Customer Engagement and Loyalty

Customer engagement is the means by which a company creates a relationship with its customer base to foster brand loyalty and awareness. It is the emotional connection between a customer and a brand. Highly engaged customers buy more, promote more, and demonstrate more loyalty. Providing a high-quality customer experience is an important component in your customer engagement strategy. Customer engagement can be accomplished via marketing campaigns, new content created for and posted to websites, and outreach via social media and mobile and wearable devices, among other methods.

 

Research shows that a fully-engaged customer represents 2 per cent more revenue than average. Companies which do not have a customer engagement strategy could be missing opportunities to interact with customers and build a relationship with them. There is no single customer engagement method that works for every company across all industries. However, a sincere focus on empathy, clarity, and simplicity in dealings with customers and prospects should be the basis for all of customer engagement activities. There are many positive customer engagement examples that can be used to model a customer engagement strategy. Major brands use everything from funny, responsive social media agents to personalized discounts and offerings to inspire loyalty and affection in their customers.

 

Customer engagement is often the result of positive customer experiences. It is very important to capture and analyze data from every customer touch point for understanding which interactions are increasing engagement and which are hurting it. With the insights gained through such analysis, a company can create a customer engagement model that outlines what kinds of experiences they need to deploy at each stage of the customer journey.

 

Most of the modern companies are giving emphasis on correcting their missteps and planning future customer engagement activities so as to reap the benefits of fully engaged, loyal customers.

 

Importance of customer engagement

 

Studies show that customer acquisition costs can be four to ten times higher than those for customer retention. A survey by Accenture in 2017 of 24,489 people found that the costs of losing customers due to poor service add up to an estimated $1.6 trillion in the U.S. alone.

 

Customer engagement strategies can help curb churn rates by prolonging the customer journey beyond purchasing. Engaged customers become repeat customers. A 2016 survey conducted by Twitter showed a customer who received responses to tweets from brands were willing to spend 3% to 20% more in future purchases from the company. 30% of customers who receive a response to a tweet are more likely to recommend the brand to others, according to the survey of 3,139 users.

 

Strategies for engaging customers

 

Customer engagement methods are diverse and far-ranging, but many experts suggest companies begin with "active listening" - this means scanning for feedback left on websites, sent via email, phoned or mailed in, and posted to social media channels. Prompt answers to their queries via social media are expected by the customers. A 2012 study by Gartner revealed a 15% increase in customer churn rates due to failure to respond via social media.

 

Modern companies are viewing social media as not just a broadcast platform. They take pains to improve online customer engagement with regularly posted content and contests launched through Facebook, Twitter, LinkedIn and other sites. Responsive brands that exhibit "fun" and "sassy" personalities catch customers' attention and can result in valuable retweets and likes, as fast food chain Wendy's experienced when a customer launched a campaign in 2017 to earn free nuggets for a year and set a world record for the most retweeted tweet.

 

Customers can also be engaged via messages sent to smart phones or wearable devices. Internet of things sensor technology can capture customers' attention by helping them to proactively schedule maintenance on a product, buy new products or demonstrate loyalty through connected devices. Customer service agents can also use mobile data to approach customers and engage them by highlighting products they may be interested in.

 

Another customer engagement method is to improve customer support and activity by creating new ways to interact with consumers. Slack channels, customer support help desks and forums, and mobile apps can not only be new avenues for feedback, but also foster communities of users.

 

Personalization of customer experience is a much needed customer engagement strategy. Customers are now connected via multiple devices including their smart phones, laptops, desktops, car entertainment system, home appliances etc. How an enterprise interacts with the customer to create personalized and consistent experiences is going to determine how the customer feels about that brand. Marketers are now focused on personalization technologies combined with analytics technologies to ensure that they profile a customer and deliver unique experiences. Having accurate and adequate data is key to ensure personalization. By leveraging AI, machine learning and deep learning, experiences could be tailor made across the customer journey to ensure relevant and engaging customer experiences.

