What is Customer Engagement Marketing? - The Complete Guide

In today's digital age, it’s important now more than ever to connect with your customers on a personal level. With the ability to research, compare, and purchase products anytime– and anywhere– today's consumers expect consistent brand interactions across the channels they frequent. Meeting these digital-first consumers where they are and providing ongoing value is critical for winning and keeping their business.

A key way businesses can accomplish this is through implementing an effective customer engagement marketing strategy. What exactly does customer engagement marketing look like in today’s digital landscape, and how can you execute it successfully?

This comprehensive guide will walk you through everything you need to know, from defining customer engagement, to the top tools and strategies to boost engagement at each stage in the buying cycle.

With the right approach to engaging customers before, during, and after purchase, you can transform prospective buyers into lifelong brand advocates. By the end of this article, you'll understand exactly how to create targeted campaigns that form meaningful connections with customers and drive growth for your business. A newer form of marketing, coined “human to human marketing,” is the future… And without it your business could get left in the dust.

What Is Customer Engagement Marketing?

Engagement marketing is a model that focuses on building customer relationships through two-way communication channels. When you put your customer at the center of their own buying experience, outdated sales and marketing funnels serve little purpose. Instead, engagement marketing focuses solely on the emotional states that guide buyers toward their desired outcome.

Brands can engage with their target audience across a wide range of channels including email, social media, SMS, apps, and more. The more opportunities for meaningful interactions, the better brands can engage customers throughout their buying cycle. Putting together a strategic omnichannel approach is key.

Why Does Customer Engagement Matter?

A combination of rising ad costs, increased competition, and ever-growing customer expectations make implementing a strong engagement strategy crucial.

Ad rates on digital platforms continue to climb year over year, with more brands than ever fighting for attention in crowded markets. According to Hunch Ads, 5 major social media platforms have shown a dramatic increase in advertising costs year-over-year. CPM (cost per thousand impressions) is a widely-used metric to base the cost of ads on because it allows you to compare the relative cost efficiency of advertising across different platforms, placements, or campaigns. In July 2021,

• Google and YouTube’s CPM was up by 108%
• Facebook ad cost had an 89% increase, while the average CPM was $11
• TikTok's CPM went up by a 92% increase and
• Snapchat had “the lowest” 64% increase in CPM

On top of this, Facebook adds an estimated 1 million new advertisers every year. There are now over 10 million active monthly advertisers on the platform.

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It’s clear, paid advertising alone can no longer efficiently attract and retain customers for businesses.

Additionally, today's consumers expect ongoing, personalized interactions across channels from the brands they support. If you want to stand out from your competition, a one-size-fits-all approach just won’t cut it. Tailoring your message to each customer and channel may sound like a daunting task, but it comes with an added list of benefits too.

Benefits of Customer Engagement Marketing

By enacting a customer engagement strategy throughout the extent of the buying cycle, your business is sure to see a list of added benefits. Let’s jump into a few.

Increased Customer Loyalty and Retention

Appealing to your customers’ emotions through continuous engagement is a great way to boost brand loyalty and retention. Engaged consumers have a higher lifetime value and lower churn rates. When they build a strong relationship with your brand they often become vocal brand advocates, driving awareness through word-of-mouth referrals and user-generated content on social media platforms.  

Higher Customer Lifetime Value

With increased customer retention, customers are more likely to continue to spend with your brand. According to Gallup, emotionally connected customers have a 306% higher lifetime spend compared to those with low engagement.

It’s also much more profitable for brands to retain customers, rather than continuously run paid advertising campaigns to acquire new customers.

Improved Brand Reputation

Engaged and happy customers help drive additional traffic to brands and promote growth. Word-of-mouth marketing, social media content, and positive customer reviews build brand credibility and awareness. This valuable earned media from brand advocates can often carry more weight than a company's own marketing efforts.

Cost-Effective Marketing

As mentioned earlier, rising ad costs across a variety of different digital platforms are making paid marketing strategies more expensive than ever. Additionally, the customers acquired through organic engagement efforts like content marketing and community building tend to be higher quality since they have voluntarily engaged with your brand.

While paid advertising still plays an important role in your overall marketing strategy, focusing budget and resources on nurturing these organic relationships can deliver ROI in the long term. Engagement marketing ROI could be a direct monetary return, but can also encompass other types of value, such as increased brand awareness and loyalty.

Valuable Customer Feedback

Another great way to engage your customers is giving them the opportunity to provide feedback for your business. One opportunity is to use webinars as an engagement tool and allow your consumers to engage in surveys, live polls, Q&A sessions, and more.

These tools will not only provide you with great ways to improve your business, but will also help you get further insight into the mind of your ideal target audience. Two-way engagement provides first-party data about consumers’ pain points, motivations, wants, needs, and more.

