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What is customer engagement? The complete guide for 2023

Illustration shows chat bubbles and icons that indicate customer interaction
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If you owned a business, wouldn’t it be nice to know how your customers feel about the job you’re doing? Of course. But if you’re not psychic, how can you learn what your customers want or need from you? By talking to them! This is what we call customer engagement — and it’s more important than ever.

89% of customers would love the ability to have a conversation with your brand. Your customers are ready to engage with you. The key is knowing where and how you can initiate meaningful conversations. Luckily, there are tons of great ways to get proactive and start benefiting from powerful two-way interactions.

We’ll show you all the customer engagement tools you can use to scale personalized conversations, remove friction, and offer customers insight-driven solutions throughout their journey, reducing the chances they’ll need to reach out for support later.

Continue reading to find out how conversational customer engagement can be the North Star for your customer relations!

What is customer engagement?

Customer engagement is how brands build relationships with their customers across various communication channels. Through consistent and ongoing dialogue, businesses get to know their customers and learn how to deliver the best value.

Keep in mind that this doesn’t always mean selling something. In fact, most interactions are non-transactional, for example, sharing content such as:

  • Educational materials
  • Personalized self-support resources
  • Advice or helpful reminders

The relationship begins before the point of sale and continues afterward. In order to see results, it’s important to meet customers where they prefer to talk or get their information.

These days, conversations don’t just happen on the phone. People on average use at least four different communication channels including:

Successful engagement means meeting customers in the communication channels they’re already using.

“But wait, how about customer satisfaction and customer experience?”, you may ask. Let’s clear up the distinction between customer engagement and other similar concepts.

Why is customer engagement important?

Rather than guessing what your customers want, wouldn’t you rather have customers that are eager and willing to tell you? Developing rapport with your customers can give you insights into the customer journey worth their weight in gold. Check out the benefits of engaging customers:

  • A more fulfilling customer experience
  • Develop brand loyalty
  • Improve brand reputation
  • Customers become advocates
  • Build your customer base and boost growth opportunities

How to build a successful customer engagement strategy

Like any construction project, building a great engagement strategy requires the right structure and tools. You wouldn’t try to build a house with just glue and duct tape, would you?

Illustration shows the five steps needed to build a successful customer engagement strategy

In any relationship, communication is crucial. A brand’s relationship with its customers is no different. Maximizing touch points across the channels your customers use most is a great place to begin developing deeper connections.

1. Select the right technology that will scale your communication capabilities

A customer engagement platform enables rich, interconnected engagements across multiple channels that include use cases such as:

With the right technology, you can then focus on the next step.

2. Cultivate your brand voice and identify your target channels

A consistent and personal tone of voice creates a uniform experience across channels that inspires trust and makes customers feel comfortable. 

Next, you’ll need to understand the channels that are most important to your customers. Why invest in supporting communications on a channel your customers don’t use? Some social messaging channels, for example, are quite popular in some countries but hardly used in others. If you don’t have customers in places where a particular messaging app is used, you probably don’t need to support that channel!

Once you’re interfacing with your target customers, it's time to move on to the next step!

3. Offer personalized experiences

Everything from customer support to product demonstrations should be tailored to the individual customer. A customer engagement platform will help you track each customer interaction and pass data between systems so you can offer personalized support with every conversation. 

4. Invite customer feedback and incentivize customer loyalty

If you’re not monitoring your customer experience through satisfaction surveys or feedback forms, you’re not listening enough to your customers. They'll have the most actionable insights you can use to always keep improving!

Customers also appreciate it when you give them a little something extra. Incentivize customer loyalty by offering rewards programs or giveaways for feedback participation.

With your conversational customer engagement program up and running, your next focus should be on customer data.

5. Collect data to learn from your customer engagements 

You want to make sure that your conversations are having an impact. This is where having an integrated customer communications solution can really pay dividends. Below, we’ll cover what metrics you can track to gauge your success and stay ahead of the curve in the future.

Key customer engagement metrics

A robust customer engagement platform can offer insight into the effectiveness, traffic/active users, opt outs, and click through rate of your campaigns and interactions across channels. 

Your broader business goals may vary, but these KPIs will help measure the performance of your engagement strategy.

Customer engagement leading indicators

Leading indicator metrics for customer engagement may be considered soft KPIs, but they give you a good read on the direction you’re heading.

It’s valuable information for identifying opportunities and improvements you can make to your engagement strategy as you go. 

Leading indicators include:

  • Email open and response rates
  • Text read and reply rates
  • Social media engagement
  • Repeat visits to your website or monthly active users (MAU)
  • Time spent on your website and on specific pages
  • Conversion rates
  • Call talk time with customer service

Use leading indicators as your guiding light to zero in on where and how you can provide your customers with the most value.

