Blogs
Jul 8, 2025
Customer engagement marketing is the bridge between customer acquisition and retention. This bridge is essential to keep your business on the run. In fact, Gallup’s research shows that customers who are fully engaged represent a 23% higher share in relationship growth, revenue, and profitability.
This statistic relays the importance of customer engagement for your business. Prioritizing it can lower customer attrition and give you the lever to keep your brand on top of your customers’ minds.
In this guide, I’ll unravel what exactly customer engagement is and how your business could benefit from it. We’ll also delve into some examples of customer engagement, types, and strategies to learn how to adopt the same in your business model.
Lastly, we’ll go over the tools that will help you augment engagement, and explore some metrics to measure how well your customer engagement strategy is working out.
Let’s get started then!
What is customer engagement?
Customer engagement can mean different things for various businesses. For instance, to an eCommerce store, adding a product to the cart can be considered engagement. Alternatively, to a brick-and-mortar store, footfall can mean engagement. Or, participation in customer loyalty programs, high NPS scores can all mean engagement.
All this goes on to show that based on your business goal, the definition of customer engagement can differ.
According to Wikipedia, customer engagement is defined as the interaction between a customer and a business through various channels. Clarabridge explains customer engagement as the emotional connection between a customer and a business. The Smile team however describes customer engagement as the degree and depth of brand-focused interactions a customer chooses to perform.
Collating all this information, here at Ingage, we have the following definition of customer engagement.
Customer engagement is the positive emotional bond flourishing out of the brand and customer interaction across varied mediums in the purchase journey.
What are the benefits of customer engagement?
Your brand’s big picture goal would be to increase sales. By engaging your customers you can position your business for long-term success and improve your Return on Investment (ROI).
Following are the various benefits that a customer engagement strategy can fetch you and eventually lead you to increased sales.
1. Opens opportunities for retention and acquisition
When the customer experience with your brand promises instant gratification, your existing customers wouldn’t want to leave you. This will help you increase customer retention.
Consequently, you can implore your brand ambassadors to participate in referral programs and expand your customer base through this cost-effective means of customer acquisition.
2. Improves customer relationships
Customer relations have been the backbone of traditional storefront businesses forever. Unfortunately, with the onset of the digital age, it has just become harder. Thanks to the advancement of technology, there’s a great possibility to render a humane touch in all automated processes.
As a case in point, a small, local shop owner might know what a customer regularly buys. He would ensure to keep the products in stock, give recommendations, and thus engage the customer in the sales process.
However, the same cannot be said for an international retail brand. Opportunities for engagement remain questionable without the help of technologies like Artificial Intelligence and Machine Learning. These tech stacks would render better engagement during the purchase journey, with people who also bought, and AI-based product recommendations, cart abandonment emails, restock reminders, and others.
Such efforts will improve engagement at the bottom of the sales funnel.
3. Renders unique shopping experience
Employing a customer engagement strategy such as gamification, loyalty programs, and others will give a unique and positive customer experience. Since these shopping experiences are bound to happen only at your store, you can ensure engaged customers continue shopping with you.
If you have a brick-and-mortar store, this can work in your favor by ensuring more footfalls. Similar engagement marketing strategies deployed for your online stores can trigger interest in your customers and look forward to browsing your products and buying from you.
Types of customer engagement
The way a particular customer engages with your brand can be different. Not all customers are rigorous buyers. Not all customers are socially vocal. Not all customers participate in the events you hold.
So you need to understand that different business results are the by-products of different types of customer engagement goals. While we could go in-depth on the types of customer engagement, below we cover the three most common ones.
1. Emotional engagement
As human beings, touching the emotional chord is vital when most business processes are robotic and automated. So, it’s all about making your customers feel for you.
TOMS’ Shoes has done an excellent job in this regard. For every pair of shoes bought by their customers, TOMS offers a pair to a child in need of one. This way, customers know that their money is not just a profit for the footwear company but also an investment to do good to the underprivileged.