All of these benefits can help accelerate growth in your brand. By increasing engagement, one Gallup study showed:

• 66% higher sales growth
• 25% increase in customer loyalty
• 10% increase in net profit
• +20 percentile-point increase in customer confidence

Now that you know a few of the ways customer engagement marketing can increase profitability and grow your brand, let’s take a look at some of the top strategies and tools you can start implementing today.

How To Implement Customer Engagement Marketing

Before you can start implementing a customer engagement marketing strategy for your brand, it’s important to set clear and measurable goals. Pick metrics that matter for your individual business– these will vary across different niches and industries. Some may include:

• Customer retention rate: Measure the percentage of customers retained over a period of time. Your goal here could be to increase retention by 25% year-over-year.
• Customer Lifetime Value (LTV): Track the average revenue generated per customer over the buyer lifecycle. This goal may be to increase the average LTV by 50%.
• Engagement rate: Calculate engagement per individual channel, such as email open rate, reactions on social media posts, event attendance rate, etc. Your goal here could be to increase engagement rate to over 20%.
• Churn rate: Measure the percentage of customers that stop purchasing from or communicating with your brand each month (or year). One goal to set could be decreasing churn by 10% year-over-year.

Again, specific targets or metrics will really depend on your business, but these may be helpful to keep in mind to quantify loyalty, value, and engagement. Once your goals are set, you can start engaging your customers with these next steps.

Understand Your Audience

Understanding your audience is the foundation of effective customer engagement marketing. Thorough market research is necessary to “put yourself in their shoes.”

Here are just a few of the ways you can get a deeper understanding of your audience:

• Conduct polls or surveys to gather opinions, preferences, and overall sentiment.
• Analyze social media behavior, demographics, and interactions to learn how your audience likes to communicate on digital platforms.
• Utilize customer feedback and reviews to identify common pain points and areas for improvement.
• Craft a handful of unique buyer personas to represent different segments of your audience, helping you personalize your approach for each.

Once you know the ins and outs of the way your consumers’ minds work, you’ll be able to personalize your approach.

Focus On Personalization

The key to capturing your audience's attention and fostering a sense of connection with your brand is by personalizing your message. According to McKinsey & Co. 76% of consumers were more likely to consider purchasing and 78% were more likely to repurchase from brands implementing a personalized messaging approach.

Here are a few specific strategies you can use to personalize your content and messaging:

• Use dynamic content in communication to display products or offers tailored to individual preferences. This dynamic approach ensures that your customers see items they’ve already shown interest in, increasing the likelihood of conversion.
• Use personalized chatbots on your website to help guide your customers through their journey or listen to questions and concerns.
• Implement retargeting strategies to re-engage visitors who have interacted with your brand but didn’t make a purchase. Show them personalized content based on their history or items left in their cart. This reminder prompts customers to return and oftentimes even complete a purchase.
• Craft messaging tailored to hyper-specific segments of your audience, addressing their unique pain points or opportunities. Tailoring your communication ensures that your audience feels understood, valued, and enhances their overall engagement with your brand.

Personalizing content creates a cohesive customer experience, driving long-term success for your business.

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Create Valuable Content for Each Stage of the Customer Journey

Crafting content isn't just about providing information, it's about delivering meaningful, actionable, and relevant insights that present significant value to your audience. For specific insights into each stage of the buyer cycle, reference Figure 1 above. Here are a few examples of relative content that could provide value to your audience:

• Exclusive Promotions and Discounts: Offering exclusive deals, discounts, or early access to new products or services gives your audience a feeling that their business is valued. Implementing limited-time promotions also creates a sense of urgency, encouraging immediate action.
• Personalized Product Recommendations: Use algorithms or machine learning that can analyze customer preferences and behaviors. This data can help provide tailored product recommendations for your audience.
• Educational Workshops: Hosting live events led by industry experts can give additional knowledge not available anywhere else. Provide industry-specific insights and practical tips that consumers can apply in their personal or professional lives.

Utilize Multi-Channel Engagement

It’s very important to meet your customers where they are. Now that the average consumer switches between three different screens a day across hundreds of individual platforms, utilizing an omnichannel approach is necessary in speaking to them effectively. According to a study done by omnisend.com, marketers using three or more channels per campaign saw a 494% higher order rate (total number of orders divided by total messages sent) than those using a single-channel campaign.

In the ever-evolving digital landscape, adapting to consumers' multi-screen behavior is necessary to strong engagement. Having multiple touchpoints with your customers across their favorite channels is sure to boost their relationship with your brand.

