A killer brand strategy with appealing optics and top-grade products is only half the battle of running a successful business. The other half is having an impactful customer engagement strategy. After all, it’s your customers who are the lifeblood of your business. Without them, your business is doomed to fail. So, creating and enhancing an equally vibrant customer engagement strategy is crucial. 

But what does customer engagement mean, and how do you build, retain, and grow your customers’ emotional investment in your brand? 

Developing your customer engagement strategy requires you to see your products and services through the lens of your customers rather than as a business owner. This often means detaching emotionally from what you’re selling, a challenge many business owners face. 

This article will help you understand what successful customer engagement looks like, how to create a strong customer engagement strategy, and how to improve it to attract newcomers and keep your existing customers coming back for more. 

Customer Engagement: An Explainer 

Customer engagement has a broad range of meanings. Indeed, it means different things to different business owners. How a software engineering company engages with its customers differs from how a fruit and veg supplier interacts with its customers. But scratching beneath the surface uncovers plenty of common ground for us to find a solid definition of customer engagement. 

Customer engagement describes the relationship and interactions between a brand and its customers. It encompasses how you engage with your customers and measuring the emotional draw your customers feel to your brand. 

In summary, customer engagement relies on two essential factors. First, it can be measured using different metrics, and second, how you enhance your customer engagement strategy depends on what these metrics tell you. 

All business owners and leaders involved in the customer experience must understand these two factors to implement and develop a winning customer engagement strategy. 

Defining what customer engagement means is the first step in creating a successful customer engagement strategy, but why does it matter? 

Engaged customers feel an emotional bond with your brand. They are invested in your company’s journey and feel loyalty towards your brand over your competitors. As a result, you’ll enjoy high customer retention rates.  

It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.

– Warren Buffett, CEO of Berkshire Hathaway 

The greatest benefit of an engaged customer base is that they will actively advocate your brand to their friends and family and across social media channels on the internet. Word-of-mouth recommendations are among the best forms of marketing your business can enjoy, so engaging with your customers is a surefire way to build sales growth. 

In addition, it’s cheaper for businesses to retain existing customers than attracting new ones. Current customers spend 67% more on average than newcomers and cost five to 10 times less than acquiring new customers. This illustrates the importance of building an emotional rapport with your existing customers. 

Latest Customer Engagement Trends

One of the most effective ways to implement a sound customer engagement strategy is to understand the latest trends in the sector. Recent research conducted for Forbes found that over half (53%) of customers care at least as much about the customer engagement experience as a company’s products or services.

Meanwhile, 46% of customers will buy more from a company offering a personalized customer experience, and 48% will pay more for excellent customer service.

But what are the latest customer engagement trends?

1.      Artificial Intelligence

With 86% of consumers approving of brands utilizing artificial intelligence (AI) for customer engagement last year, and 76% becoming frustrated when they’re not offered personalized interactions, AI is rapidly revolutionizing how brands interact with customers. From automating previously time-consuming manual processes to building personalization through new customer-facing touchpoints, such as chatbots, AI makes it easier for businesses to engage with existing customers. 

To illustrate the growing demand for AI-powered applications, it’s estimated that 30% of new apps will feature AI in 2026 compared to just 5% in 2023, while the personalization software market is expected to reach $2.7 billion by 2027, up 23% from its 2021 valuation. 

2.      Omnichannel communication

Consistent messaging across all media channels builds a coherent brand identity with which customers can emotionally resonate. Every customer interaction should align with the company’s values and speak to the customer while meeting marketing goals. 

As well as building customer engagement, consistent messaging across social media can build sales. Research from The Influencer Marketing Factory found that 43.4% of people have purchased a product through social media without leaving the app in the past year. 

3.      Data-driven personalization

Customers want to feel seen by the businesses they buy from, craving the emotional connection they feel with friends and family. Companies can access more data than ever to assess a customer’s behaviors and produce a personalized customer experience. 

Modern CRM tools offer customer insights from sales patterns to marketing responses and loyalty. With the help of machine learning, sentiment analysis, and other data analytics, businesses can target each consumer with individualized product recommendations, SMS and email alerts, and even personalized greetings while shopping online.

