Globally, the average customer churn rate is about 35% per year (though it does vary by market). Customer churn can be an essential indicator of a company’s ability to create and maintain long-term customer relationships. It can also be an important indicator of how well a company is doing in terms of customer engagement. Globally, the average customer churn rate is about 35% per year (though it does vary by market).
Customer engagement is crucial to any company’s strategy and is the key to purchases and loyalty. Positive customer engagement affects purchases and loyalty in many ways, and if you’re not doing it right, it can negatively affect your overall revenue.
If you think you’re missing a crucial part of your customer engagement strategy, then you need to start from the beginning and take a moment to understand the true importance of customer engagement and how it can impact your company’s bottom line.
- While customer engagement and customer experience are two different things, they are linked and work together to help increase purchases and brand loyalty.
- Customer engagement helps consumers feel emotionally connected to brands, increasing purchases and overall loyalty.
- There is an 80% increase in revenue for companies focusing on improving their customers’ experience.
Customer Engagement vs. Customer Experience
Customer engagement has been defined in several ways, but at its core, it is about creating an emotional connection between a customer and a brand. This emotional connection leads to increased loyalty and, ultimately, revenue.
There are several ways to increase customer engagement, but many companies focus on improving the customer experience. The customer experience is the totality of a customer’s interactions with a company, from the first time they visit the website to the post-purchase follow-up.
These two concepts are linked, as improving the customer experience will increase overall customer engagement. Approximately 73% of consumers state that customer experience helps to drive their purchasing decisions. Therefore, companies must focus on creating a positive customer experience that encourages customers to continue engaging with their brand and become brand loyalists.
How Does Positive Customer Engagement Affect Purchase and Loyalty?
Customer engagement is a vital component when you consider the purchasing strategies and brand loyalty that your business is aiming for. Companies that can develop and maintain a positive customer engagement strategy will be in a better position to achieve their business objectives.
Here are some of the ways in which customer engagement can help to drive sales and increase brand loyalty:
Builds a Sense of Trust
A key component of customer engagement is developing trust between the customer and the company. When customers feel they can trust a company, they are more likely to do business with it and remain loyal to the brand.
A study by PwC showed that approximately 73% of business leaders believe that having a trust-based connection with customers is a key driver of loyalty. At the same time, 55% stated that trust helps grow their customer base, and 57% said trust is vital for revenue growth.
Building trust between your company and your customer can be done in several ways. However, listening to your customers is one of the most effective ways to build trust. Reviews and testimonials from past customers can help you to understand what your customers want and how you can better serve them.
With 93% of consumers admitting to reading online reviews before making a purchase decision, and online reviews influencing approximately 67.7% of purchasing decisions, it is vital to engage with your customers and reply to their reviews and comments. Engaging with them will reassure consumers that their concerns are being heard and that your company is committed to providing a positive customer experience.
Creates an Emotional Connection
Emotional connections are essential for customers because they lead to purchases and long-term loyalty. If customers feel emotionally connected to a brand, they are much more likely to continue doing business with it and recommend it to others.
Research shows that 70% of emotionally engaged consumers spend two times (or more) on a brand they are loyal to. These increased sales result from the connection they feel with that brand and the positive emotions they experience.
Personalized Communications Improve Customer Interactions
A study by Twilio Segment reported that 62% of customers would stop doing business (and drop loyalty) with brands that deliver an impersonal experience. Customers expect a personalized experience from brands.
Without it, they are likely to feel as though they are simply a number and their questions, comments, or concerns are just an afterthought. Taking the time to reply directly to each customer (such as using the reply function on Facebook to reply directly to an individual) will reassure them that their concerns are being heard and that you care about them as a customer.
Regular Customer Engagement Draws in More Repeat Customers
Customer engagement doesn’t just stop at the purchase. It’s crucial to continue engaging with customers even after they’ve made a purchase. Regularly engaging with customers helps to strengthen the emotional connection that you’ve already established.
Nurturing your existing relationships will help your customers feel they are getting more than the product or service they initially paid for, encouraging them to return for more. Even better? Research shows that repeat customers tend to spend about 7 times more than a single-time or new customer.
A Good Customer Experience Brings in Customer Referrals
Customer engagement is the key to creating a positive customer experience. It’s a big deal because customers are far more likely to share their positive experiences with their friends and family than they are to share their negative experiences.
Once your brand has established a positive reputation, customers are far more likely to refer your brand to others.
Improve Your Customer Engagement With Insights From Televerde
Regular customer engagement is important to build trust and an emotional connection with your brand. Insights from customer engagement can help you understand what your customers want and how you can better serve them.
Here at Televerde, we understand how vital monitoring these metrics is to your business. From strategic industry insights to performance-based customer journey analytics – our team is committed to helping you understand your customers and how they interact with your brand.
Curious how we can help your brand better understand customer engagement? Contact our team today.