What is customer engagement? Everything you need to know in 2023
In this article:
- First, what is customer engagement?
- Why is customer engagement important?
- How do you build a successful customer engagement strategy?
- Key customer engagement metrics
- Customer engagement examples with big results
- Additional resources
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 possibly learn what your customers want or need from you? By talking to them! This is what we in the biz call customer engagement — and it’s more important than ever.
Did you know that 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. Customers today expect you to do more than respond when they reach out with a problem.
We’ll show you all the communication 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!
First, 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.
Customer engagement vs. customer experience vs. customer satisfaction: What’s the difference?
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. Let’s take a deeper look at why you should prioritize it.
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.
For a demonstration, imagine you need to shop for insurance.
- You’ve seen Insurance Provider A’s commercials and advertisements online.
- Perhaps they’ve even offered you a coupon via email for “10% off for a limited time only.”
- You visit their website, search through plans, and compare their prices to a competitor.
- Maybe you have questions about their prices or their different plans. Without someone to guide you, you’re on your own.
- Your friend told you about their great experience with Insurance Provider B.
- You check out their website and a chatbot offers assistance.
- The chatbot connects you with a representative for a live consultation to find the right plan for you.
- A day after the call, you receive a text asking how your phone call went and an email with more resources on managing your finances.
- Impressed, you fill out the satisfaction survey (with a 10/10) and shout out Insurance Provider B in a Tweet.
- Provider B responds to your Tweet and reminds you to join their customer loyalty program so you can get notifications about discounts and other perks.
If your only touchpoints with a business are transactional in nature (as with Insurance Provider A), then that will be the extent of your relationship. That can work, but doesn’t it feel like something’s missing?
With Insurance Provider B, we see how active listening, conversations on multiple channels, and helpful, non-transactional engagements create a more fulfilling customer experience, not to mention better outcomes for both parties.
Authentic conversations with your customers help develop true brand loyalty and improve your brand’s reputation. Customers become partners — and partners spread the word about your business!
Over time, this builds your customer base and opens the door to new growth opportunities.
Now that we’ve had a glimpse at the benefits of customer engagement, let’s look under the hood of what goes into a successful engagement strategy.
How do you 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?
In any relationship, communication is crucial. A brand’s relationship with its customers is no different. Maximizing touchpoints across the channels your customers use most is a great place to begin developing deeper connections.
Step #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.
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!
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.
Step #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.
Step #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 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.
- 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
A car is one of the biggest purchases most people make. People don’t buy them often either –– 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 that included:
- Friendly reminders to customers about scheduling routine maintenance
- Rich SMS messages with details on how to make the most of the car’s connected services
- Alerts when a new model becomes available
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
The American Automobile Association (AAA) has been known for its reliable roadside assistance for over a century. Over the years, their customers’ needs and expectations have changed.
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.
- 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.
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.