What Is Customer Engagement? How To Improve It?

Customer Engagement Strategy is essential for sales success, whether you deal in a B2B or B2C.

Why?

With the rapid innovation of new AI tools & new mediums of communication, marketing trends are constantly changing. Also, the tastes & preferences of customers are changing rapidly.

But what remains constant is having strong customer engagement on your side. 

Imagine you walk into a shoe store. You want to buy a nice pair of white sneakers. But there’s no staff to greet you, or in fact, none of the staff is coming forward to help you with the purchase. You struggle to find your size.

Finally, when the store manager sends one staff for your help, he goes to the store room and doesn’t come back.

How would you describe this experience as a customer?

“Bad” – in a single word. And you’re unlikely to visit this shop to buy your next pair of shoes.

This is a classic example of a bad customer engagement that happened in-store. 

But your engagement with the shoe store or brand could have started way before. It could have been an online ad, reviews on Google or Yelp, or a recommendation from a friend. 

Whatever the case.

Customer engagement sits at the core of all your business activities.

In this blog today, we’ll be discussing the meaning of customer engagement, customer engagement strategies, and the metrics that will help improve customer engagement in your business. 

So, let’s jump right into the basics.

What is customer engagement? 

Customer engagement is the way businesses positively interact and develop relationships with their customers through a variety of channels. It’s about creating a positive customer experience that goes beyond your customer’s expectations. 

It’s the way businesses make customers feel valued, understood, and appreciated by fostering a sense of connection with them. This sense of connection encourages customers to become the brand ambassadors (‘read as unofficial brand ambassador’) of a business and loyal customers.

Customer engagement for both B2B & B2C encompasses the interactions and connections established between a company and its customers. 

In B2B interactions, this engagement manifests as ongoing, personalized communication, collaborative problem-solving, and strategic alignment to fulfill corporate clients’ needs. 

B2C engagement focuses on crafting personalized experiences and timely communication to foster customer loyalty and drive repeat purchases. 

Why is customer engagement important?

Customer engagement is important for any brand. An actively engaged customer is not only likely to make more frequent and long-lasting purchases but can also evolve into a brand advocate. These advocates play a pivotal role in attracting new customers, rekindling lost relationships, and fortifying existing ones.

Having a strong customer engagement strategy helps you achieve the following: 

Building Customer Loyalty and Trust

Customer engagement builds customer loyalty & trust for your brand. Thus, you don’t have to spend some extra amount to retarget your existing customers. 

Meeting Customer Expectations

By continuously engaging with customers, you make sure that their evolving expectations are consistently met.

Winning Stalled Customers

Actively engaging with potential customers who have stalled out (Stalled customers have shown interest in your product or service but have not progressed further in the sales cycle) can bring them back to the brand.

Developing Customer Success Stories

Engaged customers often become the subject of success stories, which can be utilized as valuable material for case studies, showcasing your brand’s positive impact. 

Boosting Brand Experience

Customer engagement boosts brand experience for your first-time customers when they’re shopping from you. Providing quality customer engagement keeps you at the top of their mind when they are buying the same thing next time. Also, it helps create brand awareness. Your logo plays a big part in this, so if you don’t have one yet, consider using a logo maker to easily create one.

Leveraging Data-Driven Insights

Customer engagement provides valuable customer data & feedback such as individual preferences and broader market trends that you can use to optimize your sales funnel & product/service development further.

Increasing Sales Velocity

Customer engagement increases sales velocity (measuring how quickly a sales team closes deals and generates revenue) for the B2B sales context. 

What is a customer engagement strategy?

A customer engagement strategy is a plan that focuses on developing relationships between a business and its customers. It involves creating meaningful interactions, fostering trust, and satisfying customer needs through personalized experiences. 

This strategy aims to make customers feel valued, understood, and an integral part of your brand’s journey.

7 Customer engagement strategies & ideas 

Improving customer engagement is crucial whether you sell products or provide services. 

A study by Bain & Company found that companies that excel at customer engagement achieve 20% higher sales growth.

Here are the top 7 customer engagement strategies that you can apply to supercharge your sales process.

