Customer Engagement: Benefits, Strategy & Examples

What is customer engagement?  

Customer engagement is a two-way interaction between a brand and its customers on a communication channel. Providing value to your customers through active interactions is the core of customer engagement. 

Brands and customers consistently engage through social media, community forums, websites and emails before, during and after purchasing for varied reasons, including product/brand research, troubleshooting and loyalty programs. With consistent and meaningful consumer engagement, brands can build everlasting brand loyalty and increase customer lifetime value (CLV). 

Why is customer engagement important? 

Keeping customers engaged throughout their purchase journey (and beyond) with relevant and efficient customer service helps brands improve business metrics such as revenue, customer satisfaction (CSAT) and customer retention.  

When you understand customer engagement, you know the contemporary perception of your business and whether a customer is a detractor or promoter of the brand.  If you find out a customer is a detractor, you can figure out why and address the reasons to retain them. A highly engaged customer is inclined to buy more, promote more and stay loyal to the brand. Due to this very reason, customer engagement matters. 

Customer engagement vs. customer experience 

Customer experience encompasses the overall customer journey, keeping into account multiple customer touchpoints, from when a customer sees an ad to the final purchase. Customer engagement is having an active dialog with the customer and exploring how they engage with the brand. Below are seven key differences between customer engagement and customer experience. 

Customer engagement vs. customer relationship  

Customer engagement and customer relationship sound very similar, and you might think they mean the same as well. However, they are vastly different in scope and meaning. 

Customer engagement involves dynamic and ongoing interactions across various touchpoints, such as social media, websites and product usage, with the primary goal of capturing attention and fostering positive experiences to build brand loyalty. Metrics for engagement include click-through rates, social media interactions, website visits and product usage frequency.  

On the other hand, customer relationship is a broader, long-term concept encompassing the overall connection between a customer and a brand throughout the customer lifecycle. Here, the focus is building trust, understanding customer needs and maintaining a positive rapport. Metrics for relationship management include customer satisfaction scores, retention rates, and Net Promoter Scores (NPS). 

Balancing effective engagement with a focus on cultivating enduring relationships is essential for a comprehensive customer-centric approach. 

Benefits of customer engagement 

Customer engagement can benefit your brand in the following ways: 

#1. Optimize purchase cycles 

When a brand actively engages with its customers, it can streamline and enhance the entire purchase journey. By understanding customer preferences, providing relevant content and maintaining consistent communication, businesses can more efficiently guide customers through the decision-making process.  

#2. Gather valuable customer feedback 

Customer engagement helps your brand uncover customers’ true feelings about your products and services. It helps identify your most valuable products and pinpoint areas that need to be improved to offer a consistent omnichannel customer experience across touchpoints.  

Deep engagement allows you to stay attuned to evolving customer expectations, enabling your business to adapt and innovate based on customer feedback and changing market dynamics. 

#3. Improve customer retention 

Engaged customers build long-term relationships with brands because they feel heard and appreciated. By engaging respectfully with your customers, resolving their concerns and improving your product based on their feedback, you give them reasons to stay — brands retain 89% of customers when they deliver consistent service across all channels. 

Learn more: A Tell-All Guide to Customer Retention 

#4. Create better upsell opportunities 

Consistent and omnichannel customer engagement creates a loyal customer base over time. These customers not only become your brand advocates and fuel your word-of-mouth marketing, but it is also easier for you to sell your other products to them. Upselling to loyal customers improves sales velocity, saves time and reduces the costs of converting a new lead. 

#5. Amplify brand awareness 

Consistent engagement helps win over customers and prospects or, at the very least, pique their interest in your business and offerings. 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 their go-to choice over competitors.   

10 customer engagement metrics to track for businesses  

Determining true customer engagement isn't easy, though businesses use various metrics to determine the ROI of their customer engagement tactics. Below are 10 customer engagement metrics: - 

• Clickthrough rate (CTR) 

CTR measures the percentage of users who click on a link, providing insights into the effectiveness of your content and calls to action.

• Conversion rate 

This metric reflects the percentage of visitors who take the desired action, such as making a purchase or filling out a form, showcasing the efficacy of your conversion funnel. 

• Bounce rate 

Bounce rate indicates the proportion of visitors who navigate away from the site after viewing only one page, offering insights into website engagement and content relevance.

• Time on-Page or Session duration 

This metric measures the average time visitors spend on your website. It is calculated by aggregating the time spent by all visitors and dividing it by the total number of visitors, giving an indication of content quality and user engagement. 

• Social media engagement 

Assessing likes, shares, comments, and other interactions on social platforms provides a comprehensive view of your brand's online presence. Check out this insightful resource on Social Media Customer Engagement Strategies for more detailed strategies. 

• Customer satisfaction (CSAT) 

CSAT measures the overall satisfaction of customers with a product or service, usually through surveys or feedback forms.

• Customer Retention Rate (CRR) 

CRR evaluates the percentage of customers a business retains over a specific period, showcasing the effectiveness of customer engagement in fostering loyalty. 

Read More: Average Customer Retention Rate by Industry in 2024

• Net Promoter Score (NPS) 

NPS assesses the likelihood of customers recommending a brand to others, providing insights into overall customer loyalty and advocacy.