 

A powerful customer engagement channel is Chatbots which allow customers to interact and get instant response without having to wait on long calls or follow up. Customers are used to instant messaging and look forward to the same ease of experience in dealing with the brands they interact with. The opportunity for conversational marketing at scale could potentially generate and convert leads, handle customer queries and complaints. Chatbots could provide rates, discount offers, take bookings and close transactions. A chatbot, however, for customer complaints needs a more careful handling, or could leave the customer even more annoyed.  While it could handle simple solutions for standard problems, for more complex ones, the bot could be programmed to direct to a live agent. Similarly, the bot needs to sense frustration in a conversation to then immediately direct that to a live agent.

 

Measuring customer engagement

 

While there is debate about how to truly determine engagement, companies can determine the Return on Investment (ROI) of their customer engagement efforts by taking related metrics into account. Examples include website traffic, interaction with certain links on websites, likes and shares of content on social media, text analytics of customer sentiment, response times, time to resolution, click-through rates in e-mail campaigns, Facebook and Twitter analytics.

 

Audience growth

 

Companies can derive data about their customers and products from observing customer engagement patterns. A/B testing of certain website presentations or marketing campaigns may be conducted to determine which methods are more effective in closing a purchase. Testing and data analytics enable companies to better determine which of their efforts they can correlate with higher sales, greater membership or other measures of customer success.

 

Customer engagement trends

 

With new form factors such as iBeacon technology and wearables, the digital experience of customer engagement is now combining with physical experiences. So, for example, a company may use beacons to identify that a customer is in a store and send that customer messages about items in an abandoned shopping cart online or discounts based on his presence in-store.

 

Customer engagement is also moving beyond the realm of retail or traditional product sales. Industries like healthcare are using technologies such as customer portals to engage patients in their health regimen and communication with doctors. Also new healthcare platforms are emerging with the express purpose of facilitating this communication and patient engagement. Wearables have also been identified as a key tool in patient engagement, enabling patients to measure various health indicators and track their health regimens.

 

Having loyal and happy customers is the core issue in any business. Going the extra mile in relation to customers is not just a rare or ad-hoc effort but is a consistent and long-term culture change that requires everyone right from the board room to front line executives to serve customers passionately. Successful companies have realized that customer experience has overtaken price and product as a key brand differentiator. Social media have changed the way enterprises communicate with their customers. Creating a consistently engaging customer experience along the customer lifecycle is almost a sine qua non for any business.

 

Marketers are working on generating revenues with this interactive, immersive technology of Virtual Reality. The economic impact of virtual reality likely is expected to hit about USD 15 billion by 2020. Brands are working to provide VR experiences to their prospects and customers in the form of product demonstrations, trainings to use products, installations and self-help for issue detection or small repairs. Companies in the automotive segment are for instance providing test drive with VR.

 

All technologies may not be relevant or important for every brand. Like any investment, a due diligence would be required to understand the cost-benefits and put a plan in place. Another important aspect in execution is the way the organization is designed. Providing unified customer engagement is very difficult when technology and organizational siloes exist. Managing the change from a people, organizational and technology side requires a champion who can take this up as a project, bridge siloes and manage from all angles including from a rewards and incentives standpoint. Poor customer experience created because of siloes cause immense customer frustration, with some abandoning their journeys and / or taking their business elsewhere. Getting access to data irrespective of where it resides in the enterprise is important to fuel a more comprehensive customer engagement. Using this data to then derive insights and enable richer customer experiences will help enterprises provide their customers exactly what they need.

 

Customer engagement strategies are essentially brand marketing strategies. Customer engagement should be pervasive across the enterprise. Enterprises will need to ‘listen” and hardwire this process into their business to feedback response to their product development, quality and other teams and respond faster to customers. It is important for enterprises to understand their brand aspirations and curate a plan for inspiring, converting and keeping customer loyalty.

 

(Courtesy : CXO Toda, TechTarget)

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