Creating a Customer Engagement Plan

Now you’ve got a good idea of what should be included in a customer engagement plan, it’s time to put that knowledge into action and fire up your strategy to build the plan. Creating an effective Customer Engagement Plan involves a series of thoughtful steps, each critical to fostering strong relationships and driving long-term business success.

Here’s a step-by-step guide to creating an excellent customer engagement plan.

Step 1: Understand your target customer 

To begin, understanding your target customer is essential. This involves identifying who they are, their interests, motivations, needs, and the problems they face. By deeply knowing your audience, you can tailor your engagement efforts to be more relevant and impactful.

Step 2: Set objectives 

Once you have a clear understanding of your customers, the next step is to set specific objectives. Decide on clear goals, such as improving customer retention or boosting customer satisfaction scores (CSAT). Tracking progress against these objectives is crucial, as is measuring success through key performance indicators (KPIs). Utilizing tools to capture customer sentiment can provide valuable insights into how well your strategies are working and where adjustments may be needed.

Step 3: Omnichannel communication 

Effective customer engagement also requires an omnichannel communication approach. This means interacting with customers across various channels, including social media, live chat, mobile apps, email, and SMS, to maximize your reach. Identifying and focusing on their preferred communication channels ensures that your messages are received and appreciated. Consistency in your brand voice and branding across all these platforms helps in creating a seamless and recognizable customer experience.

Step 4: Personalization

Personalization is another vital component. Leveraging insights to offer product recommendations and provide personalized content makes interactions more relevant and engaging. Tailoring online interactions to meet individual customer preferences and creating bespoke loyalty offers can significantly enhance the customer experience and build loyalty.

Step 5: Engage with feedback

Engaging with customer feedback is crucial for continuous improvement. It’s important to respond to both positive and negative feedback, showing customers that their opinions are valued. Thanking them for their input and implementing easy feedback tools, such as surveys, online reviews, and feedback widgets, can facilitate this process. Using the insights gained from feedback to drive improvements in your offerings demonstrates a commitment to meeting customer needs and expectations.

Step 6: Recognize and reward loyalty

Finally, recognizing and rewarding customer loyalty is key to sustaining long-term relationships. Showing appreciation through tailored rewards that align with each customer’s preferences can enhance their sense of value. Offering referral bonuses for bringing in new customers and utilizing reward programs like loyalty points or discounts further incentivizes continued patronage and advocacy.

Following the six steps above is a failsafe way of building an engaged and loyal customer base that remains faithful to your brand and actively advocates for your products. 

How to Enhance Customer Engagement

You’ve used the six steps above to create a robust customer engagement strategy that listens to your audience, and you’ve determined which metrics you’re measuring to understand the effectiveness of your plans. Whether that’s improving CSAT or customer retention, you can use the data you gather to create actions to continually tweak and enhance your customer engagement.

The biggest mistake your business can make at this point is to think that your customer engagement strategy is perfect. Once you’ve achieved the desired level, it takes work to retain and enhance it.

The most successful brands constantly develop catchy promotions, engaging social media campaigns, and new ways of interacting with their customers.

So, how do you boost your customer engagement? Here are some top tactics: 

Use customer feedback tools

Using customer feedback tools like Netigate has become increasingly important to businesses seeking to enhance customer engagement strategies. They allow companies to use online surveys to understand customers’ experiences, sentiments, and engagement to help them create actionable insights to improve through targeted initiatives. 

Cement your brand voice

Your brand voice helps distinguish you from your competitors. Articulating what makes you and your products stand out and unique is one of the strongest ways of creating an emotional tie with your customers. 

Think about what you stand for, what your customers think of first when they see your brand, and what they want and expect from you. Answering these questions will help you create a consistent tone of messaging that connects with your target audience. 

For instance, if you think about Nike’s brand voice you instantly think of them as being enablers to help people hit new heights and achieve the unlikely, if not impossible.

Build a referral program

Rewarding existing customers for onboarding newcomers to your brand not only helps to keep them engaged but also acts as an incentive for new customers to refer you to their friends and family. 

