What is Customer Engagement Model and Why Does It Matter?

  • Sweta Chakraborty
  • 19 October 2021

Customer Engagement Model

Sound business operation relies on its product, sales/outreach, and customer relations. One must consider them to be the pillars on which a business stand. If your business fails in any of these aspects, profit generation for apparent reasons will take a considerable dip. While they do stand-alone, they are but intertwined. Even with the best products, sales without customer retention are just temporary reap. Good customer retention means effective customer engagement: making a customer feel valued and in control. Investing time and effort into relations with potential and current customers means higher retention, withholding your business's existing revenue streams.


What is Customer Engagement?

Customer engagement is an approach to building and maintaining a relationship with a customer, right from the moment of first interaction. Obviously, there are no ideal engagement models for every business; instead, a general benchmark that needs to be followed alongside the business's unique needs. Understanding the customer psyche is essential as it unfolds how many stages the customer will interact with the brand. 

Every business revolves around selling something. The act of enticing customers over time, in general, has remained the same. However, today's customers are a lot more technology-centric. It means customers today can be met/reached with far more exciting methods than done traditionally. Moreover, the invention of multi-channel interaction technologies such as SMS, social media, email, and chat has made the whole process far less expensive. It's essential to understand the various stages of engagement a customer goes through to understand customer engagement. 

Customer Psyche:

  • Customer's Unfamiliarity: This is the stage where the customer is still unaware of your business and your products. At this moment, outreach and 'getting the word' out there is the best possible solution. Customers today are bombarded with information, and how they process that information is also dependent on their psyche. While this is a stage where the customer-business relations are in its infancy, it is also the most crucial stage to impact the said psyche. You need to generate relevant and interactive content through text, audio, and visuals. For example: using simple symbols representing one aspect with a clear, informative context goes a long way in winning the customer's trust. This is where various branding and marketing initiatives are made like adverts, social media campaigns and various webinars to create the familiarity.

  • Brand Unearthing: These are the first few baby steps taken by the customer, where they begin to discover your business. Understanding your audience here is essential. Questions such as 'who they are' and 'how did they find out about you?' are what we intend to answer at this stage. In marketing, the answers to these questions will prove valuable later as we move towards building your customer engagement model as these will form its very basis. I marketing parlance, this is called the Top of the Funnel (ToFu). There are various smart approaches brands should take to address the customer discovery phase. Content marketing couple with AI chatbots creates a good engagement.

  • Customer Consideration: The customer is still considered neutral at this stage from your business standpoint. Your business right now stands an equal chance with your competitors with no reason for the customer to tip in your favor. Complete market analysis and building around it is crucial at this stage. It will help give you a better overall picture of what can be done to tip the logical customer in your favor. This is where the customer should be provided the value proposition or offers, discounts etc to tip in your favour. Various smart techniques like interesting comparison charts to landing page to grab for an offer, a webinar or a live demo could create the difference. Live chat or omnichannel agents are very important at this stage so that the right person is available for the customer to assist him in moving in to the next stage.

  • Customer Acquisition: This is when the customer has decided to go ahead with your business's product/services. Once the purchase is made, maintaining dialogue is imperative for customer value. A simple email thanking them goes a long way. The business now needs to focus on those who reach this stage but still decide at the last minute to backtrack and reassess their decision. Every customer lost, potential or existing, is a loss for the business. Therefore, understanding their mindset and deterrents will help avoid such situations in the future. In ecommerce business, cart abandonment is a very critical fall out and has to be quickly handled. A smart way to handhold the customer is by triggering smart sales bot and initiate a chat for any assistance. 

  • Customer Management: Nurturing the customer after the initial purchase is crucial. Retaining customers is essential because, statistically, customer acquisition is costlier than retention. The aim is to generate customers loyal to your brand. This is when you build a brand for the said customer by creating value through relevant engagement. For example, action-based marketing, scheduled check-ups on product health, looping customers in regular product updates, rewarding customers for being engaged, and actively trying to reach out to the disengaged customers. A proper CRM tool will send prompts to agents for different stages of customer engagement. 

The information surfaced through research at each of these given steps is what one uses to create their Customer Engagement Model. It revolves around the customers and understanding them. Failing to do so on your end would lead the same customers to end up being potential clients for your competitors.

Customer Engagement Model

Every business is different based on demography, product, or industry. However, the customer psyche and building an engagement model around it is necessary. Customer retention models help understand why a customer made a particular purchase. Understanding the decisions leading up to these purchases will help the business create a successful customer engagement model. The model lets your customers imply how they want to be engaged. The company must pick up on these implications through customer's buying patterns, feedbacks, customer goals, and more. 

Benefits of Post-sales Engagement

Post-sales engagement is crucial for the business's sustainability. Not only does it retain existing customers, but it also promotes healthy conversions and future upsell and cross sell opportunity. Successful engagement models ensure customer loyalty, boost sales, enhance brand awareness, and eventually give your business a competitive advantage. 

  • Increased Sales: According to statistics, 63% of marketers view engagement as customer renewals, repeat purchases, and retention. Customer engagement strategies are used to supplement this mindset and significantly impact sales revenues. Using live chat software, you can deliver interactive real-time sales and support assistance to customers.

  • Customer Loyalty: Harvard Business School says that a 5% increase in customer retention rate can increase profit by 25%-95%. Customer loyalty comes from likeability. By delivering excellent customer service, businesses can further improve customer loyalty. The more personalized the experience, the more the customer will resist your competitors, subsequently rising brand value.  

  • Branding: Customer engagement helps keep the customer well informed about your product, services, and brand. Actively engaging the customer, and providing support to further benefit from your product helps achieve customer goals. This creates room for upselling of other products or services to complement the customer's needs. Having a healthy online community with an enriched FAQ page or Knowledge base sharing valuable content on common problems creates a rich online forum for discussion. Customers will trust your brand and begin to spread the word to their peers and friends through recommendations.

  • Competitiveness: A while back, disregarding customer engagement would have meant reduced profits, but in today's competitive market space, it means giving competitors a head-start. Customers can get what they want from multiple sources. Therefore enriched customer engagement could very well be that reason as to why they choose you.

    Post-Sales Engagement

Customer engagement models must be fluid enough to accommodate the customer journey in relevance to the business. The model must bring value, measure, and integrate itself to enrich the entire customer service experience. Above all, a customer engagement model must not rule out anticipated interactions and should support automated engagement. 

Eventually, customer engagement strategies will help to engage customers better along their journey with your business. It is crucial to deliver a top-class, to-the-point experience with each interaction because customers have no time to lose. 


Author Bio:  Sweta is a passionate technical writer with experience in digital marketing. Outside work, she is a devoted Esports advocate.

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