Customer engagement is the act of providing positive experiences to customers across the entire customer journey. Customer engagement strategy is a hallmark of the overall customer experience.
Customer expectations have increased in recent years, leading customers to more quickly change brand loyalty. A 2024 IBM retail study found 77% of consumers across all income groups say they make tradeoffs when prices are too high. As such, organizations often need to prioritize their customer engagement efforts across the customer lifecycle to keep customers happy.
According to Salesforce, 80% of customers value the experience an organization provides as much as the products and services they sell.1 Organizations need to connect with customers throughout their omnichannel customer journeys, from in-store interactions to social media, email, forums and contact centers. Providing omnichannel customer service is the best way to provide successful customer engagement throughout the customer journey.
Some customers increasingly want a deeper emotional connection with the companies from which they buy products and services. Other customers just want the items that they purchase to work without any issues.
Effective customer engagement helps organizations recruit new customers and retain their existing customers.
Optimizing customer interactions is likely to produce several important benefits.
Reduce churn rates: Engaged customers are less likely to leave the company they prefer. By focusing on communicating with customers and understanding their needs, they can correct any issues before they turn a customer away.
Increase customer satisfaction: Engaged customers are likely to be happier and more likely to recommend a company to their friends.
Drive an organization’s bottom line: Improving customer engagement helps organizations spend less money on finding new customers, which can cost four to five times as much as keeping their existing customers.
Better understanding of core strengths and weaknesses: Organizations that prioritize engagement with customers are more likely to receive feedback about what is good and bad about their existing offerings. Advanced organizations can use this information to improve their products to drive even higher customer satisfaction.
There are several key customer engagement trends for organizations to ensure they optimize the customer experience to their target audiences.
Smart organizations do not wait until a customer reached out with an issue or a question to keep in contact with them. They reach out in key moments during the customer journey, especially after purchase, to provide feedback and advice on how to use the solutions.
Many customers, especially those from younger generations, expect the companies they purchase goods from to share in their worldview and perspectives. Some organizations embrace advocacy for important social causes, while others are minimalist in what they support.
Individual consumers like brands for different reasons. They might want something that feels luxurious, fashionable or sustainable. Smart organizations understand what motivates their current and potential customers and gears the brand experience toward provoking those feelings.
Organizations have several ways to improve customer engagement.
There are several different KPIs an organization can track to measure customer engagement. Tapping into real-time customer data is a great way to stay ahead of any customer issues.
A 2024 IBM consumer study found that over half of respondents expressed interest in using bots or virtual assistants (55%), augmented or virtual reality (55%), and AI applications (59%) as they shop retail.
Generative AI: There are several key use cases for generative AI to enhance customer engagement, including:
Conversational AI: Every customer is different. Some customers will always prefer to talk to a customer care representative. While others will prefer to engage with intelligent chatbots to get answers to their questions. Conversational marketing uses generative AI to communicate with customers and prospects through personalized, real-time interactions on various marketing channels. It powers chatbots and other tools that can remove the need for an employee to provide information.
AI-assisted customer service: An Institute for Business Value study found that 63% of executives planned to use generative AI to help customer service agents by the end of 2023. Generative AI can help agents find answers to customer issues quicker by searching through previous call transcripts or other customer data.
Predictive customer service: Organizations can use information from customer interactions to create dynamic FAQs of the most frequent questions and answers or preemptively create resolutions to future issues.
Sentiment analysis: Generative AI can analyze vast amounts of customer data to extract trends, behaviors, preferences and feelings. Curating and using this information empowers businesses to understand, connect with and serve their customers. For instance, the data can help improve targeted marketing campaigns or product and service offerings.
Machine learning (ML): Organizations that collect a lot of customer feedback can use ML to parse that information and generate actionable insights. ML can use data and algorithms to enable AI to imitate the way that humans learn.
Automation: Automation helps organizations streamline workflows and customize experiences. An organization that has embrace automation can provide an excellent customer experience from awareness through to purchase.
For example, a prospect that comes to a website can engage with an AI chatbot that can provide more information. Those customers can request more information by supplying their email address. Organizations can set up email workflows to supply more information, exclusive offers and request feedback.
Augmented reality (AR): AR involves real-time integration of digital information into a user’s environment. Organizations can improve customer engagement by using AR to show customers how personal care products look on them or household goods look in their homes.
Virtual reality (VR): Organizations can use virtual reality to create even more immersive experiences for their customers. They can create marketing materials, product visualizations and other experiences to help customers make important purchasing decisions.
1 “What Is Customer Engagement?”, Salesforce.
IBM named a Leader for the 19th year in a row in the 2024 Gartner® Magic Quadrant™ for Data Integration Tools.
Explore the data leader's guide to building a data-driven organization and driving business advantage.
Simplify data access and automate data governance. Discover the power of integrating a data lakehouse strategy into your data architecture, including cost-optimizing your workloads and scaling AI and analytics, with all your data, anywhere.
Learn how an open data lakehouse approach can provide trustworthy data and faster analytics and AI projects execution.
Explore the vital synergy of governance, risk and compliance (GRC) in modern business operations.
Connect your data and analytics strategy to business objectives with these 4 key steps.
Gain an introduction to the data fabric topic as well as guidance on enforcing data governance and security for shared data between applications.
Gain unique insights into the evolving landscape of ABI solutions, highlighting key findings, assumptions and recommendations for data and analytics leaders.
Create a governed data foundation to accelerate data outcomes and address privacy and compliance requirements.
Prepare for the EU AI Act and establish a responsible AI governance approach with the help of IBM Consulting.
Discover data governance software for discovery, quality and protection.