How can the Relationship between Customer Engagement and Loyalty...

How can the Relationship between Customer Engagement and Loyalty Enhance Sales?

By: Retail CIO Outlook | Wednesday, September 16, 2020

Companies have started to understand and provide solutions like customer engagement and loyalty programs to interact with the customers to increase customer revisits.

FREMONT, CA: Customers and businesses of today expect convenient, relevant, and very responsive engagement platforms across every interaction. Nearly every customer experience is driven by quickly evolving digital technology. When leveraging technology increases, one of the parameters to measure will be customer loyalty. Customer engagement is an indicator of customer loyalty and increased profitability of the brand. It is to determine the customers' willingness to invest money in the product or services offered by the brand.


Customer engagement is considered to be successful if the customers buy the firm's goods or services. If the customers visit the store to check out the products and services, then it is not considered effective customer engagement. A similar related experience can happen online, where a customer can browse through a webpage without having any intention of purchasing a product. The best way to engage with the customers is through two-way interaction method by live chat. Customers can put forward the discussions with the representatives of the organizations. If there is an online path, then customer interaction can be easily carried out at any time of the day. Making sure that consumers get exact responses to their inquiries instead of routine lines from an FAQ list. The customer requirement has a direct correlation to customer engagement and loyalty. With increasing customer loyalty programs, the organizations can tailor their services to satisfy the customers and make them come back to the store.

Customer Engagement

Researchers and analysts have found a relation between the increase in customer engagement and noticed an improvement in cross-selling by 22 percent to nearly 50 percent. It also resulted in an increase in the size of the orders from five to eighty-five percent. However, the customer must be engaged throughout their entire lifecycle. Only then can they be truly positive supporters of a company's products and services. Business platforms know that finding ways to increase customer engagement is good for the bottom line. The engagement programs are not just for the customers who visit the store. It starts from the moment a potential buyer spots a mention of the particular store on the social media or hears about the product from a peer.

Customer Loyalty

Customer loyalty helps produce a greater demand for the product. Earlier, this consumer behavior was the determining factor for customer loyalty. Although this model was not perfect as it could not forecast the consumer's future behavior. This could not guarantee if the consumer would remain loyal or not. The model also helped analyze if the loyalty was due to the cashback schemes or reward points. It was also hesitant where these customers would be clients from the same company in the long run.

An HBR article that was published in the year 1995 showed how satisfied customers could also make issues and defects. Moreover, several researchers showed that customer satisfaction was not an ironclad feature on which the organizations could blindly rely upon. Another study showed that the closing rate of bank accounts for highly satisfied customers and lesser satisfied customers were affected equally. As a result, there was a low return on investment in trying to enhance and improve customer satisfaction aggressively. When the researchers included the emotional connection as a factor to connect the purchases, customer engagement came into light. After the recession in the year 2008, customers became very particular about the products that they spend their hard-earned money on.

Customer engagement requires the establishment of a connection with the customers in addition to providing much greater customer services. Moreover, for a company to maintain its relationship with its innumerable customers is an intimidating task.  Here is where repeated sales gain importance. Social media and online tools are used to maintain these relationships. Special attention needs to be given to the most gainful customers by offering customized benefits that are not available to the public.

Check out: Top Loyalty Management Solution Companies

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