Customer Engagement

What is customer engagement?

Quite a buzzword among online businesses today, customer engagement is a measure of a brand’s interaction with its customers across all touchpoints throughout its lifecycle. Consistently engaging customers on a variety of channels helps brands build and strengthen a ‘human-to-human’ connection with them and adds value beyond just transactional relationships. 

If there’s anything that hasn’t changed from the good ol’ brick-and-mortar times to this day and age of thriving online businesses, it’s the firm belief in the mantra ‘Customer is King’. With iconic marketing campaigns such as ‘Share a Coke’ (Coca-Cola) or the ‘Big Sleepover’ (Ikea), giant multinational corporations have taught us that customer engagement is a key pillar of any other business strategy for happy, returning, and loyal customers.  

Customer engagement is no longer limited to sales, support, or services; instead, it’s an ongoing practice of brands anticipating customers’ needs and keeping in touch with them to foster lasting relationships, loyalty, and hence, business growth. 

Often used interchangeably, customer engagement or visitor/user/ client engagement involves actively interacting with your audience with messaging that interests, educates, or motivates them, and encourages two-way conversations with your business at each stage in the buying journey. 

Think of it as a friendly conversation between your brand and your customers. This conversation happens not only when they make a purchase but at every step of their journey with your business.

To drive customer engagement, it’s crucial to listen and respond to your customer’s feedback and needs. This means actively seeking their opinions and using this valuable information to improve your products or services. When consumers feel heard and valued, they are more likely to become loyal advocates for your brand, spreading positive word-of-mouth.

Moreover, customer engagement is not a one-size-fits-all strategy. Different customers may prefer different channels of communication, whether it’s through emails, social media, or even in-person interactions. 

Understanding these preferences and adapting your approach accordingly is key to building lasting relationships and driving business growth. In essence, customer engagement is the heart and soul of a thriving modern business, where genuine connections with customers lead to success in the long run.

With more and more businesses adopting the customer-centric approach while developing their marketing strategies, customer engagement inevitably holds center stage in order for them to build top-of-mind awareness and achieve the intended inbound growth.

In a world where online businesses are booming, customer engagement plays a pivotal role in distinguishing one brand from another. It’s not just about making a sale; it’s about fostering trust and loyalty. 

Customer engagement isn’t limited to flashy marketing campaigns or special promotions. It’s about being there for your customers when they need you, whether it’s answering their questions, resolving issues, or simply sharing valuable information. 

Moreover, customer engagement isn’t just the responsibility of one department within a company. It’s a collective effort that involves everyone from marketing and sales to customer support and product development. It’s about understanding your customers’ needs, expectations, and feedback, and using that insight to improve your offerings and create better experiences.

Importance of customer engagement

Implementing an effective customer engagement strategy can have numerous benefits for businesses. Here is a list of benefits it brings with it.

• Builds strong customer relationships and increases customer loyalty
•  Increases customer retention and reduced churn
•  Creates cross-selling and upselling opportunities
•  Increases subscribers and enhances audience reach
•  Creates shorter purchase cycles and improved conversion rates
•  Create brand evangelists and word-of-mouth marketing
•  Establishes a distinguishable brand identity
•  Enhances customer service and satisfaction

By engaging customers across various channels and touchpoints, businesses can form stronger connections and earn loyal customers. Regular interaction, addressing customer needs, and adding value to their lives foster a sense of care and encourage repeat purchases. 

Customer engagement also contributes to improved retention rates and reduced churn, resulting in increased profits. Research by Bain & Company states that a 5% increase in customer retention produces more than a 25% increase in profits.

Analyzing engagement data enables businesses to personalize recommendations, leading to better cross-selling and upselling opportunities. It also helps in increasing subscribers by demonstrating the value a business offers and staying top of mind. Furthermore, engagement shortens the sales cycle, attracts prospects, and creates brand evangelists who actively promote the business. 

Finally, customer engagement contributes to establishing a distinguishable brand identity and enhances customer service by allowing proactive interaction and providing support beyond ticket resolution, leading to higher customer satisfaction.

