What is Customer Engagement? A Complete Guide

In this guide, we cover what is customer engagement, why it's important and the best engagement strategies you can implement in your business today.

Written by: David Oragui

Published: July 17 2020

Customer engagement illustration

Customer engagement makes the brand-customer relationship about more than just money – it becomes based on real human interactions that have ongoing value and reward. 

Psychological studies show that customers make decisions based on an emotional reaction, and justify their decisions later. 

That’s why we should be doing all we can to increase engagement, and create positive emotional exchanges with our customers.

What is Customer Engagement?

Customer engagement means interacting with your customers on different channels, spanning from when they first encounter your brand to past the point of their first purchase. 

The object of the game is to build your relationship with them and earn their loyalty. Engagement can take place over any channel such as: email, phone call, social media, community forum, or live chat. 

In The New Rules of Sales and Service, David Meerman Scott talks about the fundamental changes that have taken place in sales and service. 

Due in large part to being able to find information freely on the web, consumers are now in charge. There is no longer any mystery to the sales process. We also no longer broadcast to our audiences – the communication is two-way and instant. 

At the same time, as service levels have improved, customers have infinite choices. In a way, customer engagement is the new marketing, and we should also market to our existing customers. 

It’s how we keep our brand and products front and center in our customers’ minds – by establishing a sense of reciprocity. When we give to our customers, they are more likely to want to give back to us. We don’t take them for granted.

No longer do we focus on a one-way concept of marketing, but stimulate a continual dialogue between customer and brand. 

We’re moving away from the traditional model of upselling to the customer, and instead providing them with personalized interactions that help them gain more value from the products we sell. 

That’s why engaging with customers improves the overall customer experience (CX being the perception customers have of each interaction they have with our brand). 

Why Is Customer Engagement Important?

There are some very good reasons to focus on customer engagement. 84% of customers say that the experiences a company provides are equally as important as products and services, which is an increase from 80% the year before. 

And 9 out of 10 Americans are willing to pay more for a better Customer Experience. Engaged customers not only spend more, but they are less likely to churn, and more likely to recommend you to their friends.

Customer engagement positively impacts your bottom line by boosting customer satisfaction, customer loyalty, and customer advocacy. 

Brand advocates spend more with your brand and also recommend your brand to others. Customer engagement increases customer lifetime value and reduces churn.

“Customers have so much power now,” said Neeracha Taychakhoonavudh, EVP of Industries at Salesforce. “So knowing your customers and understanding their needs has become critical to success, no matter what industry you’re in.”

Higher levels of customer engagement result in more brand equity. Brand equity is the degree to which customers believe your brand can meet or exceed their expectations in your particular consumer category. 

When more engaged, customers trust your brand more, and they are more likely to choose you over a competitor.

The Impact of Rising Expectations

Any time a leading consumer brand like Amazon or Starbucks raises the bar for customer expectations, customers then begin to expect all businesses to at least match that standard of service. 

If Amazon offers one-day express delivery, then this is something that other eCommerce companies need to strive for. Not only must we focus on our customers, but we must also closely study our competitors so we can match or exceed what they offer in terms of experience.

This kind of healthy competition has had an exponential effect on raising customer expectations, but hopefully, it’s a rising tide that will lift all boats. 

Companies that understand the need to compete in the realm of customer experience will be more successful than those who are focusing on price or product alone.

That being said, customers will see through gimmicks and insincere marketing ploys. The only viable option is to truly invest in retaining customers, who are drivers of profit and growth. 

Build trust, cover the basics, and consistently meet customer expectations before trying to shoot for the stars.

Now, let’s move on to the actionable stuff!

6 Strategies to Engage Your Customers

1. Make It About Your Customer

The very nature of customer engagement means that we must turn our focus to the customer, using observation and empathy to work out how customers would best like to interact with us. 

We are not necessarily our customers, but we do work closely with them. The bottom line is that the way you engage customers will be tailored to your own particular customer base. 

Perhaps they are a vocal bunch who love to engage on social media. Maybe they are best served by a steady stream of valuable content that helps them solve problems and learn useful skills. Only you can decide.

2. Learn About Your Customers By Capturing Feedback

Engaging with your customers is a positive feedback loop. Sometimes customers will initiate contact, for example through a complaint, and sometimes you will initiate contact, such as promoting some valuable evergreen content on social media and email.

Even though customers sometimes offer their feedback, try to predict what your customers want before they have to ask. 

Research the customer journey and tailor your offering to make it easier to interact with your brand. 

Make use of feedback forms to better understand your customers by analyzing their responses for trends and patterns.

3. Be Device and Channel Agnostic

Be device- and channel-agnostic when it comes to interacting with customers. 

Let customers choose how they interact and respond to your business in real-time. Ensure all your customer communications are integrated into the same platform.

4. Break Down Departmental Silos

Discourage departmental silos and develop your strategy with the customer at the center. Anyone in the company should be empowered to deal with customers, without needing to refer anyone to another team member. 

You should be building your operations around your customers so that every team is working from the same playbook. Customers shouldn’t notice any difference in communications between marketing and support. 

If a customer has a problem with the software, allow them to directly contact the development team for help.

5. Segment Your Data

Not all of your customers have the same needs. You may be able to group them into particular categories or segments, and send them targeted messaging. 

When you segment your data, you can better personalize your messages. You can deliver the right message with the right idea, which is optimized to be sent at the right time at the optimal frequency (not too little and not too much).

This means you can still communicate with your customers en masse, but they are more receptive to the message you’re trying to send. 

6. Invest in Self-Service

68% of customers now prefer self-service, and you can improve customer engagement with a customer knowledge base. This improves your ability to engage with your customers in real-time. 

They can solve many problems themselves, instead of waiting for an agent to become available. You can help more customers with your existing resources and maintain a high standard of service.

Consider a solution like Helpjuice to build your customer support knowledge base.

Hurdles to Watch Out For

It’s hard to measure the true value of customer engagement initiatives, but there are some methods you can use. Net Promoter Score surveys can tell you how loyal your customers are to your brand. 

Customer Satisfaction Score surveys can also provide real-time feedback about how customers are feeling about particular interactions.

It’s easy to slide into a habit of being reactive when you get busy, but you should aim to move towards a model of proactive customer engagement. 

This means thinking about the obstacles blocking our customers from success and reaching out before they encounter a problem. 

Don’t wait for customers to complain before you speak to them – this is all part of personalization and making good use of the data.

You must provide an adequate support budget and manpower. It’s no good struggling with a skeleton staff if your focus is on improving the Customer Experience. 

Marketing and support (the customer-facing teams) must make the Customer Experience seamless. Messaging must align, and interactions should be based in a single source of truth – with everyone connected to the shared company values.

Wrapping Up Customer Engagement

Don’t get left behind as the Customer Experience bar continues to rise. Customer engagement is an essential part of improving CX and remaining competitive in your industry. 

When customers feel like you value them, they reward you with loyalty, increased spending, and referrals.

We’re now tearing down the old boundaries that divided business and customer, and treating our customers as just as much part of the brand as employees. 

We must take our customers on our journey with us, and empower them to be successful.

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