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You want to connect with customers. But you don’t want to settle for a transactional relationship. You want an emotional link. Customer engagement builds that emotional connection with your target audience, which can lead to brand loyalty, customer satisfaction, and repeat business. This article explores what customer engagement is, its significance, and provides examples of how top brands achieve it.
Defining customer engagement
Customer engagement refers to the bond that forms between a brand and its customers. While traditional marketing often focuses on driving sales, customer engagement emphasizes building a relationship through ongoing interaction. This method goes beyond the act of purchase and touches a variety of channels including social media, websites, and in-person opportunities.
Signs that a brands prioritizes customer engagement include:
- Delivering cross-channel experiences
- Offering valuable interactions and content
- Tying the brands larger purpose to something that is important to the audience
- Aiming to fulfill the customers’ needs and expectations across multiple levels from the first experience, through to building the relationship, and developing loyalty and advocacy
Businesses can implement successful customer engagement strategies through personalization, social media campaigns, and actively listening and responding to customer feedback. Engagement also includes a striking visual identity and a captivating brand story that appeals to customers.
Take our work for Caleb’s Kola. The craft soda hadn’t been around long but its branding wasn’t resonating with the 18-25 demographic. To help the company keep up with the competition and remain relevant in its crowded category, we modified the existing visual style in favor of a darker, edgier look. Then, we rolled out a content, engagement, social, and web strategy, targeting increased sales in local and regional markets.
Now, let’s delve deeper into the many benefits of customer engagement.
Importance of Customer Engagement
Mainaining an open dialogue with people throughout their entire customer journey can help a business achieve long-term growth and success. Below are the specific benefits of prioritizing customer engagement.
Customer contentment
Engaged customers tend to be happier and more satisfied with their experiences with a company. Content customers are less likely to churn and more likely to become advocates for the brand. According to Social Toaster, online businesses get 60 percent of their sales thanks to brand advocate referrals.
Customer loyalty and retention
When customers feel a strong connection with a brand, they are less likely to switch to competitors, even if alternatives are available. Retaining customers is also cost-effective, as the cost of acquiring a new one can be as much as five times higher as keeping one that you already have. Research suggests that it’s even possible for brands to increase profits by more than 25 percent when they increase customer retention by only five percent.
Higher customer spending
When you engage customers, they are more likely to explore additional products or services, leading to higher average transaction values. Satisfied customers trust the brand’s recommendations and are more open to upselling and cross-selling opportunities.
Expanded audience base
A positive emotional connection between brand and customer not only keeps loyal customers around - it also turns them into word-of-mouth brand evangalists. This type of customer engagement can help you attract new customers with social proof built in. McKinsey has even gone so far as to suggest word of mouth is a primary factor in 20 to 50 percent of purchasing decisions.
Improved brand reputation
Consistent, positive engagement builds a favorable perception of the brand, which can spread beyond paying customers and lead to your brand’s reputation getting a lift. In addition, a positive reputation can make customers more likely to forgive occasional mistakes and give the business more leeway to innovate and improve. Plus, a reputation for robust customer engagement gives a brand a competitive advantage by making it harder for competitors to lure away engaged customers.
Customer Engagement Pitfalls
So far we’ve focused on the advantages that a positive emotional connection drawn from a robust customer engagement strategy can bring. Yet, it’s important to recognize that negative customer engagement is also possible and can have devastating effects.
Imagine a customer buys a new laptop. After a few days of use it starts crashing frequently and performance slows. The customer contacts your service department but, after holding for an extended period, the support team offers an unhelpful response. When generic troubleshooting doesn’t work, the customer asks to speak to a supervisor, but they’re told they should call back instead.
After this frustrating experience, the customer posts about their dissatisfaction on social media, tagging your brand. The post gains traction as others chime in with similar experiences.
This kind of negative customer engagement can harm your brand’s reputation, decrease customer loyalty, reduce sales and revenue, and increase customer acquisition costs. Facing negative customer feedback can also lower your employee morale, which might decrease productivity and lead to higher turnover rates.
The headline? Every customer engagement matters. Let’s look next at the best ways you can engage with your community.
Effective Customer Engagement
Successful customer engagement provides value to the customer and is not solely focused on making a sale. This may encompass an array of approaches, and will depend on your business model and target audience. The following subsections will delve into specific strategies such as personalization techniques, utilizing social media channels, and active listening and feedback.
Personalization
According to McKinsey, “companies that excel at personalization generate 40 percent more revenue from those activities than average players.” Businesses can employ customer engagement data to customize recommendations, precisely target cross-selling and upselling proposals, and tailor experiences to individual customers’ preferences, purchase history, and behavior. Using data analytics to understand your customer needs and preferences helps them to feel valued, which can help to forge enduring relationships.
Social media
Social media such as Twitter, Facebook, and Instagram offer direct access to customer feedback and also provide a platform for brands to build a vibrant online presence, foster a sense of community among customers. Responding to comments, hosting virtual events, and sharing user-generated content can nurture deeper relationships and maintain connections with customers worldwide.
Active Listening and Feedback
Feedback touchpoints that are quick and easy to use - such as site intercepts, scoring or feedback buttons online, and feedback boxes or cards offline - can help gather valuable customer insights. By asking for customers’ input, you not only engage them but also gain qualitative and quantitative data that can improve other customer engagement strategies.
While you don’t want to facilitate negative brand experiences, sometimes you will receive negative feedback. However, treat this as an opportunity. Timely consideration and follow-up shows customers that their opinions are valued. By actively listening, your business can use these moments to create stronger customer relationships and enhance overall customer satisfaction.