Customer engagement lagging indicators

Lagging indicators look backward at what’s already happened in your business and can show how you’ve progressed over time.

This is where you have the chance to show how your customer engagement strategy is impacting the business with metrics that really matter to CX success.

Lagging indicators include:

  • Customer satisfaction (CSAT)
  • Net Promoter Score (NPS)
  • Customer effort score (CES)
  • Customer churn and retention rates
  • Customer lifetime value (CLV)

If you make meaningful conversational engagement part of your brand DNA, you should ultimately see a positive correlation between your customer engagement metrics and your revenue growth.

Customer engagement examples with big results

There’s really nothing quite like seeing the results of a successful customer engagement strategy. Let’s look at examples from two well-known brands: Nissan and AAA.

Nissan gets 5X engagement with personalized mobile messaging 

Illustration shows how Nissan sent customers messages and alerts for higher engagement and more conversions

The average person goes five to seven years before purchasing a new vehicle. How can you maintain a strong customer relationship in the meantime?

Faced with this challenge, Nissan wanted to engage customers and boost brand loyalty. Their solution? A personalized mobile messaging campaign.

Nissan integrated Adobe Campaign with Sinch’s mobile messaging platform to develop rich media and SMS experiences.

By messaging the right people relevant information at the right time (and in the right channel), Nissan saw:

  • 5X higher engagement
  • 80% conversion rate 
  • 200,000 customers targeted in the first six months

Bottom line: With the right solution, Nissan strengthened their customer relations, improved conversion rates, and sold more cars!

Two-way messaging supercharges AAA’s conversion rates 

Illustration shows how AAA text-enabled their toll-free number for more engagement and conversions

When members began texting their 800-HELP line in droves, AAA’s system wasn’t set up to receive SMS which meant help messages weren’t getting through. AAA had to adapt quickly to a modern way of communicating!

AAA partnered with Sinch to text-enable their toll-free number.  With a simple upgrade along with Sinch’s always-reliable service and support, AAA was able to let members create a request for roadside assistance from their mobile phones without having to call in and wait to speak to an agent.

The results:

  • Nearly 10,000 monthly inbound text messages to the 800-HELP toll-free number
  • Roughly 800 roadside assistance requests, meaning an 8% conversion rate from inbound text to a service request
  • A soft cost savings of over $30,000 a month for AAA

Bottom line: AAA delivered a more satisfying customer experience by opening a fast lane to roadside assistance.

90% of customers would love to reply in message to ask questions

Your customers’ communication preferences and your brand’s engagement tactics will certainly change over time. . Fortunately, there are tons of great ways to keep up to date on best practices. Here are some additional resources to explore:

When done right, there’s really no better way to wow your customers than talking to them and listening to their feedback. 

If you’d like to learn more, check out IDC’s white paper featuring Sinch-sponsored research on conversational customer engagement and discover exciting new ways to transform your customer experience for today’s mobile-connected customers.

Frequently asked questions

What’s the difference between customer engagement, customer experience and customer satisfaction?

Customer engagement, customer experience, and customer satisfaction have a lot in common. Combined, they work together to provide more value for the customer. While the three concepts overlap, these are the main differences:

Customer engagement is how your customer interacts with your brand across different communication channels:

  • The customer is an active participant in the relationship
  • There's conversation between the customer and the brand
  • It occurs before, during, and after a transaction
  • It can influence whether or not your customer makes a purchasing decision or returns for repeat business
  • Examples include interacting with your business's social media posts, filling out customer satisfaction surveys, or subscribing to email notifications or customer loyalty programs.

Customer experience (CX) is your customer’s perception of all their engagements with your brand:

  • CX measures how a customer is reacting to your brand’s actions
  • It's not limited to a shopping experience
  • Examples include how the customer feels after contacting support, or memorable in-store shopping.

Customer satisfaction is a measurement of how your customers feel about their experience with your business:

  • It's influenced by customer experience and engagements, but doesn't always equate to engagement
  • It's usually measured after a sale or support interaction
  • Satisfaction can, for instance, translate into customers making repeat purchases with your business or leaving positive reviews online.

You may be thinking, “Geez, these all sound important,” and you’d be 100% correct. Great businesses can’t overlook any of these!

Talking with your customer before, during, and after a sale delivers a better customer experience and greater customer satisfaction. 

In other words, developing top-flight customer engagement can have the most substantial impact on your business. 

Infographic shows how customer engagement works and includes data that demonstrates its positive impact for businesses