Customer Engagement – why is it important?

Customer Engagement – why is it important?

In the Internet Age Customer Engagement is King

Don’t dismiss it as just another buzzword; ‘customer engagement’ is your number one weapon when it comes to selling online.

One of the biggest challenges when marketing your business online is finding ways to differentiate your offering from the hundreds, if not thousands, of others offering virtually the same product or service.

With margins squeezed ever lower and competition from around the world, competing on price or quality alone is rarely an option. So how can you differentiate and stand out from the crowd? The answer is customer engagement – or in other words, the way you connect with your existing customers and successfully attract new customers.

What is Customer Engagement?

As the name suggests ‘customer engagement’ is all about how you interact with your customers. It’s not just customer service, although that is a part of it, but is more about the emotional connection you create between your brand and your customer.

Customer engagement means treating customers as individuals – not a collective. It’s about ensuring you delight them throughout every step of the customer journey, pre-empting their needs and being there with the perfect product or service at the right time.

It’s about communicating with customers in a way that makes them pleased to hear from you. Crucially, it’s about gaining their loyalty, making them feel warmly about you and your brand, turning customers into ambassadors.

Customer Engagement is Nothing New

At this point you might be thinking “Surely customer engagement is nothing new”, and you’d be right.  After all, businesses have been engaging with customers for centuries.

From the baker who provides free product samples or the butcher who offers a delivery service to the hairdresser who remembers the names of your kids; successful businesses have always understood the importance of creating a connection. The difference today is, thanks to the internet and social media, customer engagement has never been more important. Whether they’ve had a good experience or a bad one, customers can tell the world in under a minute.

How to Create Customer Engagement

There are countless ways in which you can engage customers and the methods you choose will depend on the market you’re selling in. Here are just a few techniques to consider:

  • Offer a personal service – if aspects of your product or service can be tailored to the individual then do so.
  • Speak their language – use a friendly and warm tone in all your interactions with customers. Always think about the individual human being who is reading your words.
  • Create communities – make your customers feel they are part of something special by creating online communities using social media.
  • Respond quickly – always answer queries and comments quickly on social media. Remember, although you may be replying to just one person, hundreds of others may be reading your responses.
  • Surprise customers – go beyond what is expected and delight your customers with something unexpected. It could be free delivery, a birthday discount or beautiful packaging.
  • Seek feedback – ask your customers what they think and demonstrate how you are taking their views on board.
  • Be transparent – always make sure the customer knows exactly what they can expect. That means no hidden costs or complicated contracts.
  • Make life easy – from your ordering and delivery processes to getting in touch with a query, make every step of the customer journey as simple as possible.
  • Tell a story – use storytelling to create an emotional connection with your customers. Share the dreams that led you to create your brand or explain how your business helps others.

Read the Pact case study to find out how the coffee subscription start-up creates an emotional connection to engage with customers.

How to Measure Customer Engagement

If customer engagement is the holy grail of attracting and retaining customers, it makes sense to measure it.

It may seem ‘engagement’ is an abstract concept, impossible to measure but in fact there is a very simple way to calculate customer engagement, using a system known as ‘net promoter score’ (NPS).

NPS is a method used by progressive organisations to measure customer engagement. It gives a clear indication of how your business or brand is viewed by customers and can be used to predict and improve business growth.

How to Calculate Net Promoter Score

To calculate your NPS, you need to ask your customers one crucial question: “How likely is it that you would recommend us to a friend or colleague?” with a ranking of 0-10, indicating how likely they are to recommend your brand.

Respondents can then be grouped as follows:

  • Promoters (score 9-10)
  • Passives (score 7-8)
  • Detractors (score 0-6)

The percentage of promoters minus the percentage of detractors gives you your NPS. The figure will be somewhere between -100 (when everyone is a detractor) to 100 (when everyone is a promoter). Generally, a score of 70 or over is considered very good but of course, benchmarks vary between industries.

Working out your NPS is just the start. It’s not just about getting a figure to present to your board – it’s what you do with that knowledge that counts. Ask your customers the right questions and you’ll determine why you have a particular score and can then take steps to boost your score by improving customer engagement.

If you’re interested in NPS, also see out book review on The Ultimate Question which goes into more detail on the subject.

Using a Referral Scheme to Attract New Customers

It’s easy to see how important customer engagement is in retaining existing customers but it’s also a powerful tool to attract new customers to your brand.

After calculating your NPS, you’ve hopefully found customers are willing to recommend you to their friends or colleagues. But we know how busy people are and no matter how much they love your brand, taking the time out of their day to recommend you is unlikely to be a priority.

So how can you ensure your customers progress from simply thinking “I must tell everyone about this great brand” to actually doing so? Well, you need to make it easy for people to recommend you and a simple way to do this is by introducing a referral scheme. By offering a small reward when they refer you (such as a discount, or credits to redeem later), you can encourage your customers to spread the word about your brand.

Again, read the Pact case study to find out more about how brands are using referral schemes to build their following and reach new customers.

Boost Customer Engagement to Boost Sales

So, we’ve seen that to build a successful brand that stands out from the competition, customer engagement is key.

With successful customer engagement, you’ll retain existing customers, encourage them to spend more and turn them into brand ambassadors. Combine this with an effective referral programme and you’ll really supercharge the power of customer engagement.

If you’re serious about business then seek help and support from experts who can add value, guide you and help you develop and grow your business using strategies such as customer engagement.

Straight talking, blunt business advice – that would be the Yorkshire Powerhouse

Have you any questions?

Here at Yorkshire Powerhouse, we’re happy to help as much as possible – is there anything else we can do to help you, do you have any further questions or can we help introduce you to an expert – please let us know:

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