Did you know that two-thirds of a company’s profit relies on effectively engaging customers?
Customer engagement isn’t a fluffy marketing term. It’s a strategy proven to grow business and increase long-term revenue. As well as boosting your profit margins, engaging your customers could reduce churn rate and increase customer revenue by an average of 23%.
And that's before considering the impact of the pandemic.
Now, in the age of Covid-19, customer engagement is even more crucial to business success. Consumers are spending carefully and scrutinising the brands they shop with. Marketing budgets are smaller. Companies are under pressure to keep new customers acquired during lockdown.
The marketing landscape is new and evolving. Both macro – such as the nationwide lockdown – and micro effects – such as the buying options available to individuals – are continuously changing customer behaviour. To remain relevant, brands must understand and adapt to shoppers' changing needs and desires. Even if working with a reduced marketing budget and/or team.
As consumers shop in new ways, building advocacy through good customer experiences and high engagement is crucial. As is continuous measurement, so you can develop your understanding of what works for specific segments throughout the customer lifecycle.
Companies that improve engagement can increase cross-sell revenue by 22%, up-sell revenue by 38% and order size by 5 to 85%. Engage with your customers in the right ways, and you can turn one-off transactions into loyal brand advocates. Into customers who love your brand so much, they aren’t interested in looking anywhere else (even if they could find similar products cheaper). Customers who actively recommend your brand, introducing friends who are statistically more likely to spend more and buy again.
Customers with high lifetime value who drive significant long-term revenue for your business, in tough times and beyond.
Here's how you can do just that.
8 strategies for engaging your customers
1. Unite digital and physical experiences
In 2018, Nike opened a concept store for its NikePlus members. It used their data – buying patterns, app usage and other trends – to determine decisions like which products to stock.
While such a feat may feel more aspirational than achievable for your brand right now, it highlights how you can combine on and offline activity to create seamless customer experiences.
A good starting point for bringing the two together is by showing consistent, personalised content across touchpoints. A customer is far more likely to engage with an offer they see multiple times, particularly if at points of delight.
Imagine your customer has just placed an order. They see a message encouraging them to buy again within two weeks for a complimentary gift. They’re feeling excited about their new order but not quite ready to spend more money. Later that day, they get an email from your brand showing the same offer. This time, they browse your website but exit before checking out. A few days later, their order arrives. Excitedly, they open it and find an insert showing the same offer for a third time. This time, they make it all the way to check out and become a repeat customer.
Customers see countless messages online everyday, but rarely do they see the same message multiple times in both digital and physical form. A personalised in-pack insert enhances the unboxing experience and increases the likelihood of your customers taking desired actions. We work with Retain.me to provide this service to our clients’ customers.
Figleaves encourages customers to refer friends with a personalised in-pack insert
2. User-generated content
Social media can be incredibly powerful, but it’s also incredibly saturated with brands competing for consumer attention. User-generated content is a simple yet effective way to cut through the noise and reach your target audience.
If you sell everyday products like clothing or furniture, it’s likely your products are already in thousands of posts shared online. The trick is to make sure customers tag you in these posts and use your chosen hashtag. You can encourage this by using incentives, such as competition entry or the chance to feature on your website. Not only will this engage your customers sharing online, but it’ll also build awareness of your brand and support new customer acquisition. Websites with user-generated content typically increase return visitors by 20%.
Better yet, user-generated content offers an alternative to traditional advertising at a time when you’ve likely had to postpone or cancel photoshoots. Sharing images of real people using your products in their everyday lives offers a powerful alternative to professional models and slick photography. You may even find it yields better returns – and it doesn’t cost a penny.
Ted Baker invites customers to share their looks on social media
3. Newsletter subscriptions
Email CRM probably already plays a big role in your marketing activity. But does it play a big role in your customer retention strategy?
Connecting your email activity with onsite touchpoints is an effective way to encourage customers to return. For example, customers invited to subscribe to your newsletter when they've just placed their order are significantly more likely to do so than at other points in their journey. Once they’ve subscribed, you can build engagement with regular email updates that show you understand them and motivate them to buy again.
Underpinning all this is your metrics. To drive real value from your newsletter, identify how it impacts revenue. How do your newsletter subscribers behave compared to other customers? Do they order more often? Spend more? Recommend your brand to others?
Email CRM activity is a great way to nurture and engage new customers, but it’s not enough on its own. Supplement it with contextual information, such as if the customer is male or female, to personalise their email journey. For the best results, link it with all the other touchpoints that can drive engagement, retention and advocacy during your customer journey.
FatFace invites customers to sign up to its newsletter on the order confirmation page
4. A human touch
As the trend to #supportsmallbusiness shows, people no longer want to buy from faceless entities. They want to know their money is going into the pockets of real people with purpose. 64% of consumers feel companies have lost the human touch of customer experience.