As you’ve noticed, here, transactional action is driven by emotional engagement. If you want to enhance emotional engagement, align your company’s values with that of your customers’.
2. Contextual engagement
Understanding customer behavior in a given situation can help you develop contextual engagement. Let’s say that in the previous purchase your customer reached the next loyalty tier. At this point, you’d do well in contextual engagement by sending a coupon that they could redeem in the next purchase.
Alternatively, let’s say that a customer keeps surfing your online store but adds nothing to the cart. Here, a contextual email showing products similar to what the customer browsed can increase engagement.
3. Social engagement
If you can engage customers, emotionally and contextually, you should see results in the form of social engagement. It could be likes or comments or re-shares of your posts. It could also be flaunting a good experience with your brand.
So, even without their knowledge, your customers do influencer marketing and convince their network to try your products and services. And how do you get here? By nailing emotional and contextual engagement.
Omnichannel customer engagement marketing
Customers do not take a linear approach while interacting with your brand. Years ago, the customer touchpoints could have included SMS marketing, customer support center, and in-store transaction. That’s all passé.
With the advent of the digital era, the customer touchpoint involved in every phase of the purchase journey is just plenty. And ensuring a seamless transition throughout the process remains a challenge.
While as much as we talk of customer engagement marketing, let’s, therefore, focus on omnichannel customer engagement so that your brand can be present where your customers are and cater to their needs in an orderly fashion.
In the retail context, generally, every customer undergoes a five-staged purchase journey as below:
Exploration
Consideration
Transaction
Experience
Retention
Note that the aforementioned pointers may not be universally applicable. You might still have to prop customer journey stages and customize a journey map specific to your brand or business.
Having said that, let’s delve into the prevalent retail customer journey map.
1. Exploration
In this phase, a prospective customer understands that he needs a product. He would research the various aspects of the product such as its potential vendors, cost, features, and alternatives.
The research process need not be self-sufficient but could also be swayed by a referral recommendation.
Speaking from the customer’s shoes, it’s true we’ve reached a stage where we’ve turned quite cold to cold marketing. I won’t believe it if you tell me that you are better than brand X unless I approve it for myself or have the word of a friend. Therefore, one idea to effectively engage prospects and leads in the exploration phase is to launch a referral program.
Another alternative is to encourage leads to sign up for your newsletter (in the case of online business) in return for a 10% discount on the first purchase. This way, you are increasing your chances of getting filtered to the customer’s consideration bucket.
2. Consideration
Post the exploration and research, the customer would analyze the information he has gathered. He would narrow down his options in the consideration phase. So, the impact on customer engagement that a retail business manages to cast during the exploration phase would decide their possibility of falling into the consideration bracket.
If the qualified lead seems to need a nudge to make the first purchase, ensure it to be something worthwhile and engaging. It could be 25% off on the first purchase, or accruing 100 loyalty points, or free shipping.
3. Transaction
In this phase, the brand has realized customer acquisition. Here’s where the customer makes a purchase and pays for the same. While it may look like a give and take stage, there’s so much to this transaction phase and that is what determines the passage into the next phase of the customer journey.
There are various ways to spice up the transaction phase. Instead of the customer shuffling through shelves and landing at the counter for checkout, try gamifying the shopping experience.
Also, introduce multiple payment gateways and methods such as QR scanning, contactless payments, and others, so that customers don’t suffer long queues.
4. Experience
Of course, this is the chance for customers to experience the quality of the product and service first-hand. Lived up to customer expectations? You’re game on to take the customer to the next stage of the buyer journey. No? That’s going to be a loss.
5. Retention
After establishing the rapport with the customer, it’s now your turn to continue the relationship and build it stronger. The longevity of this brand-consumer relationship would portray your ability to retain and benefit more revenue from existing customers.
