“I’ve heard the word customer engagement, but I don’t really understand it because there are so many similar words.”
Customer engagement is a term that means the relationship of trust that exists between a company and its customers.
Customers who have a high degree of trust (engagement) in products and services will actively purchase and use brands and products, and spread their value to those around them.
Therefore, increasing customer engagement can be expected to improve competitiveness in the market, repeat rate, and promotion effect.
In this article, we will explain what customer engagement means, how it differs from similar terms, and the benefits that can be obtained by increasing customer engagement. On top of that, we will also explain how to visualize customer engagement and tips for increasing engagement.
Customer engagement is the relationship of trust between a company and its customers.
Customer engagement is the relationship of trust between a company and its customers.
If the customer trusts the company and its products and services, there is a high possibility that they will buy your company’s product without looking at the similar products of other companies.
Furthermore, if the customer not only purchases but also introduces it to others, it will lead to the acquisition of new customers, and it will also increase the company’s sales and profits.
As such, customer engagement is something that every business should not overlook.
Differences between customer engagement, customer satisfaction, and loyalty
The table below summarizes the meaning of three terms that are often confused: “customer engagement,” “customer satisfaction,” and “loyalty.”
| name | meaning |
| customer engagement | Relationship of trust between company and customer |
| customer satisfaction | The customer’s own subjectivity is included in how satisfied the customer is with the company, product, or service. |
| royalty | A state in which a customer is attached to and trusts a company, product, or service |
Engagement means the strength of a relationship of trust between a company and its customers. On the other hand, loyalty is a state in which a company is superior in position and customers trust and loyal to it.
For example, if engagement is defined as both husband and wife working and each other taking the initiative, loyalty can be thought of as a relationship similar to that of husband and Kanpaku.
Customer satisfaction is an evaluation of how satisfied a customer is with a product or service.
However, even if the relationship of trust is strong, there may be dissatisfaction points depending on the product or service.
Customer engagement is a metric to win customer trust and differentiate from competitors
Customer engagement is necessary to differentiate yourself from your competitors and earn their trust.
If you can get customer engagement, your products and services will be more likely to be selected even if your competitors have similar products.
For example, a manufacturer that can be immediately associated with something, such as “when you think of XX”, has solid customer engagement and is outperforming the competition.
In addition, products and services are susceptible to the trends and trends of the time. However, if you can get customer engagement here, you can expect stable sales in the long term.
In this way, customer engagement is necessary in order to be recognized and differentiated from competitors even in an era where things are overflowing.
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Benefits of Enhancing Customer Engagement
There are three main benefits of increasing customer engagement. This chapter describes its advantages.
Increased competitiveness and increased market share
Engaging your customers will encourage them to choose your products and services. As a result, competitiveness will increase, and as a result, market share will increase.
The reason why increasing market share is an advantage is that it gives us an advantage over our competitors. You can differentiate yourself from your competitors and get stable sales.
Increased repeat rate and decreased churn rate
Increasing customer engagement increases repeat rates. This is because they trust us to continue to use our products and services.
On the other hand, the churn rate will decrease. Customers will be less likely to move to competitors because they have placed their trust in us.
Promotion effect increases as customers disseminate information
When a customer has a positive impression of a company, product or service, they may tell others about the goodness of the company or send it out through word of mouth or SNS.
In particular, word of mouth and SNS spread information to many people, so it has a great promotional effect.
Therefore, increasing customer engagement should never be overlooked.
How to measure customer engagement
Customer engagement can be measured, and knowing how to measure it can give you an idea of how much trust a company has with its customers.
This chapter describes how to measure customer engagement.
NPS can quantify trust and attachment to companies
Not all companies use NPS.
However, it can be seen from the above table that companies that have already introduced CS (Customer Satisfaction Survey) often feel the need to increase customer engagement more strongly than companies that have introduced CS (Customer Satisfaction Survey).
Get a service or product recommendation rating on a scale of 0 to 10
NPS is measured by asking customers to rate the degree of recommendation of a product or service on a scale of 0 to 10.
The degree of recommendation at this time is divided into “promoters”, “passives”, and “detractors”.
Promoters are more likely to repurchase or recommend to others, while detractors are more likely to receive critical word of mouth, which makes new customers hesitate to purchase.
