Engaged customers are happy customers. And happy customers become your loyal fan base, bringing in more revenue through repeat purchases and spreading brand awareness as advocates.

So where do you start? What does a successful customer engagement strategy look like? How does customer engagement differ from customer experience?

In this article, we’ll explore all of this and more, including how your brand can use customer engagement methods to foster emotional connections with your customers to build lasting and mutually beneficial relationships that ultimately lead to an increased lifetime value for your brand.

What is customer engagement?

Customer engagement is the process of creating and managing emotional connections with customers, with the goal of nurturing long-term relationships. These connections are aimed at moving customers deeper into the sales funnel and loyalty loop.

The loyalty loop concept shows the stages a customer goes through when making a purchase decision, and whether or not they decide to become a repeat customer with a brand. With customer acquisition costs almost five times higher than retaining existing customers, the sweet spot for brands is in that loyalty loop area. If you can provide an exceptional experience for customers throughout the entire buyer’s journey, including post-purchase, you can keep that customer in the loyalty loop where they continue to advocate for your brand, enjoy its products and services, and come back to buy from you again and again.

So how does customer engagement fit into this process? Engagement begins when a potential customer simply becomes aware of a brand or product. From there, brands must continue to build and foster that relationship at every touchpoint, through the buying stage and extending into post-purchase. To do this successfully, you must understand your customers’ needs, preferences, and pain points in order to tailor the experience to not only meet those needs, but exceed them. According to a study by Salesforce, 80% of customers believe experiences provided by a company are as meaningful as their products and services. That’s an overwhelming majority that considers the brand experience to be just as important as whatever they’re buying from that brand.

Understandably so, the lines start to get a little fuzzy when trying to differentiate between all of these terms. Customer engagement vs. experience vs. satisfaction—it all starts to sound the same. And while each intersect and overlap in places, it’s important to understand the differences.

Customer engagement vs. customer experience

The customer experience (CX) is something your brand provides, but at its core it is the customer’s perception of your brand based on the interactions they have with you, from seeing an ad or visiting your social media profiles to receiving their order and any interactions they may have with your support team. It’s how customers rate the journey they’ve had with your company. You can influence CX by providing consistent, positive interactions and experiences at every stage of the customer journey.

Customer engagement, on the other hand, refers to the actual emotional connection you create between the customer and your brand. It’s how you keep in contact with customers outside of the buying journey and product-related matters to cultivate the relationship beyond transactions. By providing support and positive interactions at every touch point (not just while a customer is actively buying from you), you can achieve a higher level of loyalty and advocacy when combined with excellent CX.

Customer engagement vs. customer satisfaction

Similarly, customer engagement is distinct from customer satisfaction. While customer satisfaction is important, it does not necessarily translate to sustained engagement. A satisfied customer may continue to make purchases without actively engaging with a brand or recommending it to others. On the other hand, an engaged customer may be motivated to leave a negative review or share their experience on social media. Therefore, customer engagement is a two-way dialogue that involves actively listening to customers and working towards increasing their satisfaction with the brand.

The benefits of customer engagement

Implementing effective customer engagement strategies across various channels, such as email, SMS, omnichannel campaigns, and loyalty programs, offers several benefits for brands.

1. Improved customer retention

Positive customer experiences and the promise of more to come encourage customer engagement and, in turn, foster customer loyalty. By delivering on brand promises and consistently meeting customer expectations, brands can reduce the likelihood of customers shopping elsewhere. And getting customers to come back as repeat buyers is critical to business success—research shows that 65% of a company’s revenue comes from the repeat business of existing customers, and a mere 5% increase in customer retention correlates with a 25% increase in profit.

Disappointing experiences, on the other hand, can lead to customer churn. In fact, a study by PwC found that 55% of consumers would stop buying from a company after several bad experiences. By investing in customer engagement, brands can increase customer retention rates and reduce customer acquisition costs, which can 5 to 25 times more expensive than keeping existing customers.

2. More customer referrals

Engaging customers emotionally and consistently creating positive experiences increases the likelihood of customers recommending the brand to their friends and acquaintances. According to a study by Clarus Commerce, 48% of loyal customers told their friends about their favorite brand in the past 12 months. Word-of-mouth referrals can significantly contribute to business growth and customer acquisition without the need for additional marketing spend.

3. Better profit margins

Customer engagement provides brands with valuable customer data that can be leveraged to drive revenue. By tracking customer behavior, preferences, and purchase history, brands can create personalized experiences that increase upsell and cross-sell opportunities. The Twilio State of Customer Engagement Report found that brands that invested in digital customer engagement increased their revenue by an average of 90%. Additionally, by retaining more customers through engaging experiences, brands can offset their customer acquisition costs, ultimately boosting profitability.

