We live in a world where customers expect brands to anticipate what they need and meet those needs in real-time. While established brands have big budgets to engage their customers, small and medium businesses (SMBs) often face difficulty. But why engage with your customers in the first place? Does it add any value to your business?
What is customer engagement?
Customer engagement is quite a buzzword among small and midsize businesses (SMBs) nowadays, most companies get it either partially or entirely wrong. By definition, customer engagement refers to the measure of a business’s interaction with its consumers across all touchpoints throughout their journey.
Let’s break it down. What’s your favorite brand? It could be a well-known name like Nike or BMW, or a smaller business. Now, ask yourself why you like the brand apart from the quality of their products. If you can come up with a few answers, it means that your favorite brand has successfully managed to engage you.
No brand sells bad products. Compare Nike with a less popular footwear brand like Reebok. Not that Reebok’s products are of low-quality. In fact, a few years ago, Reebok was head-to-head with Nike and Adidas.
But what went wrong? Congrats, if you guessed it right. The brand failed to engage its customers as Nike and Adidas did.
Social following is a good metric to measure customer engagement. Nike has 1.57 million subscribers on YouTube. Adidas has 915k subscribers. Reebok has only 165k subscribers, ten times less than Nike. The story is the same on Instagram. Nike has 126 million followers, compared with 36 million of Adidas and only 2.5 million of Reebok.
However, social media engagement isn’t the only customer engagement metric a business should track. Brands like Nike have mammoth social media budgets, which help them get such a high level of attention and recognition.
As a small or medium business owner, you might not be able to invest heavily in social media. There are other, more accurate metrics that can help you determine customer engagement. These include:
- Net promoter score (NPS)
- Customer satisfaction (CSAT)
- Customer lifetime value (CLV)
- Customer stickiness factor or customer retention
- Time on page
- Bounce rate
- Completed actions
- Email open rate
How can customer engagement grow your business?
Customer engagement has, for a long, been the focus of all large and established brands. But the future has a lot in store for SMBs. Smaller companies can’t overlook the customer engagement factor, as it can turn out to be detrimental to their business.
Besides, the digitization era has provided customers with more options than ever. If you fail to engage your customers, they’ll start looking for other alternatives. And sadly, there’s no shortage of other options. Here are five reasons why SMBs should prioritize customer engagement.
1. To boost sales and conversions
Customer engagement is directly associated with revenue. When your customers feel engaged, they’re more likely to buy from you. A Constellation Research report showed that companies that ensure engagement could boost their cross-sell and up-sell revenue by 22% and 38%, respectively.
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2. Increased customer loyalty
SMBs can improve customer loyalty by engaging their customers. Many companies make the mistake of focusing too much time, resources, and attention on customer acquisition. They tend to overlook their existing customers.
While acquiring new customers is crucial, repeat customers are responsible for almost 50% of a business’s revenue. But repeat customers don’t come easy. As discussed before, customers nowadays have a lot of options to choose from.
So, a high-quality product won’t be enough to convince your customers to stick with you. You’ll need to engage them regularly and read their minds. When you engage your customers, you become a part of their lives.
Suppose they follow you on Instagram or Twitter. Every morning, when they open social media, they find the content you’ve shared. When your consumers keep coming across your brand consistently, they start seeing you as a friend and not as a stereotypical company trying to sell them something.
3. Enhance brand awareness
High levels of customer engagement result in increased brand awareness. When you keep your customers engaged, they start to recognize and remember you. Moreover, engaged customers are more likely to speak positively about your brand to their friends and colleagues.
And if you don’t already know, more than 74% of consumers consider word of mouth as a major influence on their buying decision.
When you engage your customers, they become your brand advocates. They talk about you on social media and recommend you to others.
Social media has a vital role to play here. Every brand has social followers who aren’t customers but love the brand. These people like the product, but they don’t just need it yet. Or maybe they’ve used the product before and don’t need it anymore.
These people may not buy from you, but they can advocate for your brand online and help you generate more customers. In all, they can put your marketing efforts on auto-pilot mode. This can be a huge boost for small and midsize businesses that struggle with the rising marketing costs and depleting ROI.