Examples of Successful Customer Engagement
Customer engagement strategies have helped many brands build stronger community relationships. What works will vary widely depending on the industry and audience, but many companies have successfully implemented strategies tailored to their unique brand and audience.
For wine brand Line 39, we created a Find Your Adventure experiential campaign to encourage summer festival-goers to explore the California winery’s reds and white varietals. The activation centered around a revamped VW Bus with a wine bar and photo-op friendly living wall, which the brand took on the road, driving across the country to engage with consumers at various events. During stops, visitors to the activation could pin where they had traveled on a large map on the back of the bus and were invited to make an entry in a journal sharing their future travel plans.
In addition to helping consumers sign up and get a promotional discount code for their favorite bottle, brand ambassadors encouraged consumers to download an augmented reality app where people interacted with different 39 Wine bottles that showed off different destinations along the brand’s namesake, the 39th parallel.
Line 39’s activation achieved its primary objectives and, best of all, was fun and memorable. But not all customer engagement has to be brand activation. Consider these additional examples of customer engagement in action to explore other ways that brands can delight the public.
- Apple’s Genius Bar offers proactive customer support. The brand’s enhanced customer experience drives brand loyalty by enabling customers to book appointments, get personalized help, and access a vast array of self-help resources.
- GoPro frequently features user-generated content on its social media channels and website. This strategy provides authentic content for GoPro while also creating a community of passionate users who feel connected to the brand.
- Wendy’s uses its well-known social media platforms to connect with customers in many different ways. They actively engage through witty comments, direct messages, and responding to customer tweets (check out their famous roasts). They also share user-generated content, run contests, share behind-the-scenes content, and collaborate with influencers to expand their audience.
- Starbucks Rewards Program is designed to retain customers and increase engagement by rewarding them for their purchases. Members can earn stars for every purchase they make, which can be redeemed for free drinks, food, and other merchandise.
- Airbnb encourages both hosts and guests to leave reviews after each stay. This system builds trust within their community, ensures high-quality experiences and continuous improvement of services based on user feedback, leading to higher customer satisfaction and engagement.
- Harley-Davidson's HOG (Harley Owners Group) engages customers in a brand-loyal community. Customers get membership benefits, offers to attend exclusive events, and the opportunity to connect with fellow Harley enthusiasts who are also emotionally invested in the brand.
- Netflix uses a sophisticated algorithm to analyze viewing habits and preferences, providing personalized content recommendations that reduce content discovery time and increase satisfaction and engagement with the platform.
While your brand may not be a global powerhouse like these, that doesn’t mean you can’t make a splash with your customer engagement strategy. However, before diving in, you need to establish what success looks like. How do you measure customer engagement? We share some common metrics next.
Measuring Customer Engagement Success
To make sure customers are engaging with your business and gauge whether they are enjoying those interactions, you need key customer engagement metrics. This section outlines some of the top measurements you can use to gain an all-encompassing view of customer interactions and their levels of engagement.
Net Promoter Score (NPS)
NPS measures customer loyalty and involves asking customers to rate their likelihood of recommending a brand on a scale of 1-10. This provides a clear indicator of customer sentiment and engagement. NPS scores are typically collected using in-app surveys or emails to customers after they’ve interacted with your service or used your product.
You’ll look to see if people qualify as a “promoter,” (scores nine and 10), “passive” (scores seven and eight), or “detractor” (scores six or below). Promoters are likely to be loyal and engage in word-of-mouth. It’s important to remember not to ignore detractors. They can harm your brand image and erode your customer base by leaving negative reviews, discouraging others from buying from a company, and driving churn.
Customer effort score (CES)
CES measures how hard your customer needs to work to accomplish their desired task or to resolve an issue. If they have to put in a lot of effort (and get frustrated as a result) this can hurt their overall perception of your brand and business.
Customer Satisfaction (CSAT)
CSAT surveys gauge customer contentment with products or services. The next time you get off the phone with a call center and get that familiar text asking “how did we do?”, you’ll know that the business is trying to measure CSAT.
These surveys often ask customers to rank their recent support experience on a scale of 1 to 5 or as “good” or “bad,” providing valuable insights into your customer engagement efforts and areas for improvement.
Repeat Purchase Rate
Tracking repeat purchases helps understand customer lifecycle and engagement levels. By monitoring repeat purchase rates, also known as repeat customer rate, repurchase rate, or re-order rate, businesses can identify trends in customer behavior and make informed decisions to improve customer retention and loyalty.
You can accumulate the customer data needed for these metrics from diverse sources. These include:
- Loyalty programs
- Social shares, likes, and comments
- Support cases
- Experiential data from surveys and other feedback channels
By evaluating these metrics, your business can gain valuable customer insights and tailor engagement strategies to better meet customer needs and expectations.
Implementing Your Customer Engagement Strategy
Mastering customer engagement involves understanding the emotional connections that build strong customer relationships and placing an importance on ongoing interactions with consumers. By implementing effective customer engagement strategies such as personalization, social media campaigns, and active listening, businesses can drive retention, loyalty, and satisfaction.
A Little Bird can help you prioritize customer engagement. Our expert team will work with you to determine the appropriate customer engagement strategies for your objectives. We’ll also integrate technology, measure success, and continuously refine strategies based on feedback and evolving market conditions.
Differentiate your brand, drive brand loyalty, and ultimately grow market share with A Little Bird’s customer engagement expertise.