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Use a Customer-Centric Approach

To engage customers most effectively, it’s important to put them at the heart of your strategy. Actively listen to the feedback left by your customers, whether positive or negative, and use it to enhance your offers. Personalize your communication and engagement efforts, making sure each customer feels valued and understood. Aim to build a lasting, personal relationship with each individual to transform them from a first-time customer into a lifelong brand advocate.

Email Marketing: Your Secret Weapon

In our opinion, email marketing remains an under-utilized tool for customer engagement. It is one of the best channels to foster a two-way channel of communication. Craft compelling and relevant content that captivates your readers, addressing their specific needs and interests.

Automation can enhance efficiency, encouraging timely responses and personalized follow-ups. Here are a few ways you can personalize your email efforts:

• Interactive Content: Embed interactive elements within your emails, such as polls, quizzes, or surveys. Interactive content engages your audience and also provides valuable data on their unique preferences. Use this data to tailor future emails, ensuring your content aligns with their interests and desires.
• Personalized Subject Lines: Craft subject lines that resonate personally with each recipient. Use their name, reference past purchases, or incorporate location-based information. A personalized subject line increases the likelihood of the email being opened and encourages recipients to engage further.
• Feature User-Generated Content: Encourage customers to share their experiences, photos, or reviews related to your products or services. Incorporate these user-generated content pieces in your emails. Not only does this create a sense of community, but it also showcases real-life usage, making your emails more relatable. Additionally, featuring customer content demonstrates appreciation, encouraging recipients to interact and contribute further.

By integrating email marketing into your customer engagement strategy, you can nurture relationships, drive conversion, and ensure your audience stays informed and engaged.

Continuously Track and Optimize Engagement

Utilize analytics tools to monitor customer interactions across various channels in real-time to ensure your efforts are effective in changing market dynamics.

Analyze metrics such as engagement rates, conversion rates, and customer feedback to gain valuable insights into your audience's preferences and behaviors. Identify patterns and pinpoint areas for improvement within your specific engagement strategies. Regularly conduct A/B tests on different approaches to understand what resonates best with your audience and adjust your efforts accordingly.

By adapting your approach based on these data-driven insights, you can not only ensure your strategies are working, but it will also boost customer satisfaction and position your brand ahead of the competition.

Bonus: B2B Engagement Marketing

Establishing regular and tailored connections with your B2B audience creates opportunities for upselling and cross-selling. Engaged clients are more likely to explore additional products or services that address their evolving business needs. Align your messaging with each individual business’s goals. Positive engagement experiences also encourage repeat business and higher customer lifetime value, contributing to long-term revenue growth for your brand.

Examples of Successful Customer Engagement

Here are a few real-world examples of brands excelling at omnichannel customer engagement:

• Sephora built a community for its customers to discuss beauty, earn rewards, and access exclusive offers.
• Starbucks rewards frequent visitors in its app with free food and drinks through a loyalty program.
• Shopify nurtures customers through the buyer lifecycle with tailored educational content matched to their current stage.
• Amazon leverages complex algorithms and machine learning to deliver tailored recommendations for its buyers.
• Spotify's personalized playlists match music to users' individual tastes based on their listening data and habits.

It’s important to note here that while these brands provide stellar customer experiences through personalization and engagement, it should be done ethically with respect to user privacy. Brands should be transparent about what data is being collected and how it is used to power these customer experiences. Consent should be obtained where applicable over data sharing preferences.

Customer engagement isn't just a strategy; it's an ongoing philosophy. Combining a customer-centric approach that appeals to emotions with continuous tracking and optimization will help build an army of loyal customers for your brand. By actively listening, understanding, and addressing the needs of your customers, you build not just transactions, but personal relationships. Start incorporating these strategies for customer engagement, and your brand is sure to grow, become more profitable, and stand out from the competition.

Frequently asked questions about Customer Engagement Marketing:

What is an example of customer engagement?

One example of customer engagement is sending targeted emails that provide valuable content to customers based on their specific interests or past purchases. This engages them by building an ongoing relationship with the brand. Other examples include monitoring and interacting with users on social media, providing personalized product recommendations, or utilizing chatbots to provide customized support for your consumers.

What are the 5 stages of customer engagement?

The 5 key stages of customer engagement are:

Awareness - Getting on target customers' radar through advertising and content marketing.

Consideration - Providing valuable information to customers evaluating products to stand out from competition.

Purchase - Ensuring a seamless buying experience for consumers to purchase your product or service.

Retention - Maintaining the relationship with consumers post-purchase through ongoing communication and service.

Loyalty - Creating brand advocates who continue to engage, re-purchase, and refer others.

What is the overall goal of customer engagement marketing?

The primary goal of customer engagement marketing is to foster meaningful, ongoing connections and interactions between a brand and its customers throughout the entire customer lifecycle. This deepens the customer relationship over time, leading to increased loyalty, lifetime value, referrals, and overall growth for your brand.