Sales Best Practices

What is Customer Engagement? Definition, Benefits, and Strategies for Success

Cari Murray's Avatar

Cari Murray

Senior Manager of Content Marketing

The concept of customer engagement has evolved in recent years, as more companies seek innovative ways to attract and retain loyal customers. In the past, simply providing a quality product or service was enough.

But new data and analytical tools show that engagement is a top influencing factor in a customer's purchasing decision. Now everywhere you look, customer engagement is the topic of discussion. Even with the surge in popularity, consumer engagement remains an abstract idea for most.

Here, we’ll explore what customer engagement really means, its benefits, and strategies to help you form a better relationship for success.

What is Customer Engagement?

Customer engagement is the ongoing cultivation of a relationship between the company and consumer that goes far beyond the transaction. It's an intentional, consistent approach by a company that provides value at every customer interaction, thus increasing loyalty.

Customer engagement is sometimes confused with customer satisfaction and experience, and there is some overlap, but each is distinct. We'll discuss these concepts in much greater detail later, but for now, you need to understand that customer experience is the perception that consumers form based on everything they see, hear, or learn about your company.

On the other hand, customer satisfaction is how much consumers like or dislike your product, service, or experience. Both are essential when interacting with consumers, but customer engagement also involves listening to build a rapport and provide a tailored solution. Effective listening is a powerful skill that affects the entire customer experience. The better a rep can listen, the more they can tailor a solution based on the customer’s distinct job role, problems, and intended results.

As a result, brands that better engage customers are also more profitable. A study by Gallop discovered that when companies successfully engaged customers, they reported 63% lower customer attrition, 55% higher wallet share, and overall performed 23% better than their competitors.

The Benefits of Customer Engagement

Increased sales are every company's big picture goal. But there are many other benefits to customer engagement that will position your brand for long-term success and improve your return on investment. Applying proven tools and best practices, your company can strategize and implement a customer engagement plan that:

Improves Customer Relationships

Relationships have been the backbone of traditional storefront businesses forever, but are challenging to maintain in the digital age. Technology makes it easier to discover and market your business to new leads, but it's become harder to maintain customer relationships.

Regular communication with customers across platforms helps build rapport. Customer engagement doesn't start and end with the purchase, and consumers often have questions throughout the process. Effective engagement strategies allow you to connect with and consider consumers' needs from initial awareness to the purchase and beyond.

Boosts Loyalty and Customer Retention

An effective engagement strategy will ensure that you always know how your customers feel about your product or service, the qualities that they value, and any areas of improvement needed to provide a better experience. What upgrades would enhance usability? Does your customer service team need a training refresh? What relevant data or trends will help them in their industry?

You want your customers to feel heard and appreciated, which in turn helps protect against customer churn. When you show genuine interest in your customers, they'll be more likely to buy from you again. Instead of being a company that merely offers a product, you become the holistic answer or solution to their problem.

Uncover Up-Sell Opportunities

With a loyal customer base, you can easily promote and sell products with additional features. In general, it's simpler to sell to a current customer versus a new lead. In fact, the likelihood of selling to a new prospect is just 5-20%, but the probability of selling to an existing customer is 60-70%.

Upselling saves time, costs, and can help you to more quickly earn a profit. Using consumer trends and data, you can quickly assess product performance and identify up-sell opportunities, such as recommending products that are frequently brought together or purchased by similar buyers at a later date.

Streamline Purchase Cycles

Customer engagement helps you organize your activities to convert and retain leads. Modern engagement platforms use AI-driven technology and data to automate interactions and repetitive tasks and create a personalized experience that encourages a prospect to make a purchase.

You can assign roles quickly, anticipate needs, and create custom, timely responses that address common questions and concerns. With detailed insights into your account and sales activity, you can easily retarget potential customers and shorten the buying process. Furthermore, streamlined purchasing gives your team time to focus on innovation, growth, and other higher-level tasks.

Increases Users

Consistent engagement helps win over customers or, at the very least, pique their interest in your business and offerings. When it comes to retaining customers, many brands go out of their way to give incentives and freebies to show appreciation. Discounts and promotions are fast ways to attract potential leads, but you want to ensure you’re also providing value.

Companies that give customers relevant content that answers key questions see a significant increase in users. As those users grow more familiar with your brand, it will eventually become the go-to choice and the product they seek out over competitors. Some companies find that the more they get in front of customers, the better. However, less is more for some audiences, so use a data-driven approach to determine your frequency and channel mix that best appeal to your target markets’ needs and interests.

