The digital age has ushered in new opportunities for businesses to engage their customers. Modern customers are eager for this engagement, but only if it is offered in a relevant, personalized manner. Correctly done, customer engagement can help convert first-time buyers, retain current customers and improve branding.
Despite the benefits that businesses can receive, few companies reward customers for their engagement. Most businesses opt for loyalty rewards that are based on how much the customer spends. By limiting rewards in this manner, businesses are missing opportunities to build and nurture customer relationships during the customer's purchase journey.
What is an Engaged Customer?
Not too many years ago, customers had limited options for interacting with your company. They could write you a letter, call you on the phone or send you an email. Then the number of available channels increased. Now there are mobile apps, forums, consumer rating services, social media sites, in-store kiosks, wearable tech and a host of connected devices in their homes in addition to the traditional channels.
Engaged customers are interacting with your company in various manners. They may be writing an online review of your products or services, liking your Facebook posts, opting-in to receive emails or texts from you regarding special promotions, downloading your online coupons, signing up for a gift registry online or from a kiosk or clicking on the links you include in your marketing emails. In other words, these people are already engaging with you — even if they have yet to make a purchase — and they deserve to be rewarded in some manner.
Why Offer Rewards for Customer Engagement?
Customer engagement is a mutually beneficial process when it is handled correctly. Your customers want something in return for whatever actions they are taking that could help your business. If they give you their email address, they expect to receive access to an informative download, discount coupons or advance notice of sales. If they "like" your Facebook page, they might enjoy having their name appear on their friends' pages as someone who likes your company. If you ask for their feedback, they want to feel that you value their opinion.
From the company's point of view, customer engagement can provide a number of benefits.
- Feedback you receive from customers can help you streamline processes and improve your operations, which in turn can help you attract more customers.
- People tend to trust the opinions of their peers more than they trust advertising. When customers post reviews about your brand, your product or your service, you receive publicity that is free as well as valuable for encouraging other shoppers to reward you with their business.
- Customer engagement and loyalty go together like a key and a lock. Engaged customers are more likely to become loyal and remain so over the long term.
- It is normally easier to convert first-time buyers who have been referred by friend or family member. Engaged customers tend to offer such referrals more often that those who are disengaged.
Suggestions for Rewarding Customer Engagement
Monetary incentives are almost always appreciated, whether they are in the form of discount coupons, rebates or free items. However, there are many ways that you can show engaged customers how much you appreciate them.
- People like receiving some type of recognition that makes them stand out. Consider allowing engaged customers the opportunity to earn "badges" or "awards" that are based on their activities. For example, give them a free "bronze" badge for writing three different reviews on your website, or award a "diamond" badge based on the time they have subscribed to your news feeds.
- Remember their birthdays if you have that information on file. A simple email wishing them a happy birthday can be sufficient, or you could offer them a special deal that is only valid on their birthdays.
- Treat engaged customers like VIPs. Give them access to a special area, such as videos that you have selected "especially for them." Offer exclusive sales, extended features or free upgrades.
Customer loyalty programs have their place in your marketing efforts. However, they are often "too little, too late." Rewarding your most engaged customers can help you forge long-term relationships that can provide tangible benefits for your company.