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Intro to customer engagement marketing

18 Minute Read

Magnet with customer engagement icons stuck to it

CordialWe build technology to help brands send a better message.

Customer engagement marketing is so hot right now. And it matters because it fosters trust and loyalty across messaging channels, in both offline and online environments. High levels of customer engagement can reduce the cost of acquiring new customers while nurturing retention and increasing the value of customers to your company over time — and it all starts with going back to basics.

So we welcome you to review (or share) our refresher on how to implement a marketing strategy to cultivate customer engagement.

What is customer engagement marketing?

Customer engagement marketing is a strategy that primarily aims to increase customer interactions and foster brand loyalty. Common customer engagement marketing strategies include starting two-way conversations, creating interactive marketing campaigns, and using data to personalize marketing messages.

Although it can apply to many interactions with customers, customer engagement is often confused with other marketing concepts. So we pulled together a few simple breakdowns to highlight the nuances of how it differs from other ideas or strategies.

Customer engagement vs. customer acquisition

Customer acquisition is the recruiting of new customers. While it’s true that making a purchase is a kind of customer engagement, it’s only a specific event in the entire customer journey. On the other hand, customer engagement is more about getting existing customers to engage with your brand beyond simply making a purchase: for example, reading newsletters, commenting on social media, visiting your website, and so on.

Customer engagement vs. customer experience

While customer experience refers to the subjective, first-hand experience that your customers have with your product or service, customer engagement is more about whether or not your customers interact with your brand at all. Good customer experiences certainly encourage customer engagement, but the two things aren’t the same.

Customer engagement vs. customer service

Although customer services seeks to help customers resolve problems with your product or service — and is technically one form of customer engagement — customer engagement is a much broader concept.  Customer engagement also encompasses actions that a customer takes to interact with your product or company that aren’t just about resolving an issue. These actions could include things like opening your emails, commenting on your social media posts, or using your app.

Customer engagement vs. customer success

While the goal of customer success is to help customers understand how to use a product or service so they get value from it, customer engagement is more about the overall strength of the customer relationship. Engagement isn’t specifically focused on helping customers get value out of a particular product or feature.

Metric showing engagement stats

What are common customer engagement metrics?

A critical feature for developing and evaluating the success of a customer engagement strategy is to track relevant metrics. Of course, there are a number of potential metrics that you could look at, and some may or may not apply to your brand depending on your product and marketing strategies, but here are some of the most common customer engagement metrics:

Activity time

Activity time is the amount of time a user spends interacting with your website, app, or content. It can include time spent on a page, time reading an article, or time using your product. Higher activity time typically indicates higher customer engagement.

Churn rate

Churn rate is the number of customers you lose over a period of time, divided by the number of customers you had at the beginning of the given time period. The metric gives you the proportion of your customers that stopped buying your product or unsubscribed from your service. A lower churn rate tells you your customers like your product and indicates higher engagement.

Click-through rate (CTR) and interaction rate

CTR is the percentage of the users who open a message and click on a link. In SMS marketing, this is often called the interaction rate. The higher the CTR or interaction rate, the higher the customer engagement with your marketing message and content.

Conversion rate

Conversion rate is the percentage of users who complete a desired action, like purchasing a product or downloading a file. Higher conversion rates signal higher customer engagement.

Customer acquisition cost (CAC)

CAC is the amount of money spent to acquire new customers. It’s calculated by finding the cost associated with turning prospects into customers and dividing that by the number of customers acquired. It’s useful because it tells you about how efficient your marketing and sales efforts are — lower CACs mean more efficient marketing and higher engagement.

Customer effort score (CES)

The CES tells you how much effort a customer needs to interact with your company to complete a transaction or resolve a problem. Higher CES scores are typically associated with poorer customer engagement.

Customer lifetime value (CLV)

CLV measures how valuable a customer is to your company over the entire time that you have a relationship with them. It’s useful because it can help you identify the types of customers who typically add a lot of value to your organization so you can engage with them and try to retain them.

