What is Customer Engagement

What Is Customer Engagement?

Customer engagement refers to all the interactions between businesses and their customers.

When we talk about interactions, we mean all kinds of interactions. Customers liking a social media post is an interaction. What about visiting a website? Definitely, yes.

Now, imagine these interactions to be vague, unfocused, or even hurting. What do you think will be the customer perspective about your brand? Certainly, nothing good, right?

At the same time, what if your social media posts talk directly about a problem customers are facing? Instant connection! If the messaging on your website offers what customers are looking for – customers are hooked.

To sum up, customer engagement helps you build a good rapport with your customers.

Now, don’t get this confused with customer experience or customer satisfaction. Both are completely different from one another.

What is the Difference Between – Customer Engagement, Satisfaction and Experience?

Let’s not leave any stones unturned here. Read on to learn more about how each concept differs from customer engagement.

Customer Experience vs Customer Engagement

Suppose a customer named John. He saw an ad for a smartphone, clicked on it to visit the website (which provided every required information), moved it to the cart, paid through the channel of his liking, and purchased the smartphone. This is customer experience.

Never throughout his journey has John experienced friction or confusion. It was a smooth sail from start to end. That’s what customer experience (CX) is and should be.

Customer engagement, however, is about how the customers reach out to the brand (you), how they react or respond, what they talk about you to others, and so on.

Customer Satisfaction vs Customer Engagement

Now think of the same customer – John. The smartphone he bought turned out to be the right one he was looking for. It offered all the necessary features and is working seamlessly as it was advertised. Altogether – he got what he wanted or expected. This is customer satisfaction.

Pro Tip💡: Use customer satisfaction survey tools to gauge the satisfaction level of your customers.

It’s plain as day there’s no relation of any between satisfaction and engagement. If you still have doubts, maybe the following comparison table will do the trick for you.

3 Major Benefits to Successful Customer Engagement

The best way to understand why customer engagement plays a crucial role in your business is to understand its benefits. Ergo, we are providing you with the three most important benefits customer engagement brings to the table. Let’s have a look at them.

Build Your Customer Loyalty

According to a Forbes report, around 86% of customers say they are likely to be loyal to a brand that provides a personalized experience. Customers are more prone to engage more with your brand if you are providing personalized interactions.

You want the customers to develop a sense of attachment to your brand. It’s this emotional connection that makes them loyal. All these are done best with customer engagement.

Increase Your Customer Retention Rate

Here’s a fact – engaged customers experience more consistent, positive interactions that fulfill their expectations and needs. This makes them more satisfied and less likely to look for alternatives (your competitors).

Satisfied customers tend to stay with the brand – meaning higher retention. A key thing to understand here is that it’s much more cost-effective to retain a customer than to acquire a new one.

More importantly, if you could increase the retention rate by 5%, you can increase the profit by 25% – 90%.

Make Your Customers Brand Advocates

Let’s be honest. There’s no more efficient marketing channel than word-of-mouth.

So, what if there’s a way to boost this channel? Yes, you guessed it right – customer engagement.

It can be a social media post (memes seem to be the trend now 🤫) or a brand-sponsored community event. If the customers find your approach relatable and engaging, they will surely share the same with their peers. It’s just the way it is.

As a result, you can see a boost in brand visibility as well as credibility. If you are able to provide a top-class experience with engagement, your business will do wonders.

How to Measure Customer Engagement?

Unlike customer satisfaction or experience, measuring customer engagement is a tricky one. There’s no sure way to go about it. However, there are some ways you can measure the overall engagement. One such way is through customer engagement scores.

What Is Customer Engagement Score & How to Calculate It?

Customer engagement score is a quantitative metric to measure how engaged your customers are.

It combines several other metrics, such as interaction frequency, transaction history, and other relevant customer behaviors. Though there is a formula you can use to calculate customer engagement scores, it varies with the type of business.

