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Customer engagement 101: The complete guide

Last updated

21 February 2023

Reviewed by

Hugh Good

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Customers have more choice than ever about where to spend their money. They’re better informed than previous generations, giving them more power when making buying decisions. 

That means that your business may fail even with great products at competitive prices. 

Today's companies have to develop meaningful customer relationships if they want to earn and keep their business, and that relationship starts with customer engagement. 

Customer engagement is essential to business success in today's marketplace. A high level of engagement builds a relationship between the customer and the brand, creating loyalty and increasing customer satisfaction throughout their journey. Ultimately, engagement drives sales and creates a healthier bottom line. 

Creating authentic engagement is a complex process, and measuring your efforts can be even more complicated. This post will explore customer engagement, how to strategically foster it, and ways to measure your success.

What is customer engagement?

Customer engagement is the process of building a relationship with your customers. It happens through meaningful interactions with the customer throughout the sales funnel. 

It can include any exchange, including responding to customers on social media or creating relevant content on your company blog. It can even involve offering promotions. Anything that produces a meaningful interaction with a customer is part of the engagement process. 

These interactions build the customer's connection to your brand, making them more likely to purchase and become repeat customers. Loyal customers are also more likely to recommend your company to others, bringing in more new customers through word-of-mouth recommendations. 

Fostering long-term customer loyalty is crucial to a business's success, as it can increase sales with little capital investment. So a lot hinges on the success of your customer engagement efforts. 

Is customer engagement different from customer satisfaction or customer experience?

Customer engagement and satisfaction are parts of the holistic customer experience:

  • Customer engagement is the process of fostering meaningful interactions with customers to build brand loyalty.

  • Customer satisfaction is how customers feel about a purchase or a service compared to their original expectations.

  • Customer experience is the comprehensive journey that a customer has with a company, including the engagement they receive and their overall satisfaction with their purchases. 

All three of these areas are extremely important to a business's success. But none can happen without engagement, which starts the customer's journey in the sales funnel. 

What are the benefits of customer engagement?

Customer engagement should be at the forefront of your company's marketing and sales strategies, as it makes a big difference in your brand’s success. It's a customer-centric approach that can powerfully drive sales. Some of the benefits of good customer engagement include: 

Customers are more likely to remain brand-loyal

One of the most significant benefits of customer engagement is repeat purchases. Customers loyal to your brand are far more likely to buy from you again in the future. 

With proper customer engagement, you can build a core base of loyal customers who will spend more money with you over time. 

Customer retention can significantly increase your sales while lowering your operations costs. On average, it costs five times as much to bring in a new customer as it does to retain an existing one. 

Higher rates of customer satisfaction

Engaging with customers meaningfully often involves giving them valuable information they need to make a purchase. Responding to their need for information can make them feel listened to and understood, making them feel cared for by your company. 

Feeling like your company cares can make customers more satisfied with their experience, boosting their happiness with the buying process and increasing brand loyalty. 

Deeper relationships with the customer

When you engage with your customers, they engage with you, so you'll get a lot of valuable insights while providing them with the information they need. 

Interactions can help you understand your customer's needs, preferences, pain points, and challenges. Knowing that, you can better understand what drives their purchases or prevents you from making a sale.

You can use that information to create more appealing products and services or build more impactful marketing campaigns. 

What does customer engagement look like?

Customer engagement will look different for every business, depending on its target client, industry, and marketing efforts. Engagement can happen anywhere, including online and in-person, and should occur before, during, and after the sale. 

Examples of customer engagement include: 

Social media content

When customers like, share, or comment on your content, that's engagement. The more they interact with that content, the more you engage them. 

Calls with customer support

Customers' experience with customer service and support teams can dramatically influence their opinion of your brand. Ensuring these interactions are as positive and helpful as possible is a great way to engage and retain your customers. 

Milestone emails

Personalized emails are excellent ways to engage, making the customer feel important. It also lets them know you care about their business. 

Customer loyalty programs

Loyalty programs allow you to engage with the customer by giving them added benefits for loyalty. You can personalize discounts and benefits according to their purchase history, creating more impact and encouraging more purchases. 

In-person interactions

If you have a brick-and-mortar location, engagement happens every time a customer walks through the door. The engagement process includes everything from how your store looks to your team’s interactions with the customer. 

Any interaction you have with a customer is engagement. Being intentional about those interactions and making them as positive as possible is how you create a comprehensive and effective customer engagement strategy. 

How to create a customer engagement strategy for your business

While customer engagement benefits are clear, businesses may need help understanding how to engage with their customer base meaningfully. You’re likely already practicing customer engagement at some level, even if you aren't doing it intentionally. 

Every interaction you have with customers is part of the engagement experience. But if you start to engage with customers in a deeper, more meaningful way, you can increase the impact and see much bigger returns on your efforts. 

So how do you do that? By making a customer engagement strategy for your business. 

A customer engagement strategy should be a significant part of your overall marketing strategy. It's a coordinated effort between teams to cultivate the customer experience, from their first interaction, through the buying process and after the sale is complete. 

The goals you have for your customer engagement strategy should inform every marketing campaign you develop and guide how your internal teams interact with your customers. 

To create a successful customer engagement strategy, start with these seven steps: 

1. Set your objectives

What are you trying to achieve by increasing your customer engagement? If you’re unsure, consider the benefits of better engagement and which would benefit your company the most. Are you trying to:

  • Build customer loyalty

  • Increase repeat purchases? 