Customer satisfaction score (CSAT)

The CSAT tells you how satisfied your customers are with your product and service. It can also indicate how likely they are to buy from you again. CSAT surveys typically ask customers to rate their satisfaction with the following prompt: On a scale from 1 to 5, rate your overall satisfaction with the service you received.

Daily active users (DAU)

DAU is the number of unique users that are actively using your product or service each day. High DAU indicates higher customer engagement.

Delivery rate and bounce rate

The delivery rate is the percentage of messages that reach a subscriber’s email inbox or phone. Bounce rate is the inverse: the percentage of the emails that you send that are not successfully delivered to the intended customer’s inbox. High delivery rates enable higher customer engagement while higher bounce rates indicate that there is a barrier to customer engagement.

First-week engagement

First-week engagement is a measure of a customer’s or user’s interaction with your product over the first week. It’s useful because it can tell you if your onboarding is effectively demonstrating the value of your product to new users, or if they are abandoning it.

List growth rate

The list growth rate indicates the extent to which your subscriber list is expanding. It’s calculated by taking all the new subscribers in a period of time, subtracting the unsubscribers, and dividing that number by the total subscribers. Higher list growth rates signal better customer engagement for your lead-generating activities.

List size

List size is the total number of customers on your email list, SMS subscriber list, or another marketing channel list. Higher list sizes signal higher customer engagement.

Monthly active users (MAU)

MAU is the number of unique users that are actively using your product or service each month. High MAU indicates higher customer engagement.

Net promoter score (NPS)

NPS measures the loyalty of your customers to your product by asking about their willingness to recommend your product to others. NPS is usually measured with just a single question: How likely are you to recommend [Product or Service] to a friend or colleague? Respondents rate the question on a scale from 0 (not at all likely) to 10 (extremely likely).

NPS is a useful metric because it’s simple to collect, and it has been found to be meaningfully correlated with growth since it was introduced in 2003.

Open rates

The open rate is the percentage of your customers that receive a message and open it. Higher open rates mean higher engagement. Comparing open rates between email campaigns can help you identify topics that customers are more likely to engage with.

Revenue per message (RPM)

Revenue per message is the amount of revenue generated per email or SMS message sent. It can tell you how well your marketing messages convert your audience and how efficiently they generate revenue.

Social media engagement

Companies increasingly rely on social media platforms to build relationships with customers. Counting metrics like likes, shares, and mentions can help you understand how your customers are engaging with your company’s social media marketing efforts.

Unsubscribe rate

Unsubscribe rate is the percentage of recipients that unsubscribe from your email or SMS marketing list. The higher the unsubscribe rate, the lower the customer engagement. Unsubscribe rates are useful because they can help you identify content topics that customers are not interested in.

User actions

You can measure a number of different actions that a user makes on your website or in your app, such as clicks, downloads, swipes, and more. More actions taken typically signal more engagement.

Graphic with 290% revenue growth metric

How first-party data fuels customer engagement marketing

The metrics you choose should sync with the data that you have access to. First-party data is data that an organization collects about its own customers with their consent. Data can come from both online sources, like user actions in your app, or from offline sources, such as purchases in a physical store.

First-party data matters because it allows you to understand your customers and personalize their experiences with your brand. Consumers increasingly prefer tailored experiences and recommendations to their interests. Data is critical in providing these personalized experiences. And as web browsers increasingly phase out data from third-party cookies, which have traditionally been a rich source of data for marketers, first-party data becomes even more important.

What do you do with first-party data?

According to the Boston Consulting Group, here are four major ways companies activate their first-party data for marketing:

  • Defining the audience. First-party data can help you define audience segments and send them targeted messages, offers, and personalized content. For example, you can use data on customer purchases to segment your audience by their interests and send product recommendations based on those interests.
  • Lifecycle marketing. First-party data can help you understand where in the sales funnel a potential customer is and help drive them to convert. For example, web browsing data can tell you when a customer has abandoned an online order before they complete a transaction. Knowing this, a brand can provide a timely message to bring them back to the transaction so they complete it.
  • Personalization engines. First-party data can fuel machine learning and other powerful analytics that can transform real-time data into hyper-personalized experiences. For example, companies can use a customer’s product ratings to update that same person’s personalized product recommendations.
  • Cross-channel lead management. First-party data allows you to send a targeted message to a user on a different channel. For example, a company can send consistent messages to the same customer through email as well as through text messages, or even in-app messages.