The general formula for calculating customer engagement score is something like –

Don’t worry – the following offers a general outline of how you can calculate the customer engagement score.

Step 1 – Identify Key Behaviors

The first and foremost thing to do is to determine the customer interactions that indicate engagement for your business. This can vary from business to business. You can consider website visits, app usage, social media interactions, and so on.

Step 2 – Assign Weights

No, we are not implying you to hit the gym. What we mean by weight is importance. Once you have defined the interactions, assign a weight of importance to each.

For example, a purchase is a more important interaction when compared to a website visit.

Step 3 – Gather Data

Now collect the data on these interactions for each customer. Keep in mind that these collected data should be within a defined period.

Step 4 – Calculate Individual Scores

For each interaction type, multiply the number of occurrences assigned by the weight. So, if the weight of the website is 2 and you have about 10 website visits. Then, the individual score will be 20 (2*10). We hope you got the gist.

Step 5 – Aggregate the Scores

As the name indicates, add up all the individual scores of all your interactions.

For example, your total score could be something like the following.

Total = 20 (website visits) + 30 (purchases) + 4 (other interactions) = 54

Step 6 – Normalize the Score

As the final step, it’s time to normalize the score. This makes it easy for you guys to compare across different customers.

So, if 54 is the score calculated and the highest possible score is 100, then –

Normalized Score = (54/100)*100 = 54%

This score helps you understand and compare how engaged each customer is.

Key Customer Engagement Metrics to Keep Track

There are a lot of metrics to keep track of if you want to measure customer engagement. Among them the following six are the crucial metrics to follow.

#1. Net Promoter ScoreSM (NPS®)

If you didn’t know, Net Promoter ScoreSM helps you measure overall customer loyalty and the likelihood of customers recommending you to others. The reason why this is a crucial metric is because it goes beyond measuring customer loyalty.

A high NPS score indicates that the customers are engaged and satisfied.

#2. Customer Satisfaction Score (CSAT)

This is to assess immediate customer satisfaction with a product or service.

So, why is it a crucial metric for customer engagement measurement? CSAT surveys can aid you in identifying and addressing issues. This way, even if you have any negative interactions, you can quickly resolve them.

#3. Customer Effort Score (CES)

Customer Effort Score measures the effort your customers have to exert to complete an action.

For example, the amount of effort a customer might put into finding support. A lower CES score means the customers are finding what they want with minimal effort. This is good means, subsequently it also implies there is good engagement as well.

#4. Churn Rate

It’s the percentage of customers who have stopped using your product or service. It’s a crucial metric as it impacts the ROI of your business. A high churn rate means the customers are experiencing issues that need resolution.

#5. Customer Lifetime Value (CLV)

CLV is the total revenue you can expect from a single customer throughout their time with your business. It helps you focus on long-term goals for improving customer value. By doing so, you can strategize accordingly to enhance the overall customer experience.

If you are interested, follow the link to learn more customer engagement metrics and how to measure them. 

5 Top Customer Engagement Strategies

There are a few ways you can go about increasing customer engagement. The following are five among them that businesses have found to be helpful. Keep this in mind as we discuss the approaches.

PS: If you are looking for ways to increase customer engagement, the following strategies can be helpful.

Strategy 1 – Personalization

People connect with brands when they notice their interests (or issues) are being discussed. Therefore, tailoring interactions to each customer segment can be one way to increase engagement. Now, personalization doesn’t mean adding the customer’s name in communication. You need to go beyond that.

Try personalizing the recommendations based on their past purchases or tailor the messaging to resonate with customer needs.

Strategy 2 – Omnichannel Engagement

Don’t constrain yourself to one or two channels. Find where your target audiences are active, and be present on all those channels. This can be anything from email and social media to live chat. The key here is consistency and coherence across all these channels.

Strategy 3 – Implement Loyalty Programs

This is one of the best ways to increase your customer engagement. Try offering rewards for repeat purchases or other specific actions. Loyalty programs often use a point system or special benefits to make customers feel valued.