  • Boost your customer satisfaction scores? 

Consider what measurable goals align with your business so they can inform your engagement strategy. 

2. Learn about your target demographic

Who are you trying to engage? Go beyond a simple answer such as "potential customers" or "online followers." 

Develop buyer personas detailing who your target customers are and their pain points. Establish these personas based on data, not assumptions. You may need to mine data on your social media channels or website. 

Interviewing current customers can be beneficial. Going through the process of creating buyer personas will help you understand your audience better and know how to engage with them. 

3. Determine the best ways to engage your customers

Customer engagement can happen anywhere your customers are, whether in front of your brick-and-mortar store or online. Find out where your target customers are and which channels will help you reach them most effectively. That could be a billboard, face-to-face interaction, or social media channel. 

It will likely be a combination of channels, but don't assume you need to be on all of them. That can stretch your marketing resources and budget too thin, leading to ineffective engagement. Be strategic about the channels you target. 

4. Create engaging content

Customer engagement should inform every piece of content you create for your business, including blog posts, videos, social media, and beyond. 

Create these pieces with your buyer personas in mind, developing content that informs or entertains your target demographics. Engaging content should: 

  • Capture attention

  • Evoke an emotion

  • Create connection

  • Encourage interaction

Only some pieces of content you create will hit the mark. However, the more you try, the better you'll get. Establishing your brand's voice and what works will help you refine your content strategy, so you continue to build engagement.

5. Put your social media to work

Social media is a great place to engage your customers. Instagram reels, Facebook posts, and Twitter threads are prime opportunities to talk with your customers about what matters to them. 

Make sure you have an active presence and respond to customers on these channels instead of simply posting content and walking away. Consistency with your presence and voice will create connections and build an audience for your brand. 

6. Measure your engagement

Tools can help you track key metrics to check if your customer engagement strategy is working. Using the data from these tools can help you pinpoint new opportunities and discover where your strategy needs extra work. 

7. Analyze, refine, and optimize your engagement strategy

Customer engagement is an ongoing process. You'll need to continuously measure your results and determine what engagement strategies are giving you the best results and which need improvement. Feel free to try something new if it aligns with your customer personas, engagement goals, and company values. 

How to measure customer engagement

One of the most critical parts of a customer engagement strategy is measuring the success of your efforts. You need to know what's working and how best to allocate your resources and budget. 

Analyzing your results will help you build the most effective engagement strategy possible. So how do you measure customer engagement? There are several options, and one, some, or all of these methods give you the information you need to refine your strategy. 

Tracking customer feedback

One of the best ways to learn what's working is to hear directly from your customers. Get the customer's opinion on: 

  • Their experience with your brand

  • What encouraged them to purchase

  • How they heard about your company

  • How satisfied they are with your product and service

You can gather this feedback through surveys, polls, and one-on-one interviews. Digging into the individual experience can uncover patterns and new opportunities. 

Tracking key metrics

Customer feedback is excellent, but you'll want to back up this anecdotal evidence with hard data. You can accomplish this by looking at key metrics throughout your website and social media channels. 

Some of the key metrics you'll want to analyze are: 

  • Shares: How many times people share a piece of content from your social media channels

  • Likes: How many people like a piece of content on your social media

  • Comments: The number of times followers comment on blogs, photos, or videos

  • Click-through rate (CTR): How many customers click a link to your website from content

  • Time on page: How long a customer spends on a page on your website or viewing content

  • Bounce rate: How many customers leave your website quickly or after viewing one page 

  • Conversion rates: How many people act after viewing content, such as making a purchase

  • Subscriber numbers: How many customers sign up for your newsletter or loyalty program

  • Customer satisfaction scores: Surveys and polls determine how satisfied the customer is 

  • Sales numbers: Including overall sales and average transaction amounts

Your marketing teams are probably already tracking this data, but it's a good idea to look at it through the lens of customer engagement. See how the numbers change as you implement new strategies to determine what's most engaging for your customers. 

Tracking customer retention

Customer engagement is all about retaining customers already in your sales funnel, as opposed to other marketing efforts that may focus on bringing new customers into the funnel. Measuring retention is an excellent way of evaluating your engagement efforts. 

Look at key metrics such as: 

  • Customer churn rates: How many customers you lost in a given period 

  • Repeat purchase rates: How many customers made repeat purchases in a given period

  • Net promoter scores (NPS): How likely customers are to promote your business to others

  • Repeat website visitors: How many customers return to your website 

You should also talk to customer-facing team members for feedback on customer retention.

Ask them how many of their customers are new or repeat buyers and what they'd suggest to retain existing customers. Their feedback can provide valuable insight into what your customers want and how you can deliver it. 

How is your business focusing on customer engagement?

Customer engagement builds relationships with customers through meaningful interactions. It ranges from responding to customers on social media to writing helpful, relevant content on a company blog. 

It's how companies can set themselves apart in a crowded market where buyers have more information and choice than ever before. Actively fostering customer engagement can lead to higher customer retention rates and increased sales. 

If your company still needs a customer engagement strategy, now is the time to make one. You can put your teams to work, ensuring your customers are engaged, happy, and loyal to your brand. 

Take time to create in-depth buyer personas so you can actively target key clients with engagement efforts, then measure your results and refine your strategies over time.

Customer engagement is vital to building a core base of loyal consumers eager to buy and ready to recommend you to others.

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