Customer Engagement: Definition, Examples, and Why It’s Important

Customer engagement has significantly evolved in recent years as businesses prioritize innovative methods to attract and retain loyal customers. While offering a high-quality product or service once sufficed, the landscape has shifted dramatically. According to Redpoint, studies reveal that 74% of consumers are more likely to make a purchase based on how a brand interacts with them.

With advanced data and analytical tools, customer engagement has emerged as one of the most critical factors influencing purchasing decisions. It’s now a central topic in business strategies and discussions. Despite its growing importance, the concept often remains abstract and misunderstood by many organizations.

In this article, we’ll break down what customer engagement truly entails, highlight its benefits, and provide actionable strategies to help businesses foster stronger relationships and drive success in today’s competitive market.

What is Customer Engagement?

Customer engagement is the process by which brands establish and nurture continuous relationships with their customers through meaningful interactions at every stage of the customer journey. By fostering these connections, brands can inspire long-term loyalty and enthusiasm from their audience.

Essentially, customer engagement is about the depth and relevance of the bond between a brand and its customers and how well the brand’s messaging resonates and motivates customers to take action. This could manifest as a customer clicking on an ad to explore more products, subscribing to a newsletter, or following the brand on social media. Such interactions help drive ongoing brand affection and loyalty over time.

Why is Customer Engagement important?

Customer engagement is crucial as it directly impacts customer satisfaction, boosts brand loyalty, and lowers churn rates. When a brand engages effectively, it ensures that its messages resonate with audiences through relevant, meaningful ads that are more likely to prompt interaction.

A 2021 survey by Amazon Ads and Kantar, which surveyed 1,000 U.S. consumers, revealed that 88% of respondents engage with ads tailored to their interests, and 89% are more likely to interact with ads that align with their life stage. Additionally, consumers are more likely to engage with ads that address a specific need. The experience provided by these ads is the key driver of engagement, outweighing other factors like humor, entertainment, or inspiration.

Marketing Funnel and Customer Engagement

Brands can implement various customer engagement strategies across different stages of the marketing funnel, from awareness to consideration, decision-making, and loyalty. Here's how brands can engage customers effectively at each stage, whether they are new or existing:

1. Awareness

Brand awareness refers to a customer’s familiarity with a brand, including recognition of its name, messaging, values, culture, and tone. To drive awareness, brands need to reach customers where they spend their time, such as through TV ads (both linear and connected), digital advertising, social media campaigns, content marketing, and more. This stage offers brands an opportunity to engage customers early in the buying journey. According to a survey, 84% of shoppers start their online research on digital channels that aren't the brand’s own website, making these touchpoints more critical than ever.

2. Conversion

At the conversion stage, the goal is to inspire potential buyers to purchase by demonstrating that your brand is the right solution to their needs. A well-designed website, clear product pages, and an excellent customer service experience are key in this phase. Ensuring a positive experience boosts customer confidence and engagement, improving conversion rates and leading to higher sales.

3. Loyalty

Building customer loyalty requires offering a seamless purchase experience and delivering high-quality products or services. Nurturing relationships with customers after the sale ensures they remain top-of-mind. Retaining existing customers is more cost-effective than acquiring new ones, it's five times cheaper to keep a customer than to attract a new one. Loyalty programs, email nurturing campaigns, social media activations, and other engagement marketing tactics are great ways to foster long-term customer relationships. Ultimately, the goal is to create loyal, satisfied customers who will become brand advocates, helping to sustain your business’s growth.

Customer Engagement Strategy

• Understanding of Audience

To effectively enhance customer engagement, it's essential to have a comprehensive understanding of your audience. Look beyond basic demographics and delve into how your customers interact with your product or service. This deeper insight will enable you to craft tailored messaging and creative content that resonates, ultimately boosting your brand’s engagement with customers.

• Offering Value at Every Interaction

Offering value at every touchpoint is crucial for keeping customers engaged. Brands should explore creative ad formats that deliver unique experiences to captivate and inspire their audience. According to a recent study ,55% of consumers prefer interactive ads that allow them to follow links to purchase products, participate in at-home activities, or enter sweepstakes. Additionally, 55% of consumers are drawn to brands that creatively integrate their messaging into the content they are watching. This indicates that consumers are receptive to innovative and engaging ways brands can blend their messaging into consumer experiences.

• Optimise and Measure

To maximize customer engagement, it's important to continually measure and optimize your efforts. Leveraging data and analytics helps identify successful strategies and areas for improvement, enabling you to refine your creative approach for even better engagement outcomes.

Examples of Customer Engagement

• The Honest Company

The Honest Company has been utilizing creative customer engagement strategies since it started advertising on Amazon in 2017. To build brand awareness and reach fresh audiences, they combined various advertising tools, including Amazon DSP (Demand-Side Platform) and Amazon Streaming TV ads. By using Amazon DSP, they were able to target exclusive audiences on Amazon-owned platforms as well as on third-party sites and apps, helping them extend their reach beyond Amazon itself.

To engage high-intent shoppers, The Honest Company also leveraged Sponsored Products, making it easy for customers actively searching for specific products in their category to find their offerings. Plus, by offering coupons directly on product pages, they encouraged customers to make a purchase right then and there.

One of the brand’s standout engagement tactics was hosting an Amazon Live livestream with Jessica Alba, the founder. This gave her the chance to connect directly with customers, share the story behind the brand, and showcase products in a fun, interactive live video.

This multi-faceted strategy paid off big time. The Honest Company saw a fivefold increase in page views from Streaming TV ad impressions, a 39% higher return on ad spend, and continued growth in reach from one quarter to the next. It’s a great example of how brands can use a blend of ads, live engagement, and personalized experiences to keep customers engaged and drive results.

• McDelivery

McDonald’s McDelivery service has been redefining customer engagement since its launch in Canada in 2017. With the onset of the pandemic in 2020, McDelivery became even more essential as restaurants had to close indoor dining. To shift brand perception and engage with customers in new, creative ways, McDonald’s partnered with Amazon Advertising to develop the campaign "McDelivery and a Movie."

This campaign was all about bringing the family movie night experience directly to customers, combining food delivery with entertainment. Custom “McDelivery hubs” were created on Amazon.ca and Fire TV, offering a curated list of movies perfect for a cozy night in. Additionally, a shoppable carousel featured movie night essentials like popcorn bowls and pajamas, making it easy for customers to complete their experience with a few clicks.

To amplify the campaign, McDonald’s used traffic-driving display banners and engaging online video content, running across multiple platforms including Amazon.ca, IMDb, Twitch, and even Thursday Night Football. The campaign not only promoted McDelivery as a convenient service but also made it a fun, integrated part of customers’ entertainment routines. This creative approach helped McDonald’s boost engagement and positively shift how customers viewed the brand during a challenging time.

Final words on Gamification Customer Engagement

In today’s competitive landscape, customer engagement is crucial for building lasting relationships and driving brand loyalty. By creating meaningful, interactive experiences, brands can keep customers coming back for more. 99minds offers innovative solutions to enhance customer engagement through its gamified loyalty programs, helping businesses connect with their audience and foster long-term relationships.

Frequently Asked Questions (FAQs) on Customer Engagement