Therefore, the omnichannel customer engagement marketing calls not only to deliver the right experience in terms of deliverables and processes but also to sustain those efforts and exceed expectations. This can foster loyal relationships and eventually a better customer lifetime value (CLTV).
Customer engagement strategy
Regardless of the size of your business, you must have a solid customer engagement marketing strategy. Better yet, if you could segment your customer base as loyal customers, active customers, lifetime customers, newbies, at-risk customers, and so on, to curate unique engagement strategies for each of these segments.
Here are some effective customer engagement strategies that work fairly well for all types of customers.
1. Deliver personalized experiences
Personalization is rising to be one of the most famous customer engagement strategies. It makes sense, ‘cause you and I want products and services that are tailored to our needs.
There are many ways to render a personalized experience. Here are a few ideas:
Addressing customers by their name while SMS/WhatsApp/email marketing.
Using location-based intelligence to promote products and services.
Leveraging product recommendation engines to suggest products based on a customer’s purchase or search history.
2. Gamify shopping experiences
While it’s practically not feasible to gamify the shopping throughout, you can still allocate a specific day of every week or every month to encourage some fun while customers shop with you. This effective customer engagement strategy will lead to greater customer satisfaction while scuttling through shelves with the shopping cart.
For gamification, you can try the scavenger hunt. Here you can display a particular product for sale, and say that the first 10 customers to find it would get it at 50% off.
Alternatively, you can try sweepstakes, giveaways, scratch, and win games, and others. In a gist, it calls you to get creative and tweak the mundane shopping experience into something interesting.
3. Create content that resonates with your audience
If you want your customers to understand and connect with your brand, creating content that matters to existing and potential customers is crucial. Irrespective of whether it is micro-content, a blog article, a recipe, or instructional video, as long as you create content that your customers are interested in, you can ensure positive experiences.
I love how Hershey’s nails it with relevant content. While going grocery shopping, I might buy some of its delicacies. But what about days when I’m not munching on Hershey’s chocolates? Here’s where the confectionary brand engages me by sending some recipes to try out.
So even if I’m not planning to run to the grocer’s, a mail content such as below simply nudges me to get the ingredients and start baking. This is how you make customers purchase your products even when that’s not on their to-do list.
Customer engagement metrics
Numerous metrics are attributed to measuring customer engagement. However, based on our experience in the retail industry, at Ingage, we look mainly at measuring and improving the four following key metrics:
Customer repeat rate
Recency index
NPS
Loyalty transaction percentage
1. Customer repeat rate
The customer repeat rate is defined as the ratio of customers who have purchased more than once to the total number of customers. Naturally, the higher your repeat rate is, the better your engagement level.
To improve the customer repeat rate, research the inter-purchase time of your customers and launch trigger-based marketing campaigns across those timeframes. You can design lifecycle campaigns and see an uptick in repeat rate as high as 20%.
2. Recency index
You can use the recency index to measure how active your customer base is with your brand. You can calculate this as the ratio between the number of customers who purchased from you in the last three months to the total number of customers.
A lower index would denote the least level of engagement. On the other hand, a higher recency index can mean either a greatly active customer base or a high proportion of customer acquisition.
Running reactivation and trigger campaigns are a great way to reactivate your inactive community.
3. Net promoter score
Net Promoter Score (NPS) has been around the retail industry for a long time. We generally ask respondents specific questions to which they rate on a scale of 1 to 10, with the latter being the highest score.
You can determine NPS by reducing the percentage of detractors from the percentage of promoters. Note that the respondents to the linear scale rating are divided into promoters (highly engaged), passives (neutral), and detractors (least engaged).
While measuring NPS, first benchmark your business against your competition. Your goal obviously then is to have a score that’s better than your competitor’s.
4. Loyalty transaction percentage
Be it a brick-and-mortar retailer or an eCommerce player, loyalty programs are powerful levers to build and maintain customer loyalty.