Customer engagement marketing stats

Does customer engagement really matter? It does — and here are 10 customer engagement marketing stats to prove it.

1. Activating first-party data significantly increases revenue.

Using the first-party data you get from customers interacting with your channels can boost your bottom line. Google found that using just one of the first-party data activation methods just mentioned results in a 150% revenue increase. Using all four methods we mentioned can result in a 290% revenue increase.

2. Customers will trade data for value.

Customers are okay with giving brands their information — as long as it benefits them. Cordial’s Customer Engagement Study found that 70% of consumers would be willing to share more information with brands if they knew it would be used to improve their shopping experience.

3. Customers want consistent experiences across multiple channels.

Omnichannel marketing can help brands stand out in a crowded marketplace. Research by BRP consulting found that 51% of consumers believe that it’s important to not just get personalized experiences when interacting with a brand on one channel but to get those personalized experiences across all digital channels.

4. Consumers are more likely to buy when they are recognized.

Customers want to be remembered. In a report by Accenture, research found that 65% of consumers are more likely to buy a product from a retailer if they are recognized, remembered, and given relevant recommendations. The takeaway for brands is to ensure that they are providing personalized experiences when customers engage with them.

5. Customers will avoid brands with poor engagement practices.

Poor responses to customer engagement can hurt your brand. A study by Ipsos and Medallia found that 64% of consumers in North America and Europe have avoided brands — either online or in person — as a result of a bad experience in the previous year.

6. Customers are increasingly shopping on mobile apps.

Mobile apps are more powerful for customer engagement than ever. In Cordial’s Customer Engagement Study, we also found that 70% of customers reported that they shop on apps more frequently than they did a year ago. Gen Z and Millennials are most likely to use apps for purchasing, with 81% and 90%, respectively, agreeing that they use apps for shopping more than they did a year ago.

7. Irrelevant messages will cost you.

Email, SMS, and in-app marketing can be effective, but only if the message is targeted. If it’s not targeted, it could do more harm than good. In Cordial’s Customer Engagement Study, we also found that 78% of customers get frustrated when brands send them generic emails and text messages that aren’t relevant to them.

8. Interactions need to be fast.

Customers are less happy to wait for service, even online. A recent survey by Harris Interactive found that 52% of consumers expect a response from a brand within one hour after they engage with a company. Similarly, a 2020 survey by Forrester found that customers are 2.4 times more likely to stay when companies resolve problems quickly.

9. Investing in customer engagement boosts revenue.

2022 study by Twilio found that not only are businesses building their customer engagement capacity but that it pays off. They found that companies that made customer engagement investments saw an average of 70% boost in top-line revenue.

10. Marketers know that customer engagement is critical.

The evidence clearly shows that customer engagement is essential to an organization’s success. So it’s no wonder that businesses recognize its importance: 92% of business executives surveyed by Harvard Business Review in 2022 agreed that customer engagement is critical to their organization’s success. Another 88% agreed that it directly affected their bottom line.

Customer engagement best practices

Customer engagement marketing best practices

Customer engagement plays a massive role in a company’s success. So how do you ensure that your interactions are helping and not hurting the customer experience? Here are 10 best practices and strategies for customer engagement marketing.

1. Give a warm welcome.

First impressions are lasting impressions. Acquiring a new customer is just the first step in your relationship with them. Sending new customers engaging welcome emails can help you build your relationship while demonstrating your value. For example, The New Yorker uses a welcome email to celebrate new subscribers and explain how they can make the most of the subscription.

2. Develop a unique brand personality.

Customers engage with interesting, personable brands. Develop a memorable and relatable voice to increase engagement. For example, Slack creates an informal, helpful, and playful personality with its conversational, informative, and creative blog posts.

3. Create amazing content.

Customers engage with content that provides them value. The better the content, the more engagement you’ll see. For example, Intercom has invested its resources into developing one of the best blogs in the SaaS industry. Their thoughtful, high-value work has led to their being recognized as content leaders in the marketing and customer support field.

