When you send off a marketing email, upload an Instagram post, or hit Publish on a landing page, you’re hoping a customer will make a purchase, follow your account, or otherwise engage with your business. Customer engagement is a critical component of a company’s marketing strategy because it can fuel business growth and nurture existing customers.
Here’s how to engage customers effectively and why a strong customer engagement strategy is beneficial to your business.
What is customer engagement?
Customer engagement is the process of relationship-building between a brand and its new and existing customers. By connecting with your customers, you can foster brand loyalty and increase overall sales.
Customer engagement shares similarities with customer experience (CX), but the two are distinct. Customer experience encompasses the many interactions a customer might have with your brand, from discovery all the way to post-purchase support. Meanwhile, customer engagement revolves around the emotional connection enriching the customer journey beyond a single purchase.
Benefits of customer engagement strategy
Successful customer engagement strategies lead to tangible and intangible benefits, including:
Increased profits
Engaged customers are more likely to stick around and make repeat purchases. For example, in financial services, increasing customer retention by 5% led to a profit of more than 25%. According to Fred Reichheld, who created the Net Promoter Score (NPS), serving your existing customer base is more cost-effective than acquiring new ones.
Better insights
The more your customers engage with your brand, the more data points you’ll have. You can learn more about their buying patterns and preferences, which can inform how you approach new products or future marketing campaigns.
Customer loyalty
Not only can loyal customers have a higher lifetime value thanks to repeat purchases, but they’re also more likely to become brand advocates, recommending your brand and business to friends and family. This word-of-mouth advertising can bring big results. According to a Nielsen survey of 40,000 people worldwide, 88% of respondents said they had more trust in recommendations from people they knew compared to other methods.
Customer engagement strategies
The best approach to customer engagement will depend on your current goals and the state of customer relationships. Regardless of where you are on your journey, here are a few strategies to build a deeper connection with your customers:
Center the customer
A customer-centric approach involves considering the customer’s perspective on a product or service. Put yourself in the customer’s shoes, and use that perspective to inform the choices you make.
Prior to cofounding menstrual product brand August, Nadya Okamoto launched Period, a nonprofit dedicated to destigmatizing menstruation. The experience allowed her to listen to and understand the needs of the community, a mindset she later applied to her brand.
“In nonprofits, you’re there to serve a community, right? Everything you’re doing is in response to hearing what those needs are. The goal is service,” she tells Shopify Masters. “When I look at building a consumer brand, it’s that same mentality: Who are we serving? What do they need? What are they not currently getting? And how can we do it in a way that is unique and different?”
🌟How well do you know your customers? Learn how to create a buyer persona, to help you understand your audience and tailor your content to their needs.
Focus on authenticity
Engagement is about making a connection, so putting a face to a brand and giving customers a real look at your business can result in more engaged followers. Nadya uses her personal accounts to build community.
“Being open on social is a personal decision, [but] I love being able to share my life,” she says. “As a founder, I often struggle with loneliness, and it is actually through creating online content that I feel less lonely because I connect with people.”
While it can be tempting to post frequently on her accounts to gain new followers, Nayda focuses on making genuine content first.
Talk to your customers
Prioritizing customer engagement means having conversations to understand their pain points and needs. For Crystal Landsem, CEO of fashion brand Lulus, having conversations with clients drove the company’s return to in person sales after almost a decade of exclusively digital retail experiences.
“We had talked about potentially testing into extended pop-ups or a retail store leading up into the pandemic,” Crystal tells Shopify Masters. “Obviously the world changed in 2020, so we had to pull back a little bit on in-person experiences, but as the world opened up again, [customers] just kept telling us every day, ‘Lulus, open a store near me. I’m ready for in-person. Let’s do this."
Launch a loyalty program
Loyalty programs reward already engaged customers with extras like early access, points, discounts, and exclusive experiences, but they also help to generate higher levels of engagement by incentivizing new customers to join a community of invested, repeat purchasers.
Customer engagement metrics to track
There are many ways to measure customer engagement. While business owners may have an idea of how customers feel about their band, here are a few examples of customer engagement metrics that can quantify it:
- Customer advocacy. An NPS, which captures someone’s likelihood to recommend your product or service, is one way to measure customer advocacy among your target audience.
- Customer satisfaction. A customer satisfaction score (CSAT) uses customer feedback—typically a single-question survey—to gauge a customer’s satisfaction.
- Customer effort. A customer effort score measures how much effort a customer had to exert in a given interaction, like asking a question or resolving an issue. A lower effort rating correlates to high levels of customer loyalty.
- Frequency of contact. The quantity and tenor of customer interactions can be a good reflection of customer engagement. A customer relationship management (CRM) platform can track those interactions across various touchpoints and platforms.
- Social media engagement. Social media platforms offer analytics tools to make sense of your engagement rates, breaking down which types of content perform best, traffic patterns, and optimal timing for your social media campaigns.
Customer engagement FAQ
What is good customer engagement?
Good customer engagement is like any good relationship: a combination of listening and thoughtful action. It includes anticipating and adapting to customer’s needs, proactively reaching out to them through various channels, and giving them an opportunity to feel involved.
Is customer engagement the same as customer service?
Though intertwined, the two concepts aren’t the same. Customer engagement refers to the entirety of a customer’s relationship with a brand, from discovery to purchase and beyond. Meanwhile, customer service is a set of interactions a business might have with its customers, usually in pursuit of a solution to a request or problem.
What is an example of customer engagement?
Customer engagement is a spectrum. A customer liking or responding to a brand’s social media post is one kind of engagement, while an in-depth interview or conversation between a brand and a longtime customer is another.