Eight metrics to measure customer engagement

Customer engagement is essential for businesses, though there’s no definitive formula to measure it. Several key metrics can help estimate engagement levels: retention rate, churn rate, customer lifetime value (CLV), time spent on the platform, click-through rate (CTR), and social media engagement. 

Additionally, direct user feedback through NPS/CSAT scores and online reviews provides valuable insights into customer interactions across touchpoints. 

Engaged customers are more likely to stay loyal, refer others, and make repeat purchases, making these metrics critical in gauging customer engagement for online businesses.

Types of customer engagement 

Earlier, companies could only gauge user engagement through transactions. But in this technology-driven age, companies can assess the various meaningful ways in which customers engage with their brand. Here are four types of customer engagement methods brands keep track of. 

Emotional engagement 

When customers are emotionally engaged, they have a deep and personal connection with a brand. They feel positively about the brand, trust it more, and convert into loyal customers. Emotional engagement also stems from factors like shared values, exceptional customer experiences, compelling storytelling, and resonating with customers’ emotions. It is certainly an important aspect of customer engagement strategies as it goes beyond transaction interactions, tapping into the emotional aspects of the customer-brand relationship. 

Social engagement 

Discussions about your brand, product, or services are constantly happening online, especially on different social media channels, regardless of whether you actively participate or not. When people have a positive experience with your brand, they share it on their social media profiles, spreading the word to others. On the flip side, when they have a negative experience, they may also spread negative comments hurting your brand reputation. Therefore, online customer engagement on social media has a greater impact on people’s purchasing decisions than any marketer or influencer. 

Engagement of convenience 

In the engagement of convenience, customers interact with a brand because it offers them convenience through its product or service. Any interaction that enhances convenience not only benefits customers but also provides the brand or retailer with valuable insights into each customer’s unique preferences, purchasing patterns, or budget preferences. This information can be leveraged to align your brand’s offerings with the customer’s specific context and needs. 

Let’s say, an online food delivery company tracks customers’ order history and preferences to offer personalized suggestions, saving the customer time and effort. This tailored approach motivates the customer to keep using the service due to the convenience it offers. 

Contextual engagement

Contextual engagement is when you use customer data to deliver highly relevant and personalized messages to customers based on their specific context or situation. Consider you searched for hiking boots online, and while reading a hiking blog, you see an ad displaying the same boots you searched for, along with a discount offer. This is an example of contextual engagement where the brand uses your browsing behavior to deliver a targeted offer. Real-time customer engagement is a part of this as it involves the process of identifying customers’ actions and offering the next best action to take in real time to further engage them with your brand. 

Five strategies to increase customer engagement

To improve consumer engagement, you need a solid marketing strategy that focuses on establishing connections with your audiences at every touchpoint across all channels. This is called customer engagement marketing. Here are some key customer engagement strategies or best practices you should adopt to ace this style of marketing and get the results you want. 

Leverage user behavior analytics

To optimize customer engagement on your digital properties, use tools like VWO’s AI-powered heatmap generator to analyze user behavior. Heatmaps offer insights into click and scroll behavior, while session recordings provide interactive visuals of visitor interactions. For marketing channels like email, push notifications, social media, and chatbots, rigorously track and analyze interactions to identify areas for improvement. Explore VWO’s features through a free trial for better insights.

Set clear and practical objectives

After conducting research, define SMART goals and key metrics for each customer engagement campaign. Regularly assess and adjust these metrics to align with evolving business trends and industry innovations.

Map customer journeys

Enhancing the customer experience involves a tailored approach at each stage of the customer journey. For instance, brands can improve awareness through captivating social media posts and first-time visitor promotions. During the evaluation phase, user-friendly websites and virtual try-on features enhance the experience.

A streamlined purchase process with minimum steps improves conversion at the purchase stage. Personalized post-purchase emails and product recommendations contribute to satisfaction at the post-purchase stage. Maintaining engagement and loyalty is achieved through personalized newsletters and exclusive offers.

Finally, advocacy is encouraged with handwritten thank-you notes and referral discounts. These strategies create a comprehensive enhancement in the overall customer experience and foster brand loyalty.

Create segments for tailored experiences

Segment your customer base to deliver more relevant experiences. Define customer segments based on factors like purchase behavior, geo-location, device type, and interaction timing for targeted campaigns that align with their needs and behavior.

