How Customer Engagement Impacts Your Business
August 24, 2018
I think we can all agree that customer engagement is the key to a successful business. An engaged customer base is a loyal fan base that is more likely to re-visit and re-purchase from your business. Looking back on the Leaky Bucket analogy, we can see that the most effective way to grow your business is to optimize your conversion rates and focus on customer retention — but first let’s get back to the basics.
What is Customer Engagement?
Customer engagement is the degree (1) of interactions a customer chooses (2) to have with your brand.
(1) There are different levels to engagement, some require more involvement than others. For example, entering a give-away versus reading a tweet. One action requires entering information and the other could easily be skimmed over.
(2) Choosing to interact with your brand indicates a certain level of emotional investment on your customer’s end. Also, a customer doesn’t necessarily need to only engage with your content, customer engagement also includes dialogues between your customers and their peers where the topic of their engagement is focused on your brand.
The Importance of Customer Engagement
Among the top C-level business executives, customer engagement is a high priority. For years, there has been a clear link between a customer’s satisfaction and profit. Based on Hall and Partners’ “Engager” model, up to two-thirds (2/3) of a brand’s profits rely on customer engagement. Companies who improve their engagement can increase their revenue from 13 to 51% and increase their average order sizes.
Through engaging interactions, your customers are showing interest toward your brand and are more likely to engage with you in the form of purchases, loyalty and customer retention. Customers who are more engaged should, in theory, be more loyal toward your brand – making your brand top of mind, choosing you time and again over your competition. Through these behaviours, your customers become your brand advocates.
Measuring Customer Engagement
Customer engagement is one of the most important key performance indicators (KPI) and one that many businesses are not tracking.
To track this KPI, start off by identifying all the measurable ways your customers are engaging with your brand. For example:
- Social shares
- Page views per visit
- Email open rate
- Time spent watching a video
- Time spent playing a branded game
Keep in mind, as mentioned, there are different levels of engagement. One way to look at it is by differentiating between passive and active engagement.
Passive Engagement is the lowest barrier of customer entry – meaning a bare minimum action is required. This includes views, impressions, likes and shares. Passive engagement is great for awareness however it’s no indication of loyalty or purchase intent.
Active Engagement is far more… well, active. Your customers are taking far more action than skimming through, scrolling-by and simply clicking – they’re entering their email address, adding to the conversation and taking part of your interactive content.
With these measurements, assess and choose which metrics have the most affect on your business. Through this assessment you can narrow down where and how to direct your marketing budget and if customer engagement is worth the investment. When you can see how engagement is directly correlated to your profit, you’ll be able to create happy, loyal and profitable customers.
Tying it all Together
Here at DeepMarkit, we emphasize focusing on active engagement over views and impressions. For example, if you’re paying to boost your video on Facebook, those millions of impressions might have just been the company’s auto play, counting three-second views. People scroll through their social media feeds so quickly that impressions are no longer a valuable KPI.
Creating experiences that encourage customers to spend minutes not seconds with your brand is huge. Creating an interactive social experience focused on conversion is a great way to both increase and improve your customer engagement and your business overall.