Strategy 4 – Active Listening & Feedback

Customer feedback is a gold mine. With honest feedback from your side, you identify here exactly how your business excels and underperforms. Be responsive to negative feedback to show that you value their input and are willing to make the changes.

Pro tip 💡: Use survey tools like SurveySparrow to make the most out of customer feedback. It can analyze the feedback and help you understand customer sentiment, sentiment score, the most discussed topics, and more.

Strategy 5 – Customer Support

Provide multiple support channels and make yourself easily available to your customers. Sometimes, you just have to be there for them. This could reduce customer effort and potentially increase satisfaction as well.

Apart from using email and phone support, also try live chat and social media interactions.

A Case Study of Customer Engagement Success: wydr

wydr is an open art trading platform based in Zürich where people can buy original paintings. They used to do post-event surveys through paper forms and were finding it difficult to gauge anything properly. Even though they had a large participation during the event, the response rate they got was meager at best.

So, when the time came for the next event, they started exploring the available survey software. And they found the right one – SurveySparrow. Their requirements were pretty simple and straightforward.

• The survey tools have to be intuitive and easy to use
• Should support post-event surveys
• Must have provision to automate feedback collection

SurveySparrow enabled all the above and went beyond to provide a heightened survey response rate and better customer engagement. At the end of the post-event survey, wydr found a 65% increase in the response rate and was able to collect invaluable customer insights.

These insights helped them to improve their events as well as their online platforms, which resulted in –

• 20% increase in website visitors
• 20% increase in customer engagement across channels

Follow the link to learn in detail how SurveySparrow helped wydr with better customer engagement.

Build Customer Engagement Strategies with SurveySparrow

Throughout the content, we have hinted at the use of survey software for managing customer engagement. With a conversation and chat-like interface, SurveySparrow is one of the best online survey tools.

By offering such an interface, they make the surveys more interactive, leading to a higher response rate. To be precise, it has a 40% higher response rate than its competitors.

Interact with Customers Where They Are

SurveySparrow offers a wide range of survey-sharing options to help you connect with customers where they are active. Some unique sharing options of the tool are WhatsApp, SMS, and QR codes.

Customer Feedback Collection and Analysis

Any survey tool can collect feedback, but SurveySparrow can collect honest feedback and analyze them. It uses AI to analyze the feedback and can provide you with the following (but not limited) –

• Sentiment score
• Customer sentiment behind every feedback
• Historical data analysis
• The most discussed topics
• The most repeated keywords
• Hidden patterns among feedback

Measure Customer Satisfaction

You can keep track of all KPIs like NPS, CSAT, and CES. By keeping track of how satisfied your customers are, you can maintain good (or great) customer engagement. Use the recurring survey feature of SurveySparrow to automate surveys at each touchpoint or conduct surveys at regular intervals.

Consistent feedback collection and analysis can uncover patterns or trends among customer preferences. Thus, it helps you take proactive measures to improve customer engagement.

Close the Feedback Loop Faster

Negative feedback is something that is inevitable. So, the best thing to do is to find what went wrong and resolve it at the earliest. SurveySparrow is helpful here. You can implement trigger notifications whenever a customer leaves feedback (especially negative ones).

As a result, your customer success teams can instantly look into it and respond to them. The ticket management system further helps prioritize these customer issues and help with the resolution, at the earliest possible time.

Manage Your Online Reputation

You are familiar with review platforms like G2, Capterra, and all. If so, then you should know how important it is to engage with customer reviews on the platforms. SurveySparrow can help you here.

You can directly manage all customer reviews across platforms, respond to them, and even connect with satisfied customers to leave reviews. And the best part, you can do this all from one platform, making it one of the top online reputation management tools.

There is a lot more to SurveySparrow than the ones discussed above. Get a free demo from their team to learn more about the tool. OR sign up for free and try it yourself. It’s ridiculously intuitive.