If you have a loyalty program, you ought to measure the loyalty transaction percentage to determine the engagement level. Mathematically, you can calculate this by rationing the number of loyalty transactions to the total number of transactions and multiplying it by 100.
As you would have guessed, the higher the number, so well is the engagement level. If you have a dedicated loyalty application, then push notifications should do the trick of reminding customers of their loyalty points and how much more they should accrue to unlock their rewards. Even otherwise, a gentle reminder from the cashier in your physical store can go a long way to ensuring loyalty points accrual and redemption.
Customer engagement tools
When we looked at the customer engagement examples, I related the importance of having the right tools.
Even if you are not in a position to invest heavily in an immersive digital experience, you can surely leverage the following tools to connect with your customers just to say hi and keep them in the loop of what’s happening in your business and how your products and services could benefit them.
1. Email marketing
Email marketing is a great way to reach your customers in a place where they visit every day - their inbox. Be it to announce to your customer base a special offer or the arrival of a new product or just share how you’ve been involved in social works, email is a great channel to pass on some quality content.
While Gmail isn’t going to be of much help here, you can rely on the following email marketing tools. They are cost-effective and help you schedule emails, create amazing HTML templates, send bulk emails to customer contact, collect leads, and so much more.
Here are some email marketing tools worth your consideration:
2. Social media marketing
Social media marketing has revolutionized the way businesses interact with their target audience. With social commerce in the wake, this is yet another channel for you to drive sales.
To a new audience, posting regularly with the right hashtags is going to give you greater brand recognition. If you want, you can even run contests on social platforms and engage your existing followers.
Social listening is key to brand reputation management. This will also give you a chance to listen to the conversations your customers have about you and will help you address customer issues.
Here are some social media tools you can use:
3. Loyalty marketing
Loyalty marketing is a wonderful strategy to encourage your customers to do repeat business with your brand. And of course, you’d have to incentivize your customers to do so. The whole point of rewarding your customers is to appreciate the value they bring to you by shopping with you regularly.
You can run a plain points program or a much complex tiered loyalty program or any other type of loyalty program out there.
4. Referral marketing
Customer acquisition is hard and is too costly. But for any business to thrive there has to be a good ratio between customer retention and acquisition. One means of cost-effective acquisition is referral marketing.
This customer engagement campaign will encourage your passionate customers and brand advocates to directly refer their friends and family to your business. And research has it that people not only look for referrals but act on them.
5. Customer feedback and survey
You could be investing much time, money, and energy in engaging your customers. But never assume that what you do is what your customers want.
Feel free to ask your customers how you’re doing through customer surveys. Keep a constant check on online reviews, address grievances and continue to do the things they appreciate the most. And that’s the whole point of feedback and surveys, to learn from your mistakes and do better the next time.
Customer engagement platform
The above customer engagement tools can only get you so far. But they are handy for a start. Nonetheless, as you advance into your customer engagement journey, you would find yourself in a spot wherein you deem it less productive to be working with disparate tools. This is exactly the stage you would want to level up by investing in a customer engagement platform.
Important features of a retail customer engagement platform
A customer engagement platform is software that will help you understand, engage, and measure the customer journey throughout their lifetime with your company.
Benefits of customer engagement platform
While the cost of a customer engagement platform is sure to be higher than the disparate tools you could use, the benefits and the return on investment are all worth it, as discussed below.
Reach out to your customers and serve them wherever they are.
Improved accuracy of marketing and sales, owing to the data collection and analysis.
Real-time in-store and online customer engagement.
Provide better customer service and support.
Render a consistent experience to all customers, from anywhere in the globe, across all customer communication channels.
Take your customer engagement up a notch
Make customer engagement the heart of your business. It will help you reduce customer churn and increase the lifetime value of your customers. There’s no shortcut to lead a profitable business without doing the hard work to make happier customers.
It’s your opportune moment to put the theory into practice.