1. Understand Your Customer Journey

For the implementation of a great customer engagement strategy, you need to understand the path your customers take to purchase your products/services. It can be a series of steps happening online or offline or both at the same time.

First, mapping out your customer journey would help you discover the channels your customers take while buying your products. And you’d also be able to find out the bottlenecks & challenges your customers face while going through the channels. 

Based on this, you can understand their needs, problems & behaviors, which will help you deliver more personalized customer engagement opportunities further.

Additionally, this data helps you create a customer profile (a.k.a buyer persona) which you can leverage for engaging as they prefer. 

2. Provide Omni-channel Support

Providing omnichannel support as a part of your customer engagement strategy is a necessity today. 

According to research by Invesp, companies having omnichannel customer engagement retain, on average 89% of customers. On the contrary, companies with weak to no omnichannel customer engagement are able to only retain 33% of their customers.   

The bottom line here is to meet your customers where they belong.

What do I mean by that?

Well, these days, customers engage with brands everywhere, starting from Instagram to calling. After carefully studying your ICP (Ideal Customer Profile) create a seamless communication strategy spanning across multiple channels. However, most customers ignore the brands with low Instagram followers as it indicates that your brand is not popular among the customers; that’s why it is ideal for brands to get 10k Instagram followers online to boost their brand awareness and customer engagement on Instagram.

It can be a combination of offline & online channels such as Instagram, Email, Calling, Linkedin, Twitter (currently X), reviews,  in-person visits, FAQ directories, etc.

As a business, you may have multiple multiple sets of buyers. Connect with them through their preferred medium of communication. 

For example, generally, buyers between the age group of 18-28 years would possibly prefer to engage with your brand on Instagram or Facebook. On the other hand, middle-aged buyers (let’s say 30-55 years or more) would love to interact via email or phone. A particular set of buyers (who are active on X) might engage with you over X threads. 

Make sure your support team is trained in handling questions and objections on those platforms. 

And BTW keep your brand voice, style & communication consistent across all the digital channels.

3. Leverage Data-driven Insights 

To improve customer engagement, use tools that analyze your customer’s overall purchase journeys and their nature of engagement. This will help you understand your customers better, create customer segmentation based on communication channels, and offer a personalized customer experience. Use the following tools to get started: 

• Customer Insights Tools: These tools help businesses collect, analyze, and understand their customer data. This data may be quantitative in nature e.g., purchase history, demographics, etc., or qualitative e.g., customer feedback & social media mentions. These data can be used to identify customer trends, needs, etc., providing scope for improvement for marketing & customer service initiatives. 

Example: WebEngage, GW, Lexe, etc. 

• Customer Analytics Tools: Analytics tools such as Google Analytics provide analysis of data collected from customer engagement on your website, etc. It can be used to develop predictive models that can forecast future customer behavior, such as churn (when a customer stops doing business with a company) or purchase behavior. This information can be used to proactively reach out to customers and take action to prevent churn or increase sales.

Example: Google Analytics, Amplitude, Kissmetrics, etc. 

• Customer Segmentation Tools: Every business has different sets of buyers with different needs and behaviors. 

For example, YouTube, the world’s number #1 video-sharing platform, has YouTube Kids for Kids. Then there’s YouTube for adults. YouTube music for music lovers regardless of their age. 

Customer segmentation tools help you identify such groups of customers so that you can target them through personalized & segmented communication for better customer engagement. 

Example: Twilio segment, CleverTap, etc.

4. Gather Customer Feedback 

You can’t improve customer engagement without getting real customer feedback. 

It’s tough to grow your customer base without knowing what’s going on in their minds.

Gathering actionable feedback from your customers is essential as it helps you become more customer-centric. On top of that, having this information also helps you understand the likelihood of customer referrals.

Collect all your customer feedback in a place, analyze them, and build your service/product around that. (that’s the formula SmartReach has been applying since its inception. So, every feedback from you matters to us 🙂 ) 

For collecting actionable feedback from customers, use customer surveys using the NPS or CSAT method. 

Having a great NPS or CSAT score will give you a better Customer Lifetime Value & increase organic brand awareness. (more about it in the metrics section of the blog)

If you are unaware of what NPS or CSAT is, check out this video.

