Definition

customer engagement

Customer engagement is the means by which a company creates a relationship with its customer base to foster brand loyalty and awareness. This can be accomplished via marketing campaigns, new content created for and posted to websites, and outreach via social media and mobile and wearable devices, among other methods.

Importance of customer engagement

Customer acquisition costs can reportedly run four to 10 times higher than those for customer retention. A 2016 Accenture survey of 24,489 people found that the costs of losing customers due to poor service add up to an estimated $1.6 trillion in the U.S. alone.

Customer engagement strategies can help curb churn rates by prolonging the customer journey beyond purchasing. Engaged customers become repeat customers: A 2016 survey conducted by Twitter showed a customer who received responses to tweets from brands were willing to spend 3% to 20% more in future purchases from the company. Thirty percent of customers who receive a response to a tweet are more likely to recommend the brand to others, according to the survey of 3,139 users.

Strategies for engaging customers

Customer engagement methods are diverse and far-ranging, but many experts suggest companies begin with "active listening" -- this means scanning for feedback left on websites, sent via email, phoned or mailed in, and posted to social media channels. Answers to questions are expected, with a 2012 study by Gartner finding a 15% increase in customer churn rates due to failure to respond via social media.

Experts also advise companies view social media as not just a broadcast platform. Improve online customer engagement with regularly posted content and contests launched through Facebook, Twitter, LinkedIn and other sites. Responsive brands that exhibit "fun" and "sassy" personalities catch customers' attention and can result in valuable retweets and likes, as fast food chain Wendy's experienced when a customer launched a campaign in 2017 to earn free nuggets for a year and set a world record for the most retweeted tweet.

Personalization is key in meeting customer expectations.

Customers can also be engaged via messages sent to smartphones or wearable devices. Internet of things sensor technology can capture customers' attention by helping them to proactively schedule maintenance on a product, buy new products or demonstrate loyalty through connected devices. Customer service agents can also use mobile data to approach customers and engage them by highlighting products they may be interested in.

Another customer engagement method is to improve customer support and activity by creating new ways to interact with consumers. Slack channels, customer support help desks and forums, and mobile apps can not only be new avenues for feedback, but also foster communities of users.

Measuring customer engagement

While there is debate about how to truly determine engagement, companies can determine the return on investment (ROI) of their customer engagement efforts by taking related metrics into account. Examples include:

  • Website traffic
  • Interaction with certain links on websites
  • Likes and shares of content on social media
  • Text analytics of customer sentiment
  • Response times
  • Time to resolution
  • Click-through rates in email campaigns
  • Facebook and Twitter analytics
  • Audience growth

Companies can derive data about their customers and products from observing customer engagement patterns. A/B testing of certain website presentations or marketing campaigns may be conducted to determine which methods are more effective in closing a purchase. Testing and data analytics enable companies to better determine which of their efforts they can correlate with higher sales, greater membership or other measures of customer success.

Pyramid of customer loyalty

Customer engagement trends

With new form factors such as iBeacon technology and wearables, the digital experience of customer engagement is now combining with physical experiences. So, for example, a company may use beacons to identify that a customer is in a store and send that customer messages about items in an abandoned shopping cart online or discounts based on his presence in-store.

Customer engagement is also moving beyond the realm of retail or traditional product sales. Industries like healthcare are using technologies such as customer portals to engage patients in their health regimen and communication with doctors; and new healthcare platforms are emerging with the express purpose of facilitating this communication and patient engagement. Wearables have also been identified as a key tool in patient engagement, enabling patients to measure various health indicators and track their health regimens.

This was last updated in July 2017

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What methods is your company using to improve customer engagement?
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We've shelved most of the automated systems and trained our employees to answer questions that help work through problems. Yes, it costs us much more, but our human-on-human interface builds lasting connections with our customers. Which makes them far more inclined to trust our products which makes for bigger sales and repeat business. And after the shock wears off, their added purchases balance the added cost quite nicely. 
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That sounds fascinating, in an era in which so many organizations have tried to automate systems.
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