Craft a definitive omnichannel strategy

Create an omnichannel strategy based on your data and goals. This strategy should include buyer personas, engagement at touchpoints, seamless interaction across channels, leveraging opportunities like product launches, and an actionable customer engagement plan for immediate implementation.

From small tweaks in your current campaigns and approach to experimenting with completely new ones, your customer engagement strategy should encompass it all. However, it should be ever-evolving so you can incorporate your learnings at any point and make the necessary modifications.

How to drive customer engagement? A guide on various channels with examples

Owned digital properties (website/mobile App)

• Optimize your website and app for a seamless user experience.
• Offer valuable and personalized content.
• Incentivize customers with relevant offers and incentives.

Emails

• Use compelling subject lines to improve open rates.
• Ensure mobile-friendliness.
• Offer value, avoid being too promotional, and share customer success stories.

Here’s an example of an interesting year-in-review email from Spotify: 

Web push notifications

• Optimize opt-in messages for conversions.
• Send regular updates and personalized notifications.
• Avoid spamming to maintain engagement.

Here’s an example of the same:

Chat: human and bots

• Use live chat for real-time assistance and personalized recommendations.
• Retarget returning visitors and streamline the buying process.

Social media

• Respond to mentions and engage in topical content.
• Be consistent with posts and respond to customer complaints.
• Use interactive posts like polls and quizzes.

Here’s an example of an engaging Instagram post by Netflix: 

Video

• Experiment with different video formats, including interactive ones.
• Incorporate video testimonials and vlogs to engage customers.
• Host live sessions to answer customer questions.

Here’s an example of a Facebook Live expert AMA session video hosted by Sephora:

SMS/text messaging

• Personalize SMS messages based on historical data.
• Use visual elements like emojis and images.
• Send reminders and updates on loyalty benefits.

Mobile app push alerts

• Utilize push notifications to enhance app engagement and retention.
• Send personalized recommendations and reminders.
• Innovate with rich notifications and behavioral targeting.

Voice assistants 

• Explore the potential of voice assistants for conversational marketing.
• Use AI-powered technology for real-time interaction.
• Build deeper customer relationships through voice-based communication.

By implementing these strategies across various channels, you can effectively drive customer engagement and enhance your overall user experience.

Key steps to acing customer engagement strategies

No matter what your customer engagement ideas are or on which channels you want to roll them out, there are key three steps you should be following to get the best result out of your strategies. 

Conduct behavioral research 

Gather visitor data: loyalty, social, and support. Understand engagement factors. Use surveys, heatmaps, and funnel analysis for user preferences and obstacles.

Connect insights to metrics

Once you have insights from visitor behavioral analysis, it is important to connect them with your key metrics and find ways to leverage those insights to achieve your main goals. For example, let’s say you notice a recent drop-off of returning customers on your website when analyzing the funnel. As a result, you come up with a new customer engagement idea: displaying product recommendation tiles on the homepage based on a user’s previous purchases. 

Analyze and iterate 

Analyze the outcomes of your customer engagement ideas. Identify any shortcomings or areas that can be improved upon. Continuously iterate and generate improved ideas to optimize for conversions. 

Actionable ideas to boost customer engagement

Take inspiration from these 6 actionable ideas to ace customer engagement.

Create a customer-centric content marketing strategy

The key to inbound marketing success is customer-centric content. Define buyer persona, anticipate needs, create strategy, align content, set guidelines, formats, posting frequency, promotion, and measurement.

Gamify your digital experiences 

Boost engagement with the following gamification ideas:

• Social media contest for new product promotion.
• Website quiz with gated resources.
• Treasure hunts for special events.
• Games for loyalty rewards and prizes.

Here’s an excellent example of a contest run by Wok To Walk on Instagram to drive engagement: 

Continuously collect and incorporate customer feedback

Value customer feedback for better engagement. Use pop-ups, offer incentives to customers to fill out a detailed survey, live chat, and emails to collect input and build strong relationships.

Humanize your brand communication

Humanize brand communication for better customer engagement. Use empathetic storytelling in blogs, build a community on social media, and stay transparent. Utilize videos and podcasts for a personal touch.

