Blog Article

What is Customer Engagement: A Guide For Canadian Business Owners

Author: Zakry Chami

Customer engagement is not a trendy marketing buzzword. It’s a strategy — and we're here to explain what that means and why it's important for Canadian businesses like yours.

What is Customer Engagement?

There are many ways to define customer engagement, but the bottom line is this: customer engagement is an actionable strategy that merchants put into place in order to establish and maintain an emotional connection with their customers.

You see, when there is an emotional connection between a brand and a customer, the door opens to build a lasting and valuable relationship. In any relationship, it’s all about continuous, meaningful interactions.  When interactions are not meaningful, the relationship dissolves, the connection is severed, and both parties move on. 

In the end, every brand/customer relationship comes down to one thing: “What do I get out of it?”

The Benefits of Customer Engagement

When merchants keep customers engaged throughout the entire purchase journey, loyalty is developed. When a customer is loyal and engaged, they are more likely to visit more often and recommend your business to friends and family. Gallup research shows that a fully-engaged customer represents 23% more revenue than the average customer.

Loyal customers who frequent your establishment often are more than happy to encourage others to visit as well, and are more likely to share valuable information with you. That’s another reason why customer engagement is important. If a customer is willing to share their birthday and anniversary details, you are better equipped to respond to the question “what do I get out of this relationship?” You can now begin to personalize communications, offers and send the right message at the right time. 

Sending a happy birthday message, for example, along with a promotional offer is one way to interact with loyal customers and prove you care about the relationship. Your customers will appreciate the gesture and it will likely deepen their engagement with your brand. 

Different Types of Customer Engagement

We all like choices. When you let your customers choose how they’d like to engage with you, you’ll be more likely to uncover the type of interactions that they find valuable. When you make it easier for customers to engage with you, you’ll strengthen their emotional investment in your brand.  

So it’s best to give them plenty of choices up front and evaluate which options they find the most valuable, convenient and beneficial. That’s why customer engagement is a strategy. There is no silver bullet. Customer engagement efforts span the spectrum and it’s about finding the right balance of strategies to build stronger, lasting relationships with your customers. 

5 Customer Engagement Strategies You Should Try

Canadian brands who have mastered the art of customer engagement don’t pin hopes on one method. They give customers many different ways to interact with their brand, including in-person and digitally. Remember, it’s all about choices. 

Here are a few strategies that could help you increase your customer engagement:

1. Reward your customers 

One of the simplest most effective tactics is to launch a loyalty program. A loyalty program can increase your average purchase amount by about 25%. How is that possible? Well, 65% of loyalty program members will modify the amount they spend to maximize their rewards earned. 

If you’re worried about the points or rewards you give away cutting into your profits, don’t. For most loyalty programs, the value of a point is around 1.5% of the purchase, which is a small price to pay for a 25% return. 

Additionally, customers tend to shop more at a business that offers a loyalty program because they have an incentive. It’s true! Seventy five percent of customers report they are more likely to make another purchase after receiving a loyalty reward. 

2. Incentivize your customers

One of the best ways to bring customers back is by offering them an incentive. Promo cards are a great motivator and work for any size business. Promo or discount cards are similar to gift cards except they have an expiration date. That’s the key to encouraging customers to return within a time frame of your choosing.

Promo cards are a perfectly simple engagement tool that can be used in so many ways.  Have a disgruntled customer? Repair the relationship with a sincere apology and a promo card. Need to drum up business during your off-season? Offer customers who spend a certain amount in-store or online on a designated day with a promo card to spend later. 

3. Give away gift cards through social media

Posting on social media is a great way to increase brand awareness, but you have to do something engaging too. Contests are a great way to get customers to spend, visit or give you a glowing review. 

A contest can be as simple as asking social media followers to tag three friends for a chance to win a gift card. Another idea is to ask followers to share your story for an opportunity to win an exclusive product or service in the form of a gift card. 

A gift card giveaway is a small price to pay for staying top of mind with your customers and gaining exposure among new customers. Plus research shows that whoever wins the gift card could spend an average of $59 more than the card’s value.

4. Get personal with your customers

Eighty two percent of people say personalized offers increase how often they shop with a brand. Adopting a customer engagement strategy that is highly personalized will help you gain more loyal customers.

