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Achieving success and profitability in business involves a series of intricate steps. Miss just one, and your whole plan might go off track, leading to results that fall short of your expectations.

While the significance of delivering high-quality products and setting the right prices for business success is frequently emphasized, companies often overlook a central aspect that can effortlessly set them apart from the competition - customer engagement.

If statistics are to be believed, that is a rookie mistake. A Forbes survey from 2020 stated that 74% of consumers make purchase decisions based solely on the buying experience. Further, a whopping 77% of people give equal weightage to customer experience and product price/quality while shopping.

Common challenges of customer retention

In the present day of short attention spans and extensive expectations, the only thing harder than attracting customers is retaining them. Companies often lose customers not to attractive offers and premium branding but to factors as simple as enhanced convenience and better customer experience.

As per SEMrush, 89 percent of companies believe that the quality of customer service has a direct impact on customer retention. The point is also highlighted in a survey conducted by KPMG that states that 55 percent of customers would make repeat purchases from brands that offer convenience in the shopping process.

Further, it is worth noting that retaining customers is far more rewarding for a business than attracting new customers. As per Harvard Business Review customer acquisition can cost companies 5 to 25 percent more than customer retention. Additionally, repeat customers often bring new business through referrals and generate higher revenue.

KPMG reveals that 86 percent of loyal customers would recommend a brand or product to others, while 66 percent would leave a positive review online. Good reviews and personal recommendations equal more business for brands.

How to increase customer engagement?

Let us explore some strategies that can help brands use customer engagement to enhance the buying experience:

1. Personalize customer experiences

Personalization plays a pivotal role in customer engagement. It fulfills the primary need of convenience for today’s busy customers. By offering tailored product suggestions, offers, discounts, etc., brands can reduce the load on a customer’s brain while shopping, and make their overall experience easier and more enjoyable.

Introducing personalization in the shopping experience can help brands make their customers feel valued and engage them better. According to McKinsey, 76 percent of customers prefer personalized shopping experiences. Their report also states that companies can observe up to 40 percent growth in revenue by introducing personalization into their shopping experience.

Spotify is one brand that aces the art of personalization through tailor-made playlists, end of year recaps, and highly relevant suggestions.

2. Launch loyalty and rewards programs

Human beings are wired to chase incentives. Even if the material value of a reward is relatively low, a person still feels a sense of accomplishment upon winning it through some effort.

Companies can build on this basic psychological need by utilizing effective loyalty and rewards programs to drive up customer engagement. As per a McKinsey study, top-performing loyalty programs help brands boost their revenues by up to 25 percent each year.

Brands like Starbucks make effective use of this strategy. The Starbucks loyalty program rewards customers with free drinks or refills based on points collected by placing orders through apps. This program motivates customers to repeatedly buy from the Starbucks apps, which, in turn, not only boosts the coffee giant's sales, but also the customer data collected from the app.

3. Host interactive events and webinars

Hosting interactive events and webinars is a practical way of amplifying customer engagement. By communicating one-on-one with your customers, you can give them a closer, more personalized treatment.

Also, interactions will make them more open to your brand and encourage them to buy more. Establishing an interpersonal relationship also makes customers likely to overlook and forgive brand mistakes since they feel close to the company.

Trello’s on-demand webinars are a great example of how to use webinars to improve customer engagement. The system lets customers chime in at their convenience and get all the information they need.

In this way, Trello gives people value that is beyond just a subtle call to action, and this authenticity encourages customers to trust the brand.

4. Implement gamification techniques

Gamification techniques are a relatively newer but much helpful tactic to drive up customer engagement. The gamification industry is projected to reach a valuation of $2317 billion by the end of 2026, growing at a CAGR of 36 percent. The impressive growth reflects the promise of this trend and the industry at large.

By adding reward systems and interactive elements to their customer experience, brands can impart a sense of thrill and achievement to their customers. This would drive up customer engagement by providing psychological benefits to buyers, over and above their material purchases.

Sephora provides a gamified quiz on their app that allows customers to swipe left and right on products. This keeps the customers engaged and entertained, which leads them to spend more time on the Sephora app and increases the likelihood of purchase.

5. Encourage user-generated content

Statista reports reveal that almost 60% of customers base their purchase decisions on online research and customer reviews. In this context, UGC is a very handy tool for brands to utilize the value of word of mouth marketing.

UGC is not only entertaining but also far more credible to consumers than a brand's word on the quality of its own product.

Many popular companies like BMW and Adobe utilize this tactic by popularizing their hashtags and reposting success stories of their customers on their social media to underscore the unmatched quality and customer satisfaction that their buyers experience.

