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LOYALTY · 

8 MINUTES

Customer Engagement: Why You Need It & How to Get It

 
CORMAC O'SULLIVANPIGGY

The Meaning of Customer Engagement:

Customer engagement is the cornerstone of any loyal customer base. It can be defined as the cultivation of a relationship through meaningful interactions. These interactions are chosen by the customer, and the majority are provided by the business.

The Role of Customer Engagement:

Customer engagement is essential for achieving and retaining customer loyalty. However, it also improves the brand experience and customer experience, increases brand trustworthiness, leads to valuable consumer feedback and insights, and increases the velocity of your sales funnel. Need we say any more?


  • 86% of customers are willing to pay a price premium in return for a more customized and smooth customer experience.

  • 64% of customers expect brand engagements and interactions to be tailored based on previous interactions.

  • 95% of all customer interactions will be conducted through artificial intelligence by 2025.

  • 78% of customers prefer omnichannel engagement.

  • Revenue per user has been increased by 166% through the use of ‘next best action’ personalization tactics.

  • 57% of a consumer’s purchase decision is complete before you ever interact with them.

  • Over 60% of customers interact using 2 or more channels and expect consistency across all channels.

  • 61% of customers availing of a consistent service have been using the same provider for more than 3 years.

  • 91% of customers reported being more likely to shop with a brand that remembers preferences and provides relevant recommendations rather than one that doesn’t.

What are the Elements of Customer Engagement?

Longevity

Longevity is simply the time span over which the interactions took place. This is generally, but not always, measured over the course of a customers lifetime to the current point. When analyzing the impact a certain campaign had on customer engagement, it’s advisable to compare the relevant period to the most representative average figures you have. The more interactions in a given period, the more engaged your customers are - simple.

Proactiveness

Proactiveness is whether or not a customer was prompted to engage with your brand. This may be in the form of a reward, for example, or any other kind of incentive or prompt. While it’s not a bad idea to incentivize certain interactions and things like social shares, organic customer engagement is the holy grail.

Repetition & Frequency

This is quite self-explanatory. When it comes to engaging customers, consistency is key. You can have a positive interaction with a customer, then do nothing about it and subsequently lose them as a customer. Your interactions with customers have to be positive, frequent and personalized - nothing else will do. When it comes to measuring customer engagement, recency, frequency and repetition of interactions are all significant markers.

Context

Context is everything. In this sense, it means the stage of the customer lifecycle or buyer journey in which the interaction takes place. When it comes to context, the earlier you can make the first interaction, the better. This doesn’t mean being overbearing or constantly approaching customers, but rather finding the correct point at which you can communicate the right message to your customer, regardless of their stage in the buyer funnel. However, consider context in the sense of promotions as well - a customer won’t need to be as engaged to purchase a product or service if there’s a promotion ongoing.

Volume

The more volume, the better (almost). The less volume, the worse. In moderation. Make sure you’re covering all bases and making contact with your customer at every point in the buyer journey, but only with relevant and helpful content. There is no such thing as too much volume as long as you’re receiving interactions in return. If you’re not receiving any interaction, it’s safe to say your engagement tactics aren’t working.

How to Measure Customer Engagement - The Different Metrics

Customer engagement isn't a particularly concrete notion. As a result, we're left with a lot of measures, but no specific one for measuring customer engagement precisely. I would argue that customer engagement should be measured using an equation that contains variables reflecting dimensions of longevity, recency, frequency, proactiveness, context and volume.

Unfortunately, nobody has formulated that equation yet, which means that customer engagement measures are generally ballpark figures that measure a separate, although closely related, construct. The most common measures are:

  • Customer Loyalty: This one is incredibly ironic, because there's no concrete measure for customer loyalty either. Nonetheless, it remains one of the most widely cited 'measures' when people are seeking to analyze the state of their own customer engagement.

  • Customer Satisfaction: Although more of a concrete measure than customer loyalty, customer satisfaction has essentially nothing to do with engagement, and so should not be used to measure engagement.