Restore this element and stand out from competitors by showing the real people behind your brand. Tell their stories, from your founder to your warehouse managers and delivery drivers. Show consumers why your brand exists and how you can make their lives better.
Greeting card company Thortful, for example, reminds customers that their purchase means that ‘someone, somewhere does a little happy dance!’. It builds on this with photos of its card creators, showing the real people behind its products.
Thortful shows the real people behind its products
5. Meaningful feedback
57% of marketers say getting feedback is the best way to improve their customer experience.
Asking for customer feedback not only means you can keep a finger of the pulse of how your customers are feeling and improve your products and services, it also makes them feel heard. In fact, customers who give negative feedback to brands that act on it are more likely to return and order again than those who give no feedback at all.
NPS is a straightforward way to understand your customer sentiment throughout the buying cycle. Experiment with asking different segments for NPS feedback, then show messaging based on their response (such as incentivising promoters to refer friends).
Farmison asks customers for NPS feedback on the post-purchase page
6. Adapt to consumer behaviour
As the pandemic has emphasised, being agile and adaptive to changing consumer behaviour is crucial to providing a smooth customer experience.
During lockdown, Lululemon turned its stores into distribution centres to meet consumer demand. This not only meant it could drive consumer appetite and increase sales (fitness and loungewear were among lockdown’s sell-out products), but that customers were less likely to go elsewhere and discover new brands. It also presents positive news for the bottom line as it mitigates the problem of stock going out of date (prompting discount sales which can damage long-term brand reputation, particularly at higher price points like Lulelemon's). During the second quarter of this year, the sportswear retailer saw one of its largest market share gains.
Adapting doesn’t always mean logistics, either. B&Q was one of numerous brands to update its slogan as part of new messaging during the pandemic. It changed its well-known ‘You can do it when you B&Q it’ slogan to reflect a sense of community and positivity with ‘Together, we can do it’.
B&Q updated its slogan to reflect the Covid-19 crisis
7. Build a brand community
Being part of a community taps into a deep human instinct to belong. 40% of consumers spend more when part of a brand community, rising to 58% among millennials.
But building a brand community isn’t easy. It requires emotionally engaging your customers and offering value beyond your products. This starts with a meaningful mission: a purpose that sets your brand apart and inspires your customers. Huel’s is to make minimal impact on animals and the environment. Monzo’s is to build the bank you’ve always dreamed of. Rapha’s is to pursue performance.
Once you’ve nailed that down, give your team the tools to provide brilliant experiences that instil this purpose in everything you do. Layer this with genuinely useful content: engaging social media posts, informative blogs, emails worth reading. And interact with your customers every step of the way. Respond on social media, create forums, host events. Show your customers that they make your brand what it is.
Then measure the impact of this army of brand ambassadors on your overall revenue. How much do they spend compared to your average customer? How often do they return? How many new customers do they introduce? Elevate your community from a nice-to-have marketing initiative to a key revenue driver.
Lovecrafts invites shoppers to join its community of crafters
8. Socially responsible
People want to know who they’re buying from. The pressure is on for brands to be honest and transparent. Those that fall short of their values are called out and face the consequences. Boohoo’s shares fell by 40% after it was discovered to be paying workers as little as £3.50 per hour.
Online retailer Gymshark spent five months living out its vision to be ‘respectful to others’ with a temporary rebranding to Homeshark. Rather than simply change its name, get publicity then carry on as normal, it’s built on this with on-brand messages that conversationally – yet powerfully – promote doing the right thing. Last month, it shared an Instagram post telling its 4.6 million followers that it’d ‘restock the website when you lot start wearing masks’.
Gymshark encourages socially responsible behaviour during the pandemic
Creating a customer engagement strategy for long-term results
In the current environment, many retailers are discounting to drive sales and short-term profit. But this has dangerous implications long-term.
Unlike the tactics explored in this blog, giving discounts doesn’t build meaningful relationships with customers. It simply encourages them to shop around for the best deal. The more brands that hop on the discount bandwagon, the more reluctant consumers will be to pay full price. Trapping you in an expensive cycle.
Chances are, you’re already taking actions to build customer engagement. To make this into a cohesive strategy that drives long-term results, bring all your efforts together. The best customer engagement strategies combine tactics and continuously measure success to optimise their effectiveness.
Combine your tools and platforms – across marketing, logistics, ecommerce and every other area of your business – to thoroughly understand your customers and how to engage them throughout the lifecycle. Pay particular attention to customers acquired during lockdown. Our research into customer retention during Covid shows that these segments have different needs and desires to other customers.
Once you’ve developed this understanding, experiment with engaging with your customers in different ways. Data provides the foundations of effective customer engagement, but meaningful relationships depend on your creativity and problem-solving as a marketer. Create a retention strategy that shows you really understand and care about your customers, then watch your business grow.