Guide
What is customer engagement? Definition, importance, examples
Customer engagement refers to the ongoing relationship between a brand and consumer across online and offline channels. Driving engagement with customers across marketing channels can increase brand loyalty and help drive repeat purchases.
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What is customer engagement?
Customer engagement is the way brands actively build an ongoing relationship with their customers through meaningful interactions along the customer journey. By cultivating this relationship, brands can foster lasting loyalty and excitement among customers. Customer engagement refers to the quality of the connection between brands and customers—the relevance of the message and the inspiration it sparks in customers to take action. This could take the form of a customer clicking through an ad to shop more from a brand, or subscribing to a newsletter, or following on social media. Customer engagement like this promotes more long-term brand love and loyalty.
Why is customer engagement important?
Customer engagement is important because it can improve customer satisfaction, increase brand loyalty, and reduce churn rates. Strong customer engagement means that a brand is reaching audiences with relevant and meaningful ads that they are more likely to interact with.
According to a 2021 Amazon Ads and Kantar survey of 1,000 US consumers, 88% of respondents report engaging with ads relevant to their interests, and 89% say they’ve interacted with ads that reflect their life stage. Consumers are also apt to engage with ads that meet a need they have. This customer experience is the strongest driver of ad interaction, surpassing whether the ad is funny, entertaining, or inspiring.
Customer engagement at every step of the funnel
There are a number of customer engagement strategies brands can employ across marketing funnel, from awareness to consideration, to decision, then loyalty. Here is how brands can foster customer engagement at every step of the marketing funnel with new and existing customers:
Awareness
Brand awareness is familiarity with a brand, which could include knowledge of its name, messaging, tone and style, values, and culture. To drive awareness, brands want to get in front of consumers where they are. This could include television—both linear and connected TV—digital advertising, audio ads, social media campaigns, content marketing, and more. Here is where brands can focus on customer engagement early in the shopping journey. 84% percent of shoppers begin their online research on digital channels that aren’t a brand’s owned website, so these touchpoints have become increasingly important.1
Conversion
The goal of the conversion stage is to encourage shoppers to purchase a product or service because they believe the brand they’ve chosen is the right solution to their problem or meets their need. This phase is where a well-detailed website product page is important, as well as creating an exceptional customer service experience to inspire customer confidence in their buying decisions. By creating a positive experience with quality customer service, brands can help improve conversion rates and cultivate better customer engagement through the conversion stage of the funnel.
Loyalty
Brands can foster loyalty and customer retention by providing a seamless purchase experience and delivering a quality product or service. By following up and nurturing connections with consumers after purchase, brands can stay top of mind for shoppers. On average, it costs a brand five times more to acquire a new customer than retain an existing one,2 which is why some marketers also call this phase the “engagement” stage.
To build loyalty, it’s important to continue engaging with customers who have invested in your brand’s products or services. Effective engagement marketing, such as email nurture campaigns, social media activations, and loyalty programs can be impactful when it comes to building brand loyalty with customers. At the end of this stage, the goal is that you’ve earned loyal, satisfied customers who become brand advocates and lifelong customers.
Building a customer engagement marketing strategy
Better understand your audience
Having a multi-dimensional understanding of your audience is key to crafting messaging and creative that resonates. Understand who your audience is, beyond demographics, and how they engage with your product. This will help you know and understand the best way to increase your brand’s customer engagement.
Offer value at every interaction
It can be important for brands to be creative with their ad formats and offer elevated experiences to delight and inspire customers. One recent Amazon Ads, Omnicom Media Group, and Latitude study showed that 55% of consumers prefer ads they can interact with by following links to buy products directly, playing along at home, and entering sweepstakes.3 And 55% of consumers said they want to see brands integrate into the content they’re watching in innovative ways.4 This shows that audiences are open to new and creative ways that brands integrate their messaging into content.
Measure and optimize
Use data and analytics to find what’s working and what’s not, and develop creative ways to iterate accordingly.
Examples of customer engagement
Case Study
The Honest Company uses live streaming and more to engage customers
The Honest Company began selling and advertising on Amazon in 2017. Since then, it has used customer-centric advertising strategies to engage with audiences. To reach new audiences and build brand awareness, it used a combination of display ads with Amazon DSP and Amazon Streaming TV ads. With Amazon DSP, the brand was able to reach exclusive Amazon audiences on Amazon-owned sites and apps, as well as on third-party sites and apps. To complement this, The Honest Company used Sponsored Products to reach high-intent shoppers looking for specific products in its category, and offered customers coupons on its product detail pages to help drive purchases. The Honest Company also hosted an Amazon Live livestream with founder Jessica Alba, enabling her to engage with customers directly, share stories about the brand, and infuse product information in an entertaining live video segment.
With this strategy, the company saw a fivefold increase in detail page views from Streaming TV ad impressions, a 39% higher return on ad spend, and quarter-over-quarter increases in reach.5
Case Study
McDelivery drives engagement and shifts brand perception for McDonald’s
McDelivery is McDonald’s food delivery service that brings customers’ favorite menu items directly to their front door. McDelivery launched in Canada in 2017 and quickly became a top business priority for McDonald’s when restaurants had to close indoor dining in 2020. The brand, creative, and media teams worked together with Amazon Advertising to develop “McDelivery and a Movie," creating custom McDelivery “hubs” on Amazon.ca and Fire TV. The hubs featured a curated list of movies that customers could watch on family movie night, as well as a shoppable carousel of movie night accessories like popcorn bowls and pajamas. Traffic-driving display banners and online video creative were developed specifically for this campaign and ran across Amazon.ca, IMDb, Twitch, and Thursday Night Football.
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1 eMarketer, Oct 2020 - “Where do US consumers begin their product searches?”
2 Invesp Consulting, Customer Acquisition vs. Retention Costs – Statistics and Trends, Nov 2020.
3 Latitude, “The New Ad Value Exchange,” Amazon Ads and OMG, 2021, US.
4 Latitude, “The New Ad Value Exchange,” Amazon Ads and OMG, 2021, US.
5 Amazon Internal, 2019
6 Amazon Internal, 2020