, breadth of relationship with customers, creating customer differentiation, profit impact as a result of high/low engagement, risks and opportunities, reasons for non-engagement, and so on. You have a lot to lose if you don’t measure customer engagement metrics. For example, you can’t really improve your brand stickiness if you can’t measure the churn rate your online business may have.

Although there are conflicting views among marketers to view customer engagement as a metric or an abstract understanding, all sides agree that it’s an area that businesses need to explore. Here is how Gallup group measures customer engagement metrics in terms of Customer Engagement Score (CES):
 

Measuring Customer Engagement

In general, the marketing community considers the following metrics to gauge customer engagement in business:

Service metrics

Measure the level of customer engagement users have with your brand by running surveys around customer satisfaction (CSAT), customer support, net promoter score (NPS), customer effort survey (CES). Or, look at online product reviews or ask direct feedback from customers.

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.

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 audience, you can directly correlate the number of ebook downloads, new lead sign-ups, increase in conversion rates to the increase in customer engagement.

Customer Engagement Statistics

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