Customer engagement has become a hot topic, with average daily searches doubling in the past five years. Yet, customer engagement is an ambiguous topic – there are different definitions, different strategies to enhance it, and different metrics for measuring success at improving customer engagement.
What is customer engagement?
Customer engagement can be defined in different ways, but at its core, it’s about interactions between a company and its customers.
These interactions can take many forms, depending on the type of company, type and price point of product, delivery channels, and other factors. But every business interacts with customers—almost always across multiple channels—and consequently needs to develop customer engagement processes for each touch point.
Customer engagement can be poor or excellent. Most companies will aim for excellence Obviously, companies will be aiming for successful customer engagement (though some ruin the experience in the process of trying to measure it).
It can help think of customer engagement in terms of “incidental” and “valuable.” Valuable customer engagement leads to success for your business—whether this is new sales, follow-on sales, customer retention, or any other action that contributes to your business growth.
Valuable customer engagement is what you want more of.
Why should you care about customer engagement?
Valuable customer engagement brings more profit and growth for a business. According to Hall and Partners’ research, successful customer engagement can account for two-thirds of a company’s profits.
Beyond enhancing profits, valuable customer engagement creates sustainable growth.
The more engaged a customer is with your brand, the more they will feel an emotional bond with your company. This bond encourage customers to shop with your brand again and again, and makes them less likely to evaluate competitive alternatives.
By strengthening customer retention, customer engagement contributes to long-term business stability and increased profits.
In supporting long-term business survival and growth, customer engagement provides you with the confidence to reinvest in innovation and expansion.
Why is customer engagement significant for online businesses?
Online businesses don’t have the real-world presence of physical businesses. There are many tactics to help retain customers and improve their engagement when you have a physical store, location, or office. People tend to be creatures of habit; if they have a positive experience at a restaurant or clothing store once, they are likely to return.
Things are different online. Low barriers to entry and the absence of physical space constraints make it far easier to open an online store than a brick-and-mortar one, making the space intensely competitive. It’s challenging for small online retailers to build widespread brand awareness.
Even if someone has shopped with an online company once, they are unlikely to do so again unless their experience is exceptional. There are so many other choices available.
To retain this traffic, customer engagement is vital. Online businesses must prioritize personalized, high-value customer engagement if they want to achieve longevity.
How to calculate your company’s customer engagement rate.
The first step in improving your customer engagement rate is to set the baseline. You won’t know whether your improvement tactics will aid or damage your customer engagement without doing that.
You’ll want to calculate your company’s customer engagement rate after implementing new strategies to see if they have worked and to what extent. Some approaches may be costly, so determining if they are worth it is essential.
Repeat purchase rate (RPR)
The repeat repurchase rate shows you how many customers have made more than one purchase within a given period of time.
This calculation method is key as it shows you the extent to which customers are coming back to shop again. Returning to purchase again is the most valuable type of engagement.
If your methods are working, you should see this number rise over time.
Purchase frequency (PF)
This measures how often customers purchases from you on average. It’s calculated by taking the number of orders over the past year and dividing it by the number of unique customers over the same time period.
By working out how long it takes customers to buy from your company again, you’ll be able to figure out how engaged they are. Ideally, you want the time between purchases to be short.
Rate of guest checkouts
When a customer purchases without creating an account, you can assume they haven’t been engaged with successfully enough. Why? Because those who create an account are more likely to return and purchase from you again.
As you implement more strategies to improve customer engagement, you should see the number of guest checkouts decline.
What strategies can improve customer engagement?
Understanding what customer engagement is, why it’s important, and where your company is, next comes the most vital question: how can your online business improve customer engagement? There are several options available.
Focus on first impressions
First impressions can make or break a customer experience. Make sure your online shop is user-friendly. Look into website design trends for attracting customers—whether this is in terms of color, font, or layout.
Personalize the experience
Customers want to feel important. Invite them to engage on their first visit to your website, but don’t force it. If you interact with them—whether via a chatbox, an email, or over the phone—make sure to use their name, and listen to them properly. Don’t overly rely on AI (it’s easy to spot and off-putting if poorly implemented).
Personalize their experience. Let them know you are talking to them directly, not just another customer.
Minimize delivery issues.
Whether you are selling a physical product or an intangible service, there are plenty of things that can go wrong. From faulty products to poor delivery times, any issue with products can turn customers away from your company.
Of course, these issues sometimes cannot be avoided. They are freak accidents, bad weather, even global pandemics.
But to minimize problems, ensure you are working with excellent courier and distribution companies. Test and evaluate the end-to-end customer experience, from ease of ordering to delivery time to the attractiveness and security of the packaging.
If you find yourself in a position where a delivery goes wrong, make sure to reach out to the customer in a way that feels personal. Of course, offer a refund, but add something extra. By making the customer feel they are valued, you will increase the odds of retention and repeat purchases.
Consider chat apps.
Chat apps can help customer engagement by responding immediately to common customer inquiries. When experiencing any sort of problem with your site, from finding what they are looking for or getting answers to simple questions, prospective customers may simply leave and shop elsewhere.
By having an online chat app for customers to use and get those simple answers, you’ll be able to keep them on your website. Finding the best chat app for website engagement shouldn’t be too difficult but can make a big difference.
Invest in helpful technology.
Chatbots aren’t the only option for helpful customer engagement tools and technology. There are several other types of tools that can enhance interaction with your online customers.
Customer support apps are essential for providing answers and assistance to users of your online software, store, or aspects of your website. Virtually all of these enable you to create support tickets and route questions to right group to help out the customer, whether it’s technology related, a billing issue, a problem with shipping, or some other type of inquiry.
The best tools offer integration options so you can support customers and help them resolve their issues no matter how they contact you: by email, phone, chat, online form, or through social media channels.
For complex products where customers may be able to help each other, consider tools that enable to create an online community, basically a private social network just for your customers. These include functionality for forums and discussion threads, blogging, an online knowledgebase, surveys, group collaboration, and event management.
Yet another category of tools is user relationship management. These apps connect your customers directly with your product design or selection teams, so that you can capture and act on feedback, suggestions, and new ideas in an intelligent and coordinated manner.
Seek feedback, and respond to it.
Ultimately, you can only successfully engage customers if you know what they want from their online experience. Offer the opportunity to complete surveys, or give customers a way to provide feedback to you.
Not only will customers feel that their voices are heard, but you’ll gain valuable insights into how you can improve the online experience and even improve overall as a company.
It is essential that you actually respond to and act on this feedback. If you don’t, customers will feel like you don’t care and that their voices are meaningless…and will take their business elsewhere.
A focus on customer engagement can change your online business for the better.
Interest in customer engagement has increased in recent years for good reason. By harnessing the power of valuable customer engagement, online companies can grow their profits sustainably.