6. Optimize mobile experience

As per a 2020 Deloitte report, even a 0.1 percent reduction in mobile site load time can boost conversion rates by 8 percent and reduce bounce rates by the same percentage.

This staggering statistic highlights just how much importance a modern-day consumer places on fast and convenient online shopping experiences. Walmart is a popular brand known for offering a remarkable mobile shopping experience.

A Statista study found that Walmart's shopping app had the highest number of active monthly users in 2021, a massive 22 million more than the e-commerce giant Amazon.

7. Offer value-added content and resources

The customers of today are driven by information and knowledge. They know they have an abundance of options and thus want to buy only the best. To make a positive impression on a customer like this, brands can utilize the power of good quality content.

Providing value-added content and resources like eBooks, tutorials, and blogs on your website can not just amplify customer experience and ease, but also boost your visibility through SEO.

A real-life example of remarkable content marketing would be Doritos. Their humorous marketing campaigns and clever use of UGC are often highly applauded. The tortilla chips brand famously uses memes and other social media trends to meet its customers where they are.

They even offer cash prizes to award quality UGC, which further help increase their customer engagement.

8. Seek and act on customer feedback

Serving your customers well isn’t restricted to providing them with good quality products and thoughtful prices. Brands also have to provide helpful and dedicated customer service.

A 2022 Statista survey highlights that 78 percent of customers base their purchase decisions on customer service quality. The report also states that 80 percent of individuals are willing to forgive brand mistakes when they receive quality customer service.

Brands can easily stand apart from the competition by adopting a tactful and professional approach to customer feedback or complaints. For example, the e-commerce giant Amazon has created a trustworthy image in the eyes of the public through consistently sincere customer service.

Their quick and hassle-free solutions to customer problems are often praised publicly.

9. Leverage social media for community building

With almost 5 billion people worldwide using social media, a strong social media presence can help a brand achieve great visibility and publicity. However, this can only happen if companies know how to leverage it properly. Simply creating an account across platforms is not enough, brands must make an active effort to create a positive and interactive community.

According to McKinsey research, customers are likely to spend 20-40% more with companies that are active and responsive on social media. The report also stated that companies that do not invest time and effort in maintaining their social media experience a 15% higher churn rate than their active counterparts.

PlayStation, with a massive following of almost 33 million people on Twitter, is a great example of how brands can utilize social media for customer engagement. Their account is well known for posting frequent and relevant content that keeps their users engaged and informed.

10. Use AI and chatbots for real-time assistance

HubSpot highlighted that a significant 51% of customer service agents believe they do not have enough time in a day to properly meet customer demands and expectations.

Introducing AI in this process can help take off the load of the overworked staff while making things more convenient for the customers.

In today's hectic lifestyles, buyers seldom have the time for much deliberation. Convenience and pace are, thus, critical to a worthy customer experience. By making customer service available 24/7 through AI and chatbots, brands can greatly reduce customer effort while shopping, and increase their chances of selling. 

11. Develop exclusive members-only offers

It may come as a surprise, but as per a 2020 McKinsey survey on loyalty programs, members of paid loyalty programs are 60 percent more likely to spend more on the brand as compared to their free alternatives.

The main reason behind this impressive number is the exclusivity that these paid programs create. Since these programs have fewer users, companies can also provide them with better, more valuable rewards and offers without facing financial issues.

12. Foster brand advocacy through referral programs

Referrals are a proven tactic of marketing. As per a Statista survey, almost 38% of people agree that word of mouth has a significant impact on their purchase decisions.

Since people are more likely to trust a brand if their near and dear ones recommend it, this approach to customer acquisition is one of the most fruitful.

However, brands have little to no direct control over the recommendation process. The most they can do is offer rewards on referrals to encourage customers to recommend them. The global apparel brand Levis is a well-known example of a brand that benefitted significantly from word-of-mouth tactics.

13. Regularly update and refresh content

HubSpot research states that using digital platforms for marketing and building communities around your brands is important for customer engagement.

However, simply posting content is not enough, it must also be relevant and up-to-date. Thus, brands must regularly update and refresh content for enhanced customer engagement.

14. Implement augmented reality (AR) experiences

An Infosys report highlighted that 77.3% of customers abandon their carts owing to doubts. Implementing AR/VR techniques into the customer experience can help companies avoid losing sales to such indecision.

IKEA, for instance, utilizes this by using effective AR to show people how a particular product would look or fit into their room virtually. This helps alleviate doubt and second-guessing and facilitates quick purchases.


It is a statistically proven fact that customer retention is far more profitable for companies than customer acquisition. Thus, companies must put their best foot forward in engaging and serving their customer base.

By utilizing the above-mentioned tried and tested strategies, any company can boost their customer loyalty and capitalize on the several benefits.

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