The best first step is to send customers personalized communications. With automated marketing tools, you can send offers to customers at key moments like anniversaries or when they haven’t visited in a while. With the right tools in place, communicating and engaging your customers can be effortless and turn-key.

5. Send texts to your customers 

Most of us are tethered to our cell phone, which makes text messaging one of the most effective ways to ensure customers see your message.  Eighty two percent of people say they open every text they receive and 54% say they would prefer to receive promotions via text message. 

Only 11% of businesses currently send text message offers which means you could get in on the ground floor and gain a major competitive advantage.  Getting consent to text customers can easily be done by offering a loyalty program with built in marketing automation. When your customer signs up, they agree to give you their cell phone number and consent to communications from you because they will receive exclusive benefits.

Measuring results

How to Measure Customer Engagement

It will be impossible to improve your customer engagement efforts unless you know how to measure customer engagement. Capturing and analyzing various data from every customer touchpoint will help you understand which interactions are working and which ones are not.

Here is a list of metrics you should track to determine if your loyalty program and customer engagement communication efforts are making a difference: 

  • Purchase frequency
  • Average order value
  • Repeat purchase rate
  • Loyalty program enrolment rate
  • Participation rate and engagement rate
  • Percentage of sales from repeat customers versus loyalty members
  • Customer churn rate
  • Net promoter score
  • Customer lifetime value

If you’re feeling overwhelmed right now, don’t be. Start measuring these three metrics first to establish a baseline and build from there.

Purchase Frequency

How much time passes before your customer makes another purchase? If they are highly engaged, the timeframe will be shorter than if they are not. 

How to calculate it: In order to calculate Purchase Frequency, try this formula: Number of orders in the last 365 days divided by the number of unique customers over the last 365 days

Average Order Value

What’s the average amount a customer spends at your establishment? Typically, repeat customers spend 7X more than a one-time customer. Keeping a pulse on this metric is important because it will show you how much your loyalty members spend per visit. You can then compare this to your non-loyalty members and see how much lift you’re getting from your loyalty program. 

How to calculate it: Total revenue over the last 365 days divided by the total number of orders placed in the last 365 days

Repeat Purchase Rate

How many customers have made more than one purchase this month? The answer will shed light on your customer retention efforts and if your strategies are working effectively.

How to calculate it: Number of customers that bought more than once divided by the total number of customers

Getting access to the insights you need to know the ROI of your customer engagement strategies requires reporting and analytics. At Paystone, we put key information at your fingertips so you can view critical data and generate detailed reports quickly. Our platform tracks data like loyalty activity, member spending, and gift card activity in real-time so you can always see and know how to increase customer engagement.

How does Paystone help with Customer Engagement?

Staying connected with your customers in a meaningful way through various channels is the key to increase customer engagement. 

Loyalty programs like ours, have built-in communication tools, which means you can regularly send your loyalty members messages that will get them back in the door. Our email and text messaging marketing tool are designed to make communicating with your customers easy so you can focus on building better relationships.

Remember, loyal customers are the key to any business’ success because they can account for up to 80% of your revenue, and 55% of them will recommend your business to family and friends. That means you acquire new customers without having to spend anything. 

With the Paystone gift card program, you can start selling gift cards within 10 business days.  We make it easy to get set up, order branded gift cards and then activate, redeem and reload your gift cards right from your payment terminal.  

Customer Engagement Tools

When it’s effortless to engage and stay connected with customers, you will find success at bringing them back more often. A customer engagement solution with the following features will equip you with all the tools you need to interact more deeply with customers:

Automatic Offers: Automatically send members email offers based on key moments in their customer journey. 

Digital Communication Tools: Reach customers on their mobile phones via text message or personalized emails. 

Reporting & Analytics: Easy to read dashboards offer critical insights at a glance and in real-time.

Promo Cards: Boost traffic during slow periods with promo cards that have an expire date.

Our powerful customer engagement solutions help Canadian businesses of all sizes grow their revenue, future proof their business and increase customer loyalty.

Zakry Chami

Zakry Chami

is the Product Marketer at Paystone. You can find him playing squash at his local fitness club or planning his next backpacking trip.