The eCommerce giant, Flipkart has created an official Twitter handle (Life @Flipkart) to share cultural updates, news, and stories regarding happenings within the company such as employee stories and so on. A great example of how a brand can humanize their social media communication.

Personalize customer experiences and communication

Win customers with personalized messaging. Use data to understand behavior and preferences. Tailor experiences based on history, demographics, interests, and more. Segment email lists, recommend products, and customize deals for engagement. Explore personalization opportunities with collected data.

Following is an example of a personalized push notification for a cart abandonment campaign: 

Create exclusive engagement strategies for power users

Nurture engaged customers, offer exclusivity, and gather feedback. Create a loyalty program; it boosts retention and engagement. Market it for better metrics.

The perfect example of a brand making the most of customer loyalty to drive engagement is Starbucks. Their exclusive rewards program allows members to earn points on every penny spent, which can later be redeemed when placing orders.

Customer engagement for B2C Vs. B2B

Customer engagement strategies differ for B2C and B2B businesses in terms of success metrics, communication channels, content formats, and messaging style. B2C focuses on dynamic engagement metrics, multichannel presence, short-form content, and emotional appeals. B2B uses linear success metrics, emphasizes traditional channels, retains long-form content, and offers tangible value. While distinctions are clear, there is overlap, and innovation is reshaping engagement practices. Businesses must adapt with relevant, contextual, and innovative campaigns in the evolving experience economy.

Here’s a look at recent holiday campaigns by a B2C brand (Macy’s) and a B2B one (Vidyard). 

While the contrast between customer engagement for B2C and B2B is extremely prevalent, it isn’t set in stone as there is quite a fair amount of overlap between the two, and constant innovations in both spheres are challenging conventional wisdom and best practices. Therefore, to stay afloat in this ever-dynamic experience economy, businesses can only work to ensure their engagement campaigns are relevant, contextual, enticing, and innovative.

What are customer engagement platforms & why are they important?

A customer engagement platform is an automation tool that centralizes, automates, and analyzes customer interactions across touchpoints, enhancing customer experiences and driving growth. It monitors journeys, offers insights for targeted communication, and automates tasks like workflow building, omnichannel communication, personalization, and analytics. It empowers teams to focus on innovation rather than manual tasks, improving engagement and leveraging technology for data-driven decisions. Without it, teams waste time and effort, while a platform boosts efficiency and engagement metrics through technology-backed strategies.

Customer engagement vs. customer experience vs. customer satisfaction

Often confused with the other or assumed to be the same, customer experiences and customer engagement are actually quite distinct concepts. While they aren’t the same, they do work together in impacting and determining a business’s overall success. 

Customer experience is how customers perceive interactions with a business, influenced by factors like speed, convenience, and value. Customer engagement is the sum of interactions encouraged by the business but driven by the customer, aiming to nurture a relationship and provide value. While customer experience is an input and output for engagement, the two are correlated, as positive experiences foster engagement. Customer satisfaction is overall contentment with a product, while customer engagement involves active participation and interaction with the brand beyond satisfaction.

Customer engagement case studies 

Travel – LA Tourism

With a mission to promote the rich and diverse city of Los Angeles and uplift its tourism economy, LA Tourism is the official, privately owned, tourism marketing organization of LA. Since they are primarily responsible for undertaking the sales and marketing efforts to drive and boost tourism in the city, they are constantly on the lookout for newer channels that can help them engage better with their audience and meet this objective. 

When the teams at LA Tourism discovered push notifications, they were instantly keen on trying it out for their website as they felt that this rapidly growing channel was as non-intrusive as it was attention-drawing. The first-ever campaign they ran turned out to be a huge success and further added to their enthusiasm. The very first push notification itself received a CTR of 16%, making them realize that push notifications were going to be a remarkable asset for their marketing strategy. 

They decided to go a step ahead and personalize their push messaging to increase its relevance for its subscribers. They segmented their user base and categorized users basis the pages they had previously visited. The aim of this exercise was to simply understand what a particular visitor was keen on reading and exploring so they could be targeted according to their interests. They went as far as pulling out granular information regarding visitor behavior such as niche categories visited, the number of times a particular post was visited, the last article visited, etc. They then created user buckets basis the granular information collected regarding their visitors’ interests and sent out customized notifications for each segment. 