Not only will it attract new customers, but it will also motivate employees.
Neutrals are neither positive nor negative, but they may move to competitors if something triggers them.
Calculate the NPS value based on the evaluation results
Based on the above evaluation results, the NPS value is calculated by subtracting the percentage of detractors from the percentage of promoters among all respondents.
For example, let’s say you want 10 people to respond. If 2 of them are promoters and 5 are detractors, then 20-50 is -30. The score increases when there are fewer detractors than promoters.
In practice, it is desirable to have statistics on 400 or more samples. In this case, the error is ±5%, but if you want to keep it within ±2%, you need more than 2000 samples.
Manage the process of improving customer engagement by setting KPIs
KPI is an abbreviation of “Key Performance Indicator”, meaning “important performance indicator”. In other words, it is a quantified target set by the company.
It is originally an index to measure customer loyalty, but many companies use it to acquire customer engagement.
KPI is like an intermediate goal, but beyond that there is a final goal called KGI. When setting, the form is to decide the KPI after deciding the KGI.
Examples of KPIs you might want to set as a measure of customer engagement
KPIs differ in the items to be set for each target and company. In measuring customer engagement, it is necessary to set clear numerical values so that anyone can see whether or not they have achieved it.
Therefore, I will introduce three examples of KPIs that I would like to set for measurement.
customer satisfaction
Customer satisfaction, as the name suggests, is a measure of how satisfied a customer is.
This is the same as getting an evaluation at the stage introduced in KPS, you can find out the customer’s condition by conducting a questionnaire etc.
If the number of customer satisfaction increases, it means that they are satisfied with the company, products and services, and it is thought that customer engagement is also increasing.
churn rate
When customer engagement is low, churn is high.
Customers churn for a variety of reasons, from not getting the results they wanted to being more attractive to the competition.
If companies can quickly follow up on these causes, customer concerns can be resolved and customer engagement will increase.
As customer engagement increases, churn rate naturally decreases.
repeat rate
If the customer is satisfied with the product or service, the repeat rate is high, but if there is even a little dissatisfaction, the repeat rate will be extremely low.
Customer engagement is key here. If you can understand what your customers are dissatisfied with and make improvements, your customer engagement may increase.
Higher customer engagement means higher repeat rates.
Three points to be aware of to increase customer engagement
You understand the importance of increasing customer engagement, but you may not know how to actually do it.
Here are three points to keep in mind. Be aware of the points and use them to improve customer engagement.
Personalize to improve customer experience
In order to improve customer engagement, it is necessary to aim to provide a suitable customer experience at various points of contact with customers.
Contact points with customers are not limited to stores and EC sites, but all processes such as TV commercials, advertisements, SNS, product delivery and subsequent follow-up and maintenance, which provide information on products and services, become customer experiences and are involved in evaluations. To go.
So personalize and aim to improve the customer experience.
Create a customer journey map by centralizing the system
A customer journey map can help improve customer engagement.
This visualizes the customer’s behavior and thoughts at each point of contact by likening the customer’s purchasing path to a journey.
By creating a customer journey map, you can analyze customer behavior and psychology in chronological order. You can find issues and things to work on for companies, products and services from the customer’s point of view.
Therefore, let’s unify the system from the DX perspective, create a customer journey map, and understand the customer’s purchasing lead.
Implement IT tools to digitize customer behavior
Customer behavior must be digitized to improve customer engagement.
At the beginning of the purchasing process, both companies and customers gather information by searching the Internet. On the Internet, companies use web advertisements and SNS advertisements as corporate PR.
These ads track and analyze customer behavioral data. By analyzing the process leading to purchase based on customer data, we determine how to improve customer engagement.
And for digitization, we recommend using IT tools. Digitize and analyze customer behavior with our tools.
Summary
Customer engagement is a term that describes the relationship of trust between a company and its customers.
If this relationship of trust is firmly established, it will be possible to overcome the competition and obtain results for the company, such as expanding market share and increasing the repeat rate.
Improving customer engagement should be considered the key to achieving results.
In order to improve, let’s grasp the current situation such as customer’s behavior, thoughts, impressions, etc., and analyze what your company can improve and what you can do to beat the competition and gain trust.