  • Customer Effort: This one makes a little more sense. But only for negative engagement. If that's something you want to measure (and you should) then customer effort scores are a great start to determining the severity of your negative engagements with customers.

  • Sales: Again, this isn't the most sensical measure. Most people buy petrol at the same station more often than not. Are they engaged with the brand of the petrol they get? Probably not, but there are few brands they spend that much money on.

  • Frequency of Contact: This one is a bit more accurate in measuring engagement, particularly when the customer has a say in how frequent the contact is. However, it's not perfect. Research shows that customer relationship only improves with contact frequency in short-term relationships.

  • Number of Subscribers: If you also offer a non-subscription model, having subscribers is one of the best indicators of customer engagement. It's simple - the more subscribers, the more engaged your customer base is.

  • Customer Reviews: A review is a customer engaging beyond the normal level - especially positive reviews. Sure, it's not always a positive review, so maybe not positive engagement. However, what this does do is give you powerful insights for product development and adjustments.

  • Dwell Time and Repeat Visits: This one is more related to e-commerce, but many people see it as a gauge of engagement. Dwell time in particular is an ineffective measure, as it does not necessarily involve any engagement with your brand, or even a purchase. Customer engagement is more complicated and nuanced - and more difficult to achieve.



Customer Engagement Strategies

Engagement Points & Triggers

If you’re targeting engagement, step one is to take your existing engagement points and form your engagement strategy from there. Analyze previous peaks in customer engagement, successful campaigns, and your top platforms for engagement - these should be your starting point.


From there, it’s time to decide on your triggers and filters. That is, what’s going to sound the horn to start an interaction with a given customer. This could be an automated email for a customers birthday with a reward or discount, an email or marketing campaign triggered by cart abandonment, or a marketing campaign targeting only customers that have taken a specific action, for example.


Don't Let the Moment Pass

When it comes to customer engagement, customer retention and beyond, time is money. When you've had a (potentially) valuable interaction with a customer, the following 24 hours are key, with conversion rates dropping by over 50% after 24 hours without contact. Not only that, but conversion rates are 8 times larger in the first five minutes.


Engaging customers is about being convincing and providing compelling content to them on a timely basis. Customer engagement goes far beyond selling a product - you're selling an image, a brand experience, even a lifestyle in certain instances.


Model Your Past Success

If you've already achieved customer engagement, you'll be able to do it again. Your first port of call when deciding how to design your engagement campaigns should be history. Take a look at your best existing customers, the customers that actively interact with your brand and engage with you. Why are they like that?


If you can figure out that question, you're ready to go. Take a look at what your most engaged customers have in common - what campaigns they've all been exposed to, what promotions, rewards or discounts they may have received, or if any gamification or personalization tactics have been used on them. Then, simply think of how you can replicate this experience for the customers you want to engage.


Encourage Customer Feedback

Regardless of what they say, people are vain. They love seeing pieces of themselves, whether it be in another person, in a product, or another way. Giving people an opportunity to have something reflect their personality or preferences more can only lead to more engagement.


Invite customers to provide suggestions and feedback on not just your product or service, but the service quality, brand experience and customer experience, even the campaigns and promotions they’ve been exposed to.


Build an Identity & Stick to It

Ironically, after encouraging feedback in your product and beyond, we're here to tell you not to change it too much. In all seriousness, building a brand is essential to engagement. People buy products, but buy in when it comes to brands.


Your brand does not have to be strong in its personality, but your message needs to be clear. You are who you are because of what makes you unique, what you represent and the image you portray - stick to that. When it comes to branding, it's often better to be a few people's shot of tequila rather than everyone's cup of tea.


Personalization

Again - people are vain. When it comes to personalization, the smallest things can make a big difference. Within your opportunities to engage customers, there is generally an opportunity to personalize that engagement.


Think of cart abandonment emails - go beyond regular 'You Forgot This...' emails and provide some recommendations based on customer preferences or purchase history. This is just a simple example, but don't forget that gestures on a more personal level, although more difficult to maintain and often more expensive, are far more effective in creating meaningful and lasting connections with your customers.

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