Customer Engagement vs. Customer Experience (CX) vs. Customer Satisfaction

There's much confusion around customer engagement, experience, and satisfaction. While interconnected, they aren't synonyms, and each plays a unique role in your broader sales strategy.

Customer experience is an immersive brand process that may include marketing campaigns or cultivating a distinct in-store culture. The goal is to see your business from your customer's perspective and create an ideal situation that moves them to make a purchase.

Customer engagement is how the consumer sees and interacts with the experience across platforms. Do they comment on social posts? Have you seen an uptick in email subscriptions?

Customer satisfaction measures how much your consumer likes their experience, and engagement and is usually the last determining factor on whether a customer will return or walk away from the interaction feeling unfulfilled.

ZfyqD5NMlmNNK1vGbtXucw_H35XFtkJXXlNTv2YnjVPx8ShldFVEU4VKpNdE4EOqq6naSuuS7ngcC5MhPKMcVFXqL5T_f-wjQ3AwB5NDXQwF7IvZVoG5urpRb5a-0upURo5h97qI

Strategies for Boosting Customer Engagement

Now that you know what customer engagement is, it’s time to dive into the elements of an effective strategy. Customer engagement strategies vary across industry, company size, and goals, but successful plans always include the following best practices:

Identify Your Ideal Customers

The first step in the customer engagement process is to pinpoint your target audience. You need to know your customers’ preferred engagement styles and understand what they value in both a buying process and their personal life. Use this data and additional research to identify each customer's needs, age, income, and more to determine what motivates your customer. This insight will help you create a buyer persona that accurately directs your strategy.

Create Awesome Content

Once you understand who your customer is and their goals, you can tailor your content to their interests and needs. Your customer has options, and a key way for you to stand out above the rest is by ensuring your content strategy is customer-driven. They want to feel as if you are speaking directly to them.

Craft content with your customer in mind, providing solutions to their pain points and everyday challenges. Remember to track your data to identify high-performance content and pieces that missed the mark, which will help you better understand ideal cadence and resource types. When distributing content, prioritize channels where your customers are already engaged, and always utilize an aligned sales and marketing engine.

Develop a Customer-Centric Approach

The key to a customer-centric approach is to listen. What feedback are customers providing about their experience? Put yourself in their shoes to help you identify potential challenges and benefits from their perspective. Create a company culture where the customer is the hero at every stage of the buying process. But also ensure that you're providing a memorable experience before and after the transaction. Not only is this a sure way to convert leads to customers, but it also builds brand loyalty.

One example may be an ongoing customer event that helps educate your existing consumers on the latest product innovations and how they can make the most of the tools they already use. This demonstrates an active willingness on your part to remain engaged and connected far after a purchase has been made.

Utilize the Right Tools

In the beginning, you may manage customer engagement using disparate tools or software, but as you grow, customers can fall through the cracks. With the right automation and communication tools, you can streamline your engagement process and track progress in one platform. With a robust tool, you can centralize all activities throughout the customer lifecycle and create a seamless customer experience across all channels.

Gather Customer Feedback

Customer engagement has many benefits, but it is also a significant investment, so you must assess your strategy to determine the need for improvement. Set key performance indicators (KPIs) and milestones to help determine how customers are responding to your brand. In addition to quantitative data, gather qualitative feedback from social comments, forums, feedback, and focus groups. The more knowledgeable you are about your customer wants, the more satisfied they will be and want to engage more with your brand.

Tweak Your Strategy

Don't be afraid to pivot. Sometimes, it can be hard to let go of how you've been doing things, but if customer feedback indicates that something isn't working, it has to go. Otherwise, it can be a turn-off and hurt your business’s reputation. Your strategy must evolve with new changes and challenges. Even if your plan is working, it may be time for a refresh. Take risks, try new techniques, and take advantage of emerging trends.

Optimize Your Customer Engagement Process for Results

Customer engagement may seem like a trendy buzzword, but this approach is here to stay. Building a relationship with consumers that continues after the sale helps customers feel connected to your company. In turn, engaged customers spend more money, refer your products to others, and become lifelong customers.

Customer engagement platforms are invaluable tools for creating a satisfying experience that centers around your customer. With feedback and data, you can create an approach to customer engagement that's flexible, responsive, converts leads, and retains customers. You'll also gain new insights, allowing you to upsell and streamline your purchasing cycle. Learn more about how Outreach helps you scale sales activities and better engage customers, or request a demo today.