• Email open rate 

Email open rate measures the percentage of recipients who open an email, offering insights into the effectiveness of your email marketing campaigns.

• Customer lifetime value (CLV) 

CLV represents the total revenue a business can expect from a customer throughout their entire relationship, guiding long-term engagement strategies.

Eight proven strategies for engaging customers  

Customer engagement strategies vary across industries, company size and goals, but successful plans always include the following best practices: 

#1. Understand your ideal customers 

Understand your customers' preferred engagement styles and grasp what holds value for them in both their purchasing journey and personal lives. Utilize collected data and additional research to pinpoint individual customer needs. 

AI-Powered Insights: The Shortest Path to Your Customers’ Hearts and Minds  

AI-powered insights redefine customer profiling, offering unparalleled accuracy and strategic advantage. How though? You can swiftly analyze vast datasets and use them to provide precise predictions and uncover nuanced patterns instead of going through the slow process of manually culling data.  

It helps you make data-driven decisions, enhancing customer engagement. Another aspect is that you can leverage Generative AI to produce content faster, summarizing blogs and long-form content. Apart from that, you can craft listening queries and diverse keywords to capture dynamic conversations. 

Check out Sprinklr AI+ to leverage these capabilities and enhance customer engagement.

#2. Create personalized content 

Once you generate relevant customer insights using AI, ensure your content strategy is customer-driven. Craft content solutions for your customer pain points, track data for insights, and prioritize distribution channels aligned with your engaged customers. Incorporate interactive content like quizzes and surveys to capture attention and gain valuable preference insights.  

#3. Develop a customer-centric approach 

Once you have created personalized content as per buyer preferences, place them across the buyer’s journey using a customer-centric approach. Use attentive listening to empathize with customers and get a grasp of their experiences, challenges and benefits.  

Establish a company culture where customers are heroes throughout the buying process, ensuring a memorable experience pre- and post-transaction to foster brand loyalty. Surprise customers with unexpected perks and exclusive offers, creating positive associations.  

Need inspiration? Take lessons in customer centricity from Grab and other market leaders.  

#4. Give customers a unified experience 

A customer-centric approach cannot be deployed using multiple tools as it leads to churn and a broken customer experience. Find a platform that helps you give an omnichannel experience. With the right platform and product suite, you can streamline your engagement process for better results. 

Unifying a customer experience resolves a lot of issues. It saves money on escalation costs, increases first contact resolution rate and increases CSAT scores.  

#5. Leverage customer feedback 

Customer engagement investment is an integral part of your CX strategy. Once you get ready to execute a customer-centric strategy, establish clear customer experience (CX) metrics. Beyond quantitative data, gather qualitative feedback from social comments, forums, focus groups and customer surveys. 

When you deepen your understanding of customer wants, you increase customer satisfaction, encouraging further engagement with your brand. 

#6. Have a loyalty program 

Loyalty programs are exceptional customer engagement tactics. Through tiered points systems or other incentives, these programs create a tangible connection between customer spending and rewards, fostering a sense of exclusivity.  

Additionally, loyalty programs offer a unique opportunity to understand the audience better, gathering valuable data on preferences and behaviors. They also serve as valuable testing grounds for new initiatives.  

Offering exclusive perks to members enables businesses to gather feedback from a dedicated audience, refining strategies for more targeted and successful engagement. 

#8. Keep your brand voice consistent with Generative AI 

Customers are more likely to engage with a brand they feel has a consistent identity they can recognize, no matter where they encounter their products or services. Choose consistency in your messaging across multiple channels. 

That’s where Generative AI-enriched customer engagement software can come in handy. Using Natural Language Processing (NLP) algorithms, these tools can analyze vast datasets of customer interactions, social media mentions and feedback. Thereafter, they assist agents with tailored responses that also sound human, personalized and consistent.

Examples of effective customer engagement implementation in businesses

Warby Parker, an eyeglass brand, revolutionized the traditional brick-and-mortar business with a creative online approach. Using augmented reality (AR), customers can virtually try on eyeglasses at home, receiving well-crafted and light-hearted automated emails guiding them through the testing process.  

This unique online-to-offline engagement, including prompt purchase suggestions, gives Warby Parker a distinctive customer retention advantage, showcasing the power of strategic and personalized engagement strategies. 

Amazon excels at customer engagement. It is demonstrated through their Virtual Summits.  Transitioning to virtual spaces in 2020, Amazon conducted hybrid events to offer informative sessions for AWS users to optimize Amazon's services. The events feature limited-time deals, product launches, personalized presentations, influencer collaborations, contests and gamification, maximizing engagement. Amazon's adept use of social media during these events further enhances its omnichannel approach, showcasing a comprehensive strategy that leverages personalization and diverse engagement tactics.

If you want to boost customer engagement, just like Warby Parker and Amazon did, deploying a personalized online approach, Sprinklr’s AI-powered customer engagement platform can come in handy as you get to: 

• Choose the channels your customers use the most  

• Automate conversations by building once and deploying forever 

• Faster agent response time by detecting customer intent via AI 

Take a free trial of Sprinklr Service today and experience it yourself.