As a result, the teams at LA Tourism saw an 8X increase in their click-through rates once they started using segmentation and sending out personalized notifications. Their website traffic also increased significantly, and the bounce rate decreased by 43%.

Technology – AMD 

Based out of Santa Clara, California, AMD is a multinational semiconductor giant that creates computer processors and other electronic components for businesses and consumers. Upon analyzing their engagement metrics, the teams at AMD came to realize that there was plenty of scope for improvement. They decided to go ahead with A/B testing to optimize their site and boost engagement. 

AMD consistently publishes posts on industry trends, news, and updates about their company and latest offerings on their official website and encourages their visitors to share them on social media to drive traffic as well as engagement. To facilitate social sharing, they had embedded a ‘Share This’ icon below every post in the footer of the page. 

The online marketing team at AMD had doubts about whether the placement of the icon in the footer was optimal. Hence, the first hypothesis they came up with was that making the icon more visible would help boost the number of shares received. They created an A/B/n test that experimented with the icons and their placement of the social sharing button. They designed 6 variations with various positions (left, right, bottom) and appearances (icon/link, large chicklets, small chicklets) and ran the test on one of the most frequently visited and shared sections of their website, Support & Drivers (http://support.amd.com).

After running the test for 5 days on the subdomain and achieving a statistically significant result, the test findings were analyzed. The tested subdomain demonstrated a 36X increase in social sharing as compared to the original site. Based on the test results, the team decided to go ahead with the left-position chicklet version with dynamic adjustment based on the browser window size.

SaaS – Chargebee

Founded in 2011 and based out of California, Chargebee is an automated subscription billing software used by local and global SaaS and other subscription-based eCommerce businesses. It integrates with leading payment gateways and helps businesses seamlessly manage subscriptions and invoicing by automating recurring billing and payment collection. 

The Chargebee blog comprehensively covers trends, stories, and news from the SaaS industry as well as the latest updates and offerings from their business. The blog has a two-fold aim – establishing brand awareness and nudging potential buyers down the conversion funnel. While their blog is a valuable asset, the marketing team at Chargebee is always on the lookout for newer avenues to reach out to their audience and drive traffic and engagement to their blog. With the same objective in mind, they decided to give push notifications a try. 

In just 3 months, they were able to get close to 2,000 blog visitors to subscribe to notifications from their website with an average subscription rate of 30 per day. Once they started sending out push messages to their subscribers, they were extremely satisfied with the results. The best click rate they received from their first campaign was 17.11%, the notification was delivered to 533 subscribers, with 92 people clicking on it, and the average session duration was 2.5 minutes.

The teams at Chargebee came to realize that if used effectively, push notifications could significantly boost their engagement metrics. They, therefore, decided to send out a notification each for every post they published on their blog and even one each to promote their old content pieces. Along the way, they also came to realize the importance of timing the notifications and sending subsequent reminders to maximize engagement. All these efforts added up to a 200% increase in the click rate and a substantial increase in the subscriptions per day.

You can find more interesting examples in this blog where leading brands across industries have put the spotlight on customer engagement and supercharged their growth.

Top 5 customer engagement tools for you to try

With so many options available in the market, it can be overwhelming to make the right pick. Here are 5 tools that can boost your customer engagement.

VWO

VWO is an experimentation platform with robust capabilities for improving customer experience, engagement, and retention. Be it your marketing team or product engineering team, everyone can use VWO for either setting up simple website A/B tests or server-side experiments. 

VWO Insights – This capability helps you figure out why visitors behave in a certain way on your website. While funnels tell you where users drop off from your website, heatmaps show customers’ interaction points with different website elements. Based on the insights gathered, you can prepare a testing roadmap, a step towards improving your customer engagement.

VWO Testing – Develop smart hypotheses based on data-driven insights to see which experience helps drive more conversions for your online business. With this feature, you can perform A/B, split, and multivariate testing and track metrics across the funnel to measure its impact and make informed business decisions. 