4. Get a competitive edge
About 200 million companies exist worldwide. You can imagine the level of competition. No matter how unique your business idea is, there’s always someone you’ll be competing against. As an SMB, your focus shouldn’t be to avoid competition but to outshine it. Engaging your customers is an excellent way to do that.
A competitive business landscape is like a sea full of drowning people. Your business is a ship, and so are your competitors. As more ships enter the sea, people get more options to choose from. Hence, the competition increases, and the ships need to put in extra effort to convince people to choose them.
Larger ships are likely to attract more people. So, you can brand yourself as the largest ship in the sea. Another way is by offering free resources, like food, sleeping beds, etc. There are myriad ways you can engage the people and persuade them to choose your ship.
We’ll talk about ways to engage your customers in a minute. But what will happen when you engage the people better than the other ships? You’ll get a competitive advantage. More people will want to board your ship.
The same story takes place in the business atmosphere. With so many companies out there, the ones that manage to engage their consumers end up getting a significant competitive advantage over others. That’s how Nike became the indisputable king of the footwear and sports athleisure sector.
5. Provide better customer service
An American Express report showed that 90% of American consumers consider customer service the key factor when choosing a company.
We live in an increasingly customer-focused business world. Now, the quality of your product or service is less important than how you serve and take care of your customers. Understanding their needs and promptly resolving them is the key to ensuring that your customers stick with you.
Customer engagement helps improve your customer service efforts. When you engage your customers, they’re more likely to interact with you, give you reviews, and respond to your questions and surveys. This way, you can recognize what your customers don’t like and fix it. You can also try automating your customer engagement process to make it consistent.
For this reason, social media has become the go-to medium for brands to answer their customers’ queries. Many leading brands have a Twitter handle dedicated solely to customer support and service. Customers can tweet their questions, and brands can instantly respond, thereby providing better customer service and experience.
How SMBs can increase customer engagement?
We know customer engagement is crucial. It can increase your sales, improve customer retention, and enhance your customer service. We also looked at the key performance indicators (KPIs) you should track to measure customer engagement.
But what to do if your customer engagement is low? Here are a few proven customer engagement strategies that work.
1. Make customer experience a priority
Customer experience is the biggest factor that affects customer engagement. If you provide your customers with a better experience, they’re more likely to engage with your brand. To improve customer experience, you need to understand who your customers are and what they want.
Creating an emotional connection with your customers is also critical. They should relate to you. Refer to the Nike example discussed earlier in this content for a better understanding. Lastly, collect customer feedback in real-time and act upon it regularly.
2. Be a human
People don’t want a company that sells products. They want a human – a guide – that can make their lives better. Be that human guide. Humanize your brand so that your customers can relate to you. This goes for B2B businesses as well. Though you’re dealing with another company, a ‘human’ will take the final call.
3. Use social media the right way
Social media is a great way to get human and engage with your customers. Sadly, most brands get it wrong. Sure, you can share blog post links and other ‘business’ information on social media once in a while, but that’s not what it’s meant for. It’s a place where you should get sassy and naughty with your customers. Speak their language, feel their pain, and be a part of their celebrations.
Netflix is a great example. The OTT platform has more than 10 million Twitter followers. You’ll seldom see promotional tweets asking you to subscribe to a Netflix plan. What you’ll see are tweets that people can relate to.
4. Personalize communications
Personalization is another buzzword you’ll often come across, especially in the online business landscape. But it isn’t a mere buzzword. If done correctly, personalization can be your gateway to enhancing customer engagement.
An easy way to personalize your communications is by addressing your consumers with their first names. When you send emails, instead of writing “Hello,” you can address the consumer with “Hey Cathy.” This small change can go a long way in personalizing customer interactions.
5. Use QR codes
If you’re a brick-and-mortar store owner, you can engage your customers using QR codes. Print QR codes on your store walls, windows, and other areas, and link them to your website, social media, or offers. QR codes are easy to create, and you can make one using a QR code generator.
To conclude, SMBs should make customer engagement an essential metric to track customer experience and overall business success. As the business landscape continues to become customer-centric, companies need to invest their time and resources to engage their customers and enhance their experience.