5. Offer Chatbots In Live Chat for Support 

Implementing a chatbot along with live support is essential. About 79% of customers prefer using live chat because it offers immediate responses.

AI chatbots analyze data & answer questions users ask before and after they purchase your product/service. Thus, you can program these chatbots to recommend to the site visitors for particular services/products. 

It makes a prospect’s decision-making process easier for that purchase.

But be careful, chatbots can’t answer custom queries. So, having customer support agents is helpful for answering those detailed queries asked via emails and website chat support. 

6. Launch Customer Loyalty Programs

A customer loyalty program is a scheme run by brands to incentivize their loyal customers through points, gift cards, discounts, coupon codes, etc. It’s a great hack to engage customers in product/service offerings. 

Think of Starbucks for example. Every time you order something from them, you get a star based on the billing amount. You can get free drinks by encashing these stars once you reach certain points in your Starbucks account. 

Customer loyalty programs are a great customer engagement strategy that not only increases customer lifetime value but also increases brand loyalty.

7. Build A Content Hub

What do I mean by ‘Content Hub’? 

Well, a content hub is a centralized knowledge base where you will offer content such as video tutorials on implementing your product/service, support documentation, DIY documentation, etc. to the customers. 

A study by Coleman Parkers concluded that 91% of respondents would use an online knowledge base if it were available and tailored to their needs. This will put some burden off your support team. 

This kind of content will educate prospects and help them take the necessary steps in the purchasing process. Also, the DIY docs will help them implement the product/service themselves.

BTW don’t forget to check out SmartReach’s Knowledge Hub. We have got so much helpful information on cold emailing. 

Let us know what more can be added there.

Essential Customer Engagement Strategy Metrics

Customer engagement metrics help you measure customers’ interactions with your brand.

It’s an important element of the customer engagement strategy. These metrics provide valuable insights into customer behavior, preferences, and satisfaction. They also help businesses refine their strategy and enhance customer relationships. 

Here are some key customer engagement metrics that are particularly important in B2B settings: 

1. Customer Lifetime Value (CLV) 

CLV is the total revenue a business makes from a single customer over his/her lifetime with the business. It’s calculated by considering average order value, purchase frequency, retention rate, etc. 

CLV = (Avg. Purchase Value X Avg. No. of Purchases) X Avg. Customer Lifespan

From the POV of business, a high CLV indicates a customer is loyal & worth investing in for nurturing. 

2. Customer Retention Rate (CRR)

CRR is the percentage of customers who continue to purchase from a business over a period of time. 

Let’s say,

(N) = total customers acquired for the period you’re measuring

(S) = customers you had at the start of the period

(E) customers you have t the end of the period

CRR = ( customer at the end of a time period – new customers acquired within that time period/customers at the beginning of a period ) x 100

From the POV of a business, a high CRR indicates that a business is able to retain its existing customer base, which is crucial for long-term growth, especially for service businesses. 

3. Customer Churn Rate (CCR)

The customer churn rate indicates the percentage of the existing customer base that stopped buying from a business over a period of time. 

Customer Churn Rate = (Total customers lost for a specific time period /Total number of customers at the start of the time period) x 100

A high churn rate indicates that customers are not loyal to the brand.

4. Average Order Value (AOV)

It’s the average amount of money a single customer spends by purchasing products or services from a business. 

Average Order Value = Total Revenue / No. of Orders

A high average order value denotes that customers are making big amounts of transactions, which is good news for the profitability of the company. 

5. Net Promoter Score (NPS)

It’s a measure of customer satisfaction, loyalty & advocacy. 

You might have noticed it already on e-commerce sites such as Amazon. They ask this one simple question once you complete your purchase, “How likely are you to recommend our company (let’s say Amazon) to your friends & family?”. 

Based on the score you answer, they put you into one of these 3 categories: promoters (score range: 9-10), passives(7-8) & detractors(0-6). 

NPS = % Promoters – % Detractors

A high NPS denotes the customers are satisfied and they are more likely to advocate the brand. 

