Increase Customer Engagement through Smart Use of Customer Profiles

In the age of digitalisation, customer engagement is more than just a buzzword; it’s a critical factor for a company’s success. How can customer engagement be maximised? The answer lies in the realisation that genuine engagement is only possible if we see our customers not just as numbers, but as individual personalities. In this context, two fundamental prerequisites are central, without which effective customer engagement is unthinkable: the comprehensive and smart formation of customer profiles and the adherence to data protection regulations when collecting data. Many companies take these two prerequisites for granted, which, however, can be a significant mistake. In this article, we explore why these foundations are so crucial for high customer engagement.  

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The essencial in Brief:

Customer engagement is the interaction and emotional connection between a customer and a brand, going beyond mere purchasing to manifest in active participation and loyalty.
Customer engagement is key to creating and maintaining strong customer loyalty and thus to long-term revenue growth.
Intelligent and comprehensive creation of customer profiles and compliance with data protection laws in the collection of customer data are particularly important and often underestimated for successful customer engagement marketing.

What is Customer Engagement?

When we talk about customer engagement, we refer to a lasting relationship between customers and companies. It’s about turning customers not just into buyers but into active participants in the brand world. Customer engagement is the emotional and interactive bond a customer develops with a brand.

It manifests in various forms – whether through regular interactions on social media, participating in customer surveys, or sharing feedback and experiences. For companies, this is more than just a nice extra; it’s the core of a successful business strategy.

Customer Engagement, Customer Satisfaction, and Customer Experience

The Differences

Customer Engagement refers to the active participation of customers in company activities, such as giving feedback or participating in promotions, to build and maintain strong customer relationships.
Customer Satisfaction, on the other hand, is a customer’s evaluation of a specific product or service experience, measured through surveys or feedback, to assess how well customer expectations were met at that moment.
Customer Experience encompasses the total experience a customer has with a company, including customer service, website usage, and brand perception, and has long-term effects on customer retention and loyalty.

Index:

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Why is Customer Engagement so important?

This is why it's worth it for your business!  

In today’s competitive business world, customer engagement is not just desirable but essential. It is the key to creating and maintaining strong customer loyalty that goes far beyond the simple act of purchasing. This loyalty often leads to a significant increase in revenue, as engaged customers are more likely to make repeat purchases and spend more over time.

Customer engagement offers numerous benefits for businesses, including stronger customer retention and brand loyalty, revenue growth through positive word-of-mouth, cost savings, and valuable feedback for continuous improvement. Additionally, it promotes the building of trust and reputation, provides a competitive edge, supports crisis management, and contributes to market research and innovation.

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Customer Engagement Marketing:

The Different Types

Imagine entering a newly opened café. Immediately, the barista greets you by name and remembers your preferred coffee – fostering personalised customer engagement. On the wall, there’s an announcement for an upcoming coffee tasting event – an example of offline engagement. You receive a notification on your smartphone through the café’s app, offering you a discount on your favorite drink – that’s mobile app engagement. Later in the day, you see a post from the café on Instagram, inviting customers to share their own coffee creations and selfies with their coffee – customer engagement on social media. And finally, when you leave an online review for the excellent experience, the café responds with a thank you and an invitation to participate in a survey, thereby collecting important zero party data about you.
These everyday interactions are at the heart of customer engagement. They demonstrate how businesses build and maintain connections with their customers through various channels and methods. In the following sections, we will explore the diverse facets of customer engagement in more detail.

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How-to Step by Step:

How to Increase Your Customer Engagement

Let’s continue with our step-by-step guide to increase customer engagement using our fictional example of a café. A fictional café, “Café Cosy,” wants to increase its customer engagement. It follows these steps:

Initiate Activity Café Cosy launches a marketing campaign themed “Your Favourite Coffee, Our Secret Recipe” to attract attention.
Personalisation and Data Collection The café analyses customer data from both offline and online sources (e.g., website data, app data, loyalty cards) to identify preferences and behavioural patterns. Offers and communication are tailored to individual customer profiles. Personalised email offers, such as a perfectly matched coffee offer based on individual customer preferences “have you ever tried…”
Utilise Customer Feedback An online feedback form is set up to collect opinions. The café analyses the feedback to identify areas for improvement. Based on feedback, new coffee varieties and snack options are introduced.
Targeted Online Content Marketing Café Cosy creates content specifically tailored to the captured data of customers about coffee culture and health trends. Regular blog posts and videos on coffee preparation are published. Customers are invited to share their own coffee recipes on social media. The café chooses Instagram and Facebook for its social media activities. Daily updates with pictures of specialties and customer moments are posted. The café actively responds to customer comments and shares customer posts.
Introduce Loyalty Programs A reward program “Every 10th Coffee Free” is introduced along with a stamp card. The benefits of the program are clearly communicated to customers. Participation is tracked, and the program is regularly adjusted to remain attractive.