Referral programs build loyalty among customers by making them feel appreciated. This will help improve customer engagement metrics, such as CSAT and Net Promotor Score (NPS), and grow sales revenue. 

Look at T-Mobile, who have a great referral program that rewards you and a friend with $50 each when you refer them to the USA’s largest 5G Network. 

Common Mistakes to Avoid in your Strategy

It’s easy to fall into the trap of complacency once you’ve got your customer engagement strategy up and running. Here are some of the most common mistakes to avoid, ensuring your engagement operations remain on an upward trajectory. 

• Ignoring customer feedback
• Compromising customer privacy
• Ignoring the reach of social media
• Spamming customers by email and text
• Using a one-size-fits-all approach
• Launching new feedback technology without testing

How to Measure and Analyze Customer Engagement

Now you’ve got your engagement plan in place, know how to optimize it, and which pitfalls to enjoy. Now it’s time to measure how successful your plan is and analyze the results to turn into valuable actionable insights. 

The most effective KPIs to measure customer engagement are:

• Net Promotor Score (NPS) – will your customers wax lyrical about your products and services to their friends, family, and colleagues?

• Customer Satisfaction (CSAT) – how satisfied are your customers with your products and services. Would they give you 5-stars or 1?

• Churn rate – How many customers are leaving you in favor of the competition?

• Retention rate – What’s the percentage of customers that can’t get enough of your offerings and keep coming back for more?

Who is responsible for tracking metrics? It’s a good question that ultimately differs between organizations. Often, the marketing department is responsible for reporting on customer engagement. However, businesses that involve every customer-facing department in customer engagement frequently see the best success. 

Everyone in your business should be aware of, and involved in seeing the results of your KPIs and the progress towards meeting your objectives. This non-siloed approach builds the customer into the fabric of everything your teams do, which then results in a highly engaged and loyal customer base. 

Taking your engagement to the next level is easier than you think. Once you begin to capture data from KPIs, it’s essential to analyze the data and turn the numbers into actionable insights that inform adjustments to your customer engagement plans. 

Manual data analysis can be time-consuming, so using tools like Lumoa’s customer feedback software is ideal. These software programs automatically gather and analyze customer feedback, helping you quickly understand how your customers feel about your brand, products, and services. 

This data can then be turned into actionable insights, which can inform changes to your customer engagement strategy and help improve your customers’ emotional interactions with your business. 

Happy and engaged customers remain loyal to brands and spend more with those who care for them. Finding actionable insights from your engagement metrics data could rapidly increase your company’s profitability and revolutionize your overall business strategy. 

FAQs

What is customer engagement, and why is it important? 

Customer engagement relates to how businesses interact with their customers. Businesses use communication channels, such as social media and feedback forms, to connect with their customers, helping them build loyalty, increasing customer retention rates, and attracting new customers through existing customers advocating for their brand. 

What are the latest customer engagement trends? 

New technologies are among the latest customer engagement trends. Generative AI tools such as machine learning and natural language processing personalize customer interactions, and social media is an increasingly important source of understanding customer sentiment. 

In addition, AI tools are helping to automate analytical processes for data-driven insights to inform customer engagement strategies. 

What are the best customer engagement metrics? 

Defining the best customer engagement metrics depends on your specific business objectives. Businesses use several KPIs to track progress against these objectives and inform their engagement activities, such as Customer Satisfaction Scores (CSAT), Net Promotor Scores (NPS), customer churn rates, and customer retention rates. 

Data from these metrics help businesses understand their customer needs and adjust their engagement activities to enhance customers’ feelings about their brands. 

Conclusion 

Understanding how to engage effectively with your customers is essential to building customer loyalty, onboarding new clients, and increasing their emotional attachment to your brand. 

Businesses use several metrics to track customers’ feelings about their products and services. The data derived from these KPIs can be analyzed to inform how you engage with your customers and improve sentiment. 

Consistent messaging, acting on customer feedback, and embracing new technologies, such as Lumoa’s customer feedback and insight tools, are the best ways to enhance your customer engagement strategies. This will improve customer retention, increase average customer order values, and ultimately boost revenue.

Start building a customer-centric business with Netigate. Check out our 360-degree customer experience solutions.