6. Customer Satisfaction Score (CSAT) 

CSAT also measures customer satisfaction with a company’s product or service. It is typically done by asking customers to rate their satisfaction on a scale of 1 to 5( 5 being the most satisfied customers while 1 being the most unsatisfied). This is also used by a lot of E-commerce sites. 

CSAT = No. of Satisfied Customers / Total No. of Customers Asked X 100

A high CSAT shows that the customers are likely to recommend your products or services and return as repeat customers.

7. User Activity

User activity metrics can be divided into two main parts:

Daily Active Users (DAU): This is the number of different people who use a product or service in one day. Some people call it a “vanity metric,” which means it might make things look good, but it doesn’t tell the whole story.

Monthly Active Users (MAU): This is the count of unique users who visit a website or use a service within a month.

Both DAU and MAU help you see patterns in how customers use what you offer. Understanding these patterns can help you make better marketing plans and find ways to keep people interested in what we provide.

8. Activation Rate

It measures how actively customers are using a company’s products or services. This is a metric for digital products/services. This can be tracked by measuring metrics such as the number of active users, the frequency of use, and the duration of use.

Activation Rate = ( Active Users / Total Users ) x 100

A high user activity ratio denotes that customers (as users) are engaging actively with your products or services. 

9. Stickiness

Stickiness measures how long customers continue to use a company’s products or services. It also measures how satisfied they are with the products/services you offer.

Stickiness =  Daily Active Users (DAU) / Monthly Active Users (MAU)

High Stickiness (low churn rate) denotes that customers are loyal & likely to remain engaged with your product/service.

10. Social Media Engagement Rate 

Social media engagement metrics provide insights into the effectiveness of your customer engagement strategy on various social media channels such as Instagram, Meta, YouTube, Twitter, etc. 

They offer data on various aspects, such as audience interaction, strategy optimization (such as likes, comments, shares, saves, reposting, etc), and the impact on your brand’s bottom line. 

By analyzing these metrics, you can refine your approach and enhance the overall performance of your customer engagement strategy online.

[ Please note that there is no fixed formula for calculating engagement scores for social media. It varies based on a company’s social media goals based on different social channels. ] 

For a basic score, you may refer to this formula,

Engagement Rate = Total No. of Engagement / No. of followers X100

TL;DR (Too Long, Didn’t Read) 

Did you miss something from the previous sections? Too bored to read all the stuff? 

We got you covered.  

Here’s your recap: 

• Customer engagement is the way the business interacts with its customers and builds relationships. 

• Customer engagement in B2B(Business-to-Business) includes ongoing, interactive relationships between a business and its corporate clients. It involves personalized communication, collaborative problem-solving, and strategic alignment to meet the specific needs and goals of the business customers.

• For B2C(Business-to-Customer), customer engagement is the continuous interaction and connection between a business and its individual consumers. It includes personalized experiences, timely communication, and the creation of value to create customer loyalty, ultimately driving repeat purchases and brand advocacy.

• Having strong customer engagement helps both in case of customer acquisition and customer retention. It’s primarily important for a business because: 

1. Customer engagement builds customer loyalty & trust. 
2. Customer engagement boosts brand experience for first-time buyers. 
3. It helps collect customer feedback & insights for the improvement of the sales funnel & other activities. 
4. It increases sales velocity which is an important factor in the B2B Sales process. 

• A customer engagement strategy is a plan that focuses on developing relationships between a business and its customers. It involves creating meaningful interactions, fostering trust, and satisfying customer needs through personalized experiences. 

• The customer engagement strategy aims to make customers feel valued, understood, and an integral part of the brand’s journey.

• Customer Engagement strategy can be improved in a number of ways. 7 most effective ways to improve it include: 1) understanding the customer journey, 2) providing omnichannel customer support, 3) leveraging data-driven insights, 4) gathering customer feedback, 5) setting up live chatbots, 6) launching customer loyalty programs 7) building a content hub, etc. 

• Some of the most essential customer engagement metrics include Customer Life Time Value(CLTV), Customer Retention Rate(CRR), Customer Churn Rate(CRR),  Average Order Value(AOV), Net Promoter Score(NPS), Customer Satisfaction Score(CSAT), User Activity, Stickiness, etc. 

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