4. Collect data.

Knowing your audience helps you decide the types of messages to send them. When you target your messages to the right people, you boost engagement. For example, Savio collects data from free trial sign-ups so that they can serve content targeted to the user’s purpose and personalize the product onboarding experience.

5. Personalize experiences.

Customers engage with a brand more when the brand creates personalized experiences. Use the customer data you collect to offer experiences tailored specifically for your audience. For example, Cordial client Eddie Bauer uses their data to offer customers personalized coupons and offers that helped them increase engagement.

6. Respond quickly.

Rapid response helps to boost engagement. Same-day replies on email and social media are paramount‚ and replies within a few hours are ideal. For example, BlackMilk clothing responds to tweets within a few hours with helpful responses, replies to questions, and even the occasional gif.

7. Pair requests with rewards.

Reciprocity is gold. If you’re asking for something from your customers — to check out your blog post, to respond to a survey — make sure you offer them something in return. Discounts and offers go a long way towards boosting engagement. For example, offer a discount after purchases to encourage another purchase and boost retention.

8. Share user-generated content and reviews.

User-generated content helps create a sense of community and gets customers excited about your product or service. When it’s done well, it can drastically increase engagement. In one especially effective example, Doritos created a website where users can create branded videos and enter competitions for cash prizes. Doritos then shares these creations on social media. The posts often receive thousands of comments and likes.

9. Listen to — and act on — feedback.

Customer feedback is a particularly useful form of customer engagement. Encourage it by using that feedback. For example, if a customer makes a request for changes in your product, track the request, and use it to inform your product. And if you end up changing your product based on that feedback, close the customer feedback loop: reach back out to the customer and tell them.

10. Respect opt-outs.

The most important rule of customer engagement is to let customers disengage when they want to. It’s not just a legal obligation, but it’s also good marketing. Always ensure customers can easily opt-out of your email or SMS marketing list. If you don’t, you might get the wrong kind of customer engagement. Learn tips on compliance.

What NOT to do in customer engagement marketing

What about worst practices in customer engagement? Here are five no-nos for brands interacting with customers.

1. Don’t make it difficult to reach you.

If you make it hard for your customers to interact with you, they won’t. For example, if it’s not easy to find your blog on your website, your customers are much less likely to interact with it. Instead, make everything accessible and easy to find.

2. Don’t make customers feel disrespected.

McKinsey and Company has reported that 70% of a customer’s journey is guided by how they feel. Make your customer feel disrespected, and you’ll lose them. For example, failing to listen or empathize with a customer when they have a product complaint can make them feel worse and reduce engagement. Instead, listen to complaints, show empathy, and make respect a priority.

3. Don’t mismanage your social media.

Social is perhaps the most public place your customers can interact with your brand. Lots of brands have good social media moments where a funny or clever post goes viral. But there is a fine line between content that’s funny and sharable and content that falls flat or insults. For example, avoid these social media gaffes by big brands.

4. Don’t forget to leverage your data.

Customer data is one of your most valuable assets, but it can only benefit you if you use it. Some companies fail to take full advantage of their data because they leave it siloed in their various platforms or applications. Others fail to collect it at all. Instead, use marketing technology that makes it easy to collect and unify your customer data on a single data platform.

5. Don’t fail to include opt-outs.

Marketers hate to see customers unsubscribe, but it’s essential to provide that option. For example, failing to offer simple opt-outs for email or SMS marketing puts you at legal risk and also creates friction with your customers. Don’t be the brand that’s known for spam.

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What to look for in a customer engagement platform

Inspired to dive into customer engagement marketing? The easiest way to do it successfully is to use the right tool. When you’re looking for a customer engagement platform, make sure it:

  • Integrates with your most important channels, including email marketing, SMS marketing, and in-app marketing
  • Combines data management and analytics features with marketing activation functionality
  • Integrates with the other tools you use, like feature request tracking tools and customer service communications platforms
  • Provides beautifully designed content templates to make activation easy

Cordial has all these features and more. Get started — request a demo today.