Customer engagement 101: everything you need to know

14 min read
What do engaged customers look like, and how do they help your business? Here’s a 10-minute explainer that will have you fully versed in all things customer engagement.


What is customer engagement?

The concept of customer engagement only fully emerged in the digital era. Engagement became more prevalent and more visible as two-way communication between customer and brand developed over online channels. Engagement isn’t only digital, of course – it can also happen in person and through traditional communication channels.

But what exactly do companies and thought-leaders mean when they talk about customer engagement? Well, it varies.

Out on the web, definitions are scattered, but they serve to highlight a few different dimensions of customer engagement.

Customer.com’s definition paints CE as incremental and holistic, something made up of many small interactions, each with an influence on the whole:

“Customer engagement is the extent of the relationship a customer has with a brand. It can be strengthened – or diminished – with every interaction. From making a purchase to writing a review to joining a loyalty program, the depth of customer engagement increases and becomes more mutually beneficial the more closely a brand can connect with customers’ preferences.”

Academic Linda Hollebeek, writing in the Journal of Strategic Marketing, defines it in terms of personal investment:

“CBE is defined as ‘the level of a customer’s cognitive, emotional and behavioural investment in specific brand interactions’. Further, three key CBE themes are identified, including ‘immersion’, ‘passion’ and ‘activation’”

Amazon Web Services links engagement with loyalty, and frames it as a business-led activity:

“Customer engagement refers to the practices that organisations employ to keep users coming back to their applications. Maximising customer engagement is vital in today’s digital marketplace, where an ever-increasing number of brands are competing for a finite amount of customer attention.”

Broadly speaking, customer engagement (CE), or customer-brand engagement (CBE) is the customer’s relationship with a business. When we look at customer engagement we’re exploring the quality of that relationship – positive or negative – how customer participation occurs, and how often it happens.

For most companies, an exploration of the topic will also involve trying to understand how customer engagement relates to the success of the business in terms of sales, loyalty, and whether the customer is a detractor or promoter of the brand.

Dimensions of customer engagement could include:

  • Longevity: The length of time over which interactions are spread
  • Proactiveness: Whether a customer engages with a brand of their own accord, without prompting
  • Repetition and frequency: Whether the interactions frequent and similar, or sporadic and varied
  • Context: The situation where interactions happen, for example post-purchase, during consideration, only when there’s a promotion happening etc.
  • Volume: How much interaction takes place over the whole customer lifecycle

Customer engagement, customer satisfaction and customer experience (CX)

To understand what customer engagement is all about, we have to separate it from a few related concepts.

Customer experience (CX) vs customer engagement

CX describes everything that happens for a customer in relation to a brand, from seeing its billboard ads beside the highway to visiting the bathrooms a flagship store.

Working on CX is about putting yourself in the customer’s shoes and considering how to provide the best possible experience across all touchpoints.

Customer engagement, however, brings in the customer’s own agency and choice, not just what the brand presents to them. In CE, the customer is seen as an active participant rather than a recipient of an experience. CE explores how they react and respond, how they reach out to you, their relationship to your content and marketing, how they talk about you to others, and whether they promote or detract. Put simply – it’s a dialogue.

Customer satisfaction vs customer engagement

Customer satisfaction and customer engagement might sound like two sides of the same coin, but the overlap between them shouldn’t be taken for granted.

A satisfied customer might not ever become engaged. They could be a lifelong shopper at your hardware depot but never take part in a loyalty program, follow the brand on social media or make a complaint. Likewise, an engaged customer might make few purchases from a luxury department store, but spend hours chatting on a brand-owned forum or interacting with the company’s aspirational posts on Instagram.

So customer engagement isn’t the same as customer satisfaction. But customer satisfaction can be an outcome of customer engagement, and it can be a precursor for it too.

What does customer engagement look like?

It’s both general and selective

Customers might engage with your business at different levels. For some, it happens at the product level (for example, a new car buyer joining a Mustang owners group on Facebook). For others, it’s at the level of the brand. (Apple enthusiasts may be able to relate to this).

Engagement may be quite abstract – expressing a preference for Visa or Mastercard, for example – or highly specific, such as patronising a particular store branch in their region because it’s better managed and more welcoming than others.

It’s online and offline

It will also vary on and offline, and depending on the kind of offering a business provides. In a traditional model, where sales are discrete events and products and services are used away from the point of sale, engagement may not happen at all. In a situation where products and services may be supplied and consumed online, engagement with the brand happens as a matter of course.

It’s sometimes integrated with product use

It may in some cases be indivisible from the product or service itself. In these cases, the question is not whether or not the customer engages but how meaningful those engaged moments are.

Here are a few examples of what engagement might look like in practice.

1. Making a complaint

A dissatisfied customer reaches out to give feedback or ask for a problem to be remedied. Whether they complain in a public forum, or approach you via email, can be a telling measure of a customer’s loyalty and sentiment towards your brand. Notably, if a customer cares enough to complain, the stakes are high and there’s a valuable opportunity to close the experience gap and win their loyalty by exceeding expectations.