VWO Data360 – Personalize marketing messages and offers by collecting first-party data from multiple sources and creating a single customer profile. By delivering contextually relevant messages to customers at the right time on the right channel, this feature helps you foster meaningful relationships with them, thereby increasing customer loyalty and engagement in the long term. Take a full-featured trial to explore more of VWO capabilities. 

AWS Customer Engagement

As there is no requirement to deploy cumbersome infrastructure, you can scale the services of AWS Customer Engagement based on your needs and conveniences. Leveraging AWS’s built-in AI, businesses can also develop a better understanding of customer behavior. 

Amazon Connect – This feature allows you to set up an AI-powered contact center and onboard agents to accelerate support to millions of customers. Maintain contact flows and track performance metrics to react to customer needs over both chat and voice. 

Amazon Pinpoint – From automating campaigns to personalizing communications, you can reach the right customer segment with the right message at the right time. Further, you can perform A/B tests to release the best online experiences to customers using this capability. 

Amazon Simple Email Services (SES) – This cloud email service provider can be integrated with any application to send emails in bulk. With SES, you can be privacy-compliant and reach users’ inboxes as a trusted sender, thereby building trust and engagement with them. 

Netcore

Netcore is one of the easy-to-use but powerful customer engagement tools that drives omnichannel growth for businesses by connecting with users across multiple touchpoints.

Journey Orchestration and Multi-channel Marketing – By collecting data from diverse customer touchpoints, you can create single customer profiles to release effective cross-channel marketing campaigns. This way, you can also identify which channel works best for customer engagement and adjust your strategy accordingly. 

App Churn Prediction –  Want to know how sticky your app is? Netcore’s app churn production feature forecasts the number of users that are most like to stop using your app, so you can re-engage them with exciting offers in real time.

SmartPush – Based on each user’s unique customer ID, you can deliver personalized app push notifications to your customers. Smartech’s servers trigger push notifications through FCB and Xiaomi gateways while ensuring that customers receive notifications only once. 

MoEngage

MoEngage empowers marketing and product teams to collect AI-driven data on one hand and creates tailored customer journeys across channels on the other hand. This versatile platform meets customer needs on every channel and for every industry. 

AI-powered Campaign Optimization – MoEngage’s AI engine Sherpa shifts your customer engagement from being reactive to proactive as it helps predict which customers are likely to churn or convert. Its Intelligent Path Optimizer allows you to identify and release the best-performing journeys for customers. 

Website Personalization – Based on visitors’ data, you can personalize your website content using MoEngage’s no-code visual builder as per their interests and preferences. You can set up such campaigns at scale very easily without requiring any development time.

Real-time Transactional Alerts – MoEngage Inform enables you to create and manage transactional data across channels – from emails and SMS to WhatsApp – thereby solving difficulties for your users in real time. 

Twilio

Twilio offers a whole gamut of APIs, serverless tools, and programmable solutions that are easy to deploy. This platform empowers you to work with intuitive tools and workflows to create unique conversations for each customer at scale. 

Twilio Engage – This feature helps capture first-time data to turn them into personalized campaigns on multiple channels to increase the lifetime value of customers. You can scale and measure the performance of cross-channel campaigns and add channels without extra engineering efforts. 

Trusted Activation – Whether you want to prevent fake account creation or trigger no-input onboarding for genuine users – you can do it all with Single Network Authentication. Further, this capability helps you ensure online transaction protection and frictionless login to improve customer experience. 

Twilio Flex – Deploy, adjust, or scale Twilio’s cloud contact center to quickly meet customer demand while saving on operations costs. Plus, your agents can leverage contextual information to power highly personalized interactions with customers. 

Conclusion 

Owing to constant innovation in engagement strategies fuelled by relentless competition among businesses for customers’ attention and loyalty, the definition, and scope of customer engagement is ever-evolving. It is no longer confined by a definitive checklist or a roadmap you can follow to win over customers. Therefore, the key to success is to keep evolving your engagement roadmap by constantly experimenting to find out what works and what doesn’t for your target audience. 

That said, the silver lining is that your customers today are more engaged, and you literally have 24*7 access to their attention. So, by leveraging data and embracing emerging technologies to ensure you are always offering something relevant, consistent, delightful, and valuable to your customers to engage with, you can easily set the groundwork to building long-lasting relationships.

Frequently asked questions on customer engagement