When a customer is committed to the brand, there are usually more frequent, larger transactions, but also an interaction beyond the point of sale such as participation in social channels, word of mouth promotion, among other elements. Engaged customers have a lower churn rate and have less incentive to try other competing brands, although if they did, they are more likely to return to the brand with which they feel the most affinity.
There is no fixed relationship that applies to all brands, but normally engaged customers usually represent between 18% – 25% of total customers who make ~70% – 80% of sales. Losing a significant number of these clients can negatively and significantly impact the income statement.
Customer engagement is the repeated interactions that strengthen the emotional, psychological, and physical bonds between customers, brands, and companies. The above according to the publication made by the National Business Research Institute. The type of interactions a customer has with the brand can indicate whether the customer is loyal or engaged. An example of the above is if a customer frequently buys a product from a brand, it could be said that he is loyal; but this same client does not open emails or read communications that the brand sends him. In this case it is a client who is not committed.
To consolidate a relevant and successful strategy in customer engagement, 4 fundamental elements must be taken into account:
1. Experience
It is forceful. The experience that the client has when interacting with the brand is what can define whether the relationship will be fleeting or long-term. Brands that care about developing a sublime experience from the welcome process to the claims, returns or abandonment process, are brands that are sure to achieve lasting relationships. People tend to stick to brands that offer a thoughtful customer experience.
2. Relevance
According to a study by Kantar Retail where 71% of surveyed customers say that loyalty incentives are not enough to generate ties to a brand. Instead, in the digital and know-your-customer age, consumers are buying more according to brand relevance and their needs of the moment.
The relevance of a brand is created when you have an understanding of the consumer through data. When brands know what, how and when to offer a product or service to their customer, they become relevant, and this is thanks to the information collected and used to generate personalized content.
3. Stickiness
When a brand becomes sticky, it is guaranteeing that consumers will come back again and again to consume from it. It is the tendency of a customer to repeat interactions with a product or service. There are many factors that help a brand become “sticky” such as quality, price, convenience, experience, among others. There are very important benefits that are created when a brand has the category of sticky:
There is a greater value of the client in the time (CLTV)
Increase customer loyalty
Attract higher value customers
Help create referrals
Improve ratings and reviews
Generate higher sales and better margins
Better response rates and marketing investment efficiencies
4. Frequency
The repeated interaction of a consumer with a brand is equally important in creating customer engagement. There must not necessarily be a purchase or consumption. We are talking about how often the person interacts with the brand. It can be through a transaction, but it can also be through having contact on the brand’s social networks, providing comments or reviews, referrals, answering surveys, etc. The above examples show that a customer is engaged with the brand without necessarily generating a purchase. This adds a very high value to the brand in the long term.