2. Responding to marketing with a comment on Facebook

A customer seeing an ad for a product they’ve recently bought may add a comment along the lines of “this is the thing I was telling you about Sandra!” or “bought three of these, no idea how to use them”. It’s a word-of-mouth moment that reflects positively or negatively on both the customer and the brand – a form of social proof.

3. Reviewing on a third-party site

A customer waits for hours on hold to a utilities company, and while the minutes pass, leaves a one-star review on a site like ReviewCenter or TrustPilot. In this scenario, the customer is a detractor of the brand, but unlike the social media example, they are not sharing their opinion with friends and family in their sphere of influence, but doing it relatively anonymously.

4. Participation in loyalty programs

A customer signs up for a loyalty card or app which they use to collect points on future purchases. They enjoy collecting points and achieving rewards, which becomes a secondary motivation in itself. They will choose your brand above others because they can collect points with you but not others.

5. Contributing ideas, suggestions and requests on a brand’s social spaces

A loyal customer comments on your Instagram post asking if and when you’ll be restocking a product they love. They also make contributions like “would love to see this in green!” or “can we please have a gift set with this, the purple, and the blue?”

6. Using online support and customer service

A subscriber to a SaaS platform wants to know how to use the tool to solve a specific problem. Unable to find the answers in the product’s knowledge base, she contacts customer service via live chat to ask for advice and is referred to a product specialist who answers her question. This is an example of someone engaging deeply with a service they’ve paid for, and having a better experience as a result.

Some individuals become engaged with a brand to the extent that it’s part of their lifestyle or belief system. Large and long-standing consumer brands like Disney and Coca-Cola have ‘super fans’ whose lives revolve around their attachment to the brand and their collections of products or memorabilia.

Then there are the disengaged customers. They might be positive, like the satisfied hardware store customer we described above. Or they may be negative towards your brand, for example customers of a competitor who have developed an idea of your products and services only through the lens of someone else’s products and marketing.


What does engagement mean for your business?

We know that customer engagement is broadly associated with positive business outcomes. A frequently-cited 2010 study by brand research consultants Hall & Partners found that up to two-thirds of a brand’s profits stemmed from effective consumer engagement.

But don’t take their word for it.

Top-line findings from other businesses can point you in the right direction, but to really understand what customer engagement means for your business, it’s necessary to investigate what types of engagement predict what kind of outcomes.

Before you invest in increasing customer engagement, you need to understand how it relates to your business growth. That way you can target your efforts where they are most profitable and maximise outcomes that are sustainable and positive over the long term.

Your goals might be

  • Word-of-mouth marketing
  • Brand strengthening
  • Loyalty
  • Increased sales
  • Better knowledge of your customer

You also need to know what profitable engagement looks like in your specific business, taking into account the amount of variation that’s possible and the benefits you could achieve. For example, does social media sharing go hand in hand with increased loyalty? Do customers who contact you with an issue end up more likely to repurchase after your resolution, or less?

Data is the fuel of customer engagement,” according to SAP’s Volker Hildebrand. Engagement, unlike traditional CRM, is something that happens in the moment, much like a person-to-person conversation. For this to happen, the relevant data must be instantly accessible at the moment of connection, giving the customer an effortless experience.

Three steps to smarter customer engagement

Step 1. Research

Collect that data. Know what engagement looks like in your unique business. As well as collecting operational data like loyalty program numbers, social shares, likes and comments, and support cases, find out about the context of engagement from your customer’s perspective. Explore what motivates customers to engage with you by collecting experience data from them via surveys, intercepts and other feedback channels.

Step 2. Analyse

Having explored the kinds of engagement that are happening in your business, the next step is to relate them to business outcomes such as sales, NPS, CSAT and customer effort scores.

Step 3. Iterate and innovate

Now you’re ready to put your findings into action and close the loop between action, measurement and results.

Customer engagement strategies

The kind of strategy you choose will depend on your research findings, your resources and the kind of industry you’re in. It’s also important to consider engagement on a channel-by-channel basis. There’s a big difference between online and offline engagement, for example. How your customer engages also has implications for how you nurture the relationship.

An unengaged but positive customer might respond to invitations to engage that focus on price, value and ease – ‘join our loyalty program and save 5% on these regular purchases’. A customer who is already heavily engaged could become part of a brand ambassadorship program where they are rewarded for recruiting a friend.

Here are a few ideas for boosting engagement to inspire your planning.

1. Build engagement opportunities into your UX and CX

Something as simple as a thumbs up / thumbs down button on the bottom of a self-service support article can boost engagement and make a customer feel more involved and listened to.

2. Start a loyalty program if you don’t already have one

From fully-fledged tiered points systems to a humble 10-coffee stamp card, loyalty programs are a proven mechanism for boosting retention.

3. Invite feedback

Let customers know you care what they think and provide plenty of opportunities to be heard. Online, you could use site intercepts, scoring or feedback buttons to gather contextual experience data. Offline? Put a feedback box and some cards by the till, encourage staff to ask customers about their experience, or add a feedback email address to till receipts and promotional flyers.

4. Model engaged behaviours

Showcase existing engagements with customers in your marketing, using storytelling and case studies to illustrate how other customers have contributed and participated.

Other Customer Feedback Resources:

Ready to start improving your customer experience?