Modern customer engagement: evolving touch points

As technology continues to advance, and eCommerce expanding beyond classic websites into social media, the number of touch points where customers can interact with brands is expanding. To effectively engage customers, brands need to keep up with their preferences and build relationships quickly while minimizing customer churn. Here are some key touch points and strategies for customer engagement:

1. Customer satisfaction surveys

Customer satisfaction surveys remain a valuable touchpoint for measuring and evaluating the effectiveness of experiences designed to create emotional connections with customers. Asking for feedback and actively listening to customers shows a genuine interest in their needs, and helps to build trust and brand loyalty. To encourage completion, surveys can be sent through various channels and formats, such as chatbots or website popups. Tools like Delighted offer the flexibility to send surveys across multiple channels and formats, ensuring a higher response rate and a more accurate understanding of customer satisfaction.

2. Responding to negative reviews

Negative reviews can damage a brand's reputation, but failing to respond to them can be even more detrimental. Brands should view negative reviews as opportunities for engagement and problem-solving. Responding promptly and empathetically to negative reviews can help retain dissatisfied customers and demonstrate to potential customers that the brand values feedback and takes steps to address concerns.

Positive emotional connections are the foundation of customer engagement, but it is equally important to address and salvage negative emotions that may arise from issues such as delayed shipments, damaged products, or slow customer support responses.

3. Leveraging loyalty programs

Loyalty programs are excellent channels for boosting customer engagement. By rewarding customers for engaging with the brand and offering incentives for desired behaviors, such as making referrals or creating an account, brands can foster deeper emotional connections. Tracking and analyzing loyalty program data can help identify the most engaged members and provide them with personalized content and incentives to maintain their engagement and loyalty.

4. Enhancing customer support with chatbots

Chatbots have become a popular tool for customer engagement, allowing customers to ask product questions and submit support tickets. Chatbots are quickly reshaping the entire eCommerce ecosystem, extending beyond customer service into everything from marketing and sales to supply chain management. But their most common use is still assisting with customer support needs.  

And while they can certainly help in scaling support without adding much overhead, brands should strive to humanize chatbots in order to provide a level of customer service that meets or exceeds customers' expectations. While self-service options are valuable for simple queries, it is essential to offer a direct link to a human agent for more complex issues. This ensures that barriers to engagement are minimized, and customers feel supported throughout their journey.

Improving customer engagement in 2024: strategies for success

Engagement strategies should focus on how to provide more value than competitors, and include creative efforts that will help brands differentiate themselves in the crowded eCommerce market. But to build these strategies, brands have to start with the basics.

To improve customer engagement and drive loyalty, brands must first understand the motivations and needs of their target audience in order to engage with them at the right points and in the right way. From there, they can think about ways to engage that will help them stand apart, such as improving the post-purchase experience and interacting with customers outside of the sales cycle.

1. Get to know your target audience

Understanding the motivations and preferences of your target audience is crucial for developing an effective customer engagement strategy. Utilize tools like Google Analytics and social media analytics to gather insights on your audience's demographics and behavior. Actively engage with your target audience through surveys and other direct channels to learn what drives their engagement and how to better meet their needs.

2. Closely monitor customer engagement metrics

Tracking key performance indicators (KPIs) related to customer engagement is essential for evaluating the effectiveness of your strategies. Conversion rate, for example, measures the number of customers taking a desired action at a touchpoint. Other important engagement metrics to track include customer satisfaction (CSAT), customer lifetime value (CLV), churn rate, and customer effort score (CES). By analyzing conversion rates and other metrics, brands can identify areas of friction and make adjustments to improve engagement. Regularly monitoring these metrics allows brands to optimize their strategies and drive sustained engagement.

3. Add value to the post-purchase experience

The post-purchase experience is a critical phase for customer engagement and retention. Brands should focus on meeting customers' post-purchase needs to prevent churn. Providing real-time tracking, proactive communication, and convenient support options can reassure customers and add value to their experience. Additionally, offering shipping protection and product protection plans that address unexpected issues can turn negative situations into opportunities for engagement and customer satisfaction.

Engage with customers to drive success in 2024 and beyond

A strong customer engagement strategy is the key to building long-term customer loyalty. By fostering emotional connections, addressing customer needs, and providing personalized experiences, brands can increase customer retention, drive customer referrals, and boost profit margins.

In 2024, it’s crucial for brands to adapt to evolving touch points and implement strategies that prioritize customer satisfaction and engagement. Creating a customer-centric approach can set brands apart from the competition and drive sustainable growth.

Want to see how Order Protection is helping brands add value by providing better support in the post-purchase journey? Chat with us today.