The Flywheel Effect in Customer Engagement

The Flywheel Effect in Customer Engagement describes a self-reinforcing cycle of customer engagement: Customers receive relevant information, which strengthens their trust in the brand and motivates them to share more personal data. This interaction generates more detailed customer profiles, allowing the company to more accurately address individual customer needs. Through this improved customer approach and optimized customer experience, customer trust is further enhanced, which in turn leads to even more intensive interaction. This process, similar to the constant spinning of a flywheel, continuously builds momentum and leads to a sustainable improvement in customer relationships.

How to Measure Customer Engagement?

KPIs and Relevant Metrics of Customer Engagement

Choosing the right KPIs depends on the specific goals and industry of the company. Regular monitoring of these metrics helps to guide and increase customer engagement.

Key Performance Indicators (KPIs) for Customer Engagement to achieve the goals include:

Net Promoter Score (NPS): This value measures how likely it is that customers will recommend your company. The NPS is a strong indicator of customer satisfaction and loyalty.
Customer Satisfaction Rate (CSAT): The CSAT assesses customer satisfaction after each interaction and provides immediate insights into the customer experience.
Churn Rate: This metric measures the percentage of customers who leave the company. It is crucial for understanding customer retention and loyalty.
Retention Rate: Indicates how many customers remain loyal to the company. A high retention rate is a sign of long-term engagement and high customer value.
Average Customer Value (ACV): The ACV determines the average value a customer generates over time. It helps identify particularly valuable customers.

Other important KPIs for measuring Customer Engagement include conversion rate, engagement duration, social media engagement to assess online community activities, number of customers and growth, and complaint rate and resolution time to evaluate customer service and complaint management.

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Conclusion:

Customer Engagement is Based on Extensive Customer Knowledge

Personalised marketing is a prerequisite for customer engagement. Imagine your hero banner presenting personalised call-to-actions that are specifically tailored to the interests of your visitors. Predefined buttons and content are displayed based on the user profile, going far beyond simple advertising. This could include displaying relevant blog articles or products in an online store based on the individual interests and preferences of the customer.

Essential for successful customer engagement through the use of customer profiles is the extensive collection of customer data and ensuring data protection-compliant consent to guarantee a trustworthy customer relationship.

Teavaro's 5 Success Strategies for
Customer Engagement

Smart and Comprehensive Data Collection This synergistic connection of behavioural and customer-related data allows Teavaro to enable your company to more precisely address the immediate needs and long-term desires of your customers. Whether it’s about current interests or fundamental questions like “What can I afford?”, Teavaro provides you with the insights you need to create a more effective, personalised customer experience.
Own ID-Graph for Optimised Customer Approach Rely on individual identification methods such as login, self-, and click-identification to better understand and specifically target your customers. These identification methods assist in linking devices/browsers with the ID-graph and enable recognising users across various digital channels. With Teavaro, you can create unique customer profiles that allow for a more personal and effective customer communication.
Maximum Accessibility through Utiq’s Authentic Consent Service With Teavaro and Utiq, you reach your customers everywhere – both in walled gardens and in the open internet. With Teavaro, you optimise your retargeting campaigns in walled gardens by accurately identifying your customers and tailoring your messages and offers to customer behaviour, to advertise more efficiently and avoid unnecessary costs.

Overcome the challenges of targeting in the open web without third party cookies. With Teavaro, use advanced technologies like Universal IDs or signal-based solutions, such as Utiq’s Authentic Consent Service, to target your customers accurately and in compliance with data protection.

4. Personalisation – First Page Load The first page a customer sees on your website is crucial. With Teavaro, you activate customer data right at the first page load, to offer immediate personalisation. This approach allows tailoring the customer experience from the very beginning. With Teavaro, you also tailor your consent management to each customer to increase consent rates and create a seamless, customer-friendly experience across all touchpoints. This leads to stronger customer relationships and a reduction in consent fatigue.
5. Efficient First Party Data Strategy An efficient first party data strategy, based on your own first party ID-Graph, plays a key role for companies to accurately capture their customers and their needs. This enables significantly personalised and more relevant customer interactions. At the same time, adhering to data protection regulations, especially customer consent, is a crucial and often overlooked aspect of this strategy.

True customer engagement stems from a deep understanding of your customers – not just from long-term customer data, but also from current customer intent. Our technology merges these two worlds: We analyse what your customers are currently concerned with and combine this information with more general customer profiles, such as financial capabilities and preferences.

Each of the following Teavaro strategies for capturing customer data enables your company to develop a profound understanding of your customers and build strong, long-term relationships.

With Teavaro, turn customer data into sales success.

About the author:

Dirk Rohweder

COO & Co-Founder

Dr. Dirk Rohweder, COO & Co-Founder, has over 30 years of experience in leadership positions in IT, telecommunications, consumer goods, and consulting, including as CIO of the Paulaner Brewery Group and T-Mobile (UK and Germany).
Since 2012, he has focused on customer data as a strategic asset and the basis for omnichannel marketing, data-driven business models, data protection, and consent for marketing activities (GDPR).

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We believe that a true connection is built on explicit consent and grows over time as it provides unique value to all parties involved.