Capillary acquires US-based Brierley+Partners    Read more >

Capillary named a Leader in SPARK Matrix™: Customer Loyalty Solutions, Q2 2024 Report     Read more >


Digital Transformation

Marketing and Engagement

Customer Engagement Strategies for 2020 & Beyond

In today’s world, a customer is accosted by brands at every step he takes. Every direction he turns in, he either sees brands or a product that’s screaming for his attention. This has led to a hyper-competitive market across every industry – be it food delivery, fin-tech, e-commerce, or retail. Customer engagement is what makes or breaks a business in such a fast-paced, heavily commodified market.


Aishwarya Raman

4 Min Read

August 20, 2019

In today’s world, a customer is accosted by brands at every step he takes. Every direction he turns in, he either sees brands or a product that’s screaming for his attention. This has led to a hyper-competitive market across every industry – be it food delivery, fin-tech, e-commerce, or retail. Customer engagement is what makes or breaks a business in such a fast-paced, heavily commodified market. 


This was not always the case. When brands were emerging in each of their sectors, the rate of competition was relatively low as reigning brands had a monopoly over the markets they chose to make their presence felt at. The range of products (and product innovations) that were available to consumers was also fairly narrow, so the businesses often took on a ‘take it or leave it’ attitude. 


In short, we are witnessing the rapid shift from ‘brand-centric’ business philosophy to that of a ‘customer-centric’ one.


In today’s world, a brand that does not engage with customers or a brand that doesn’t cater to all of the customers’ needs are instantly dismissed and forgotten forever.


Impact of Customer Engagement on Revenue 


A study by Hall & Partners suggests that two-thirds of a brand’s profit may be dependent on consumer engagement. To put that into perspective – take e-commerce giant Amazon. In April, Amazon reported revenue of $59.7 billion dollars. That would mean 2/3rd of that amount is roughly $8.95 billion dollars. Amazon is a classic example of superior customer engagement strategies can fend off intense competition to build long-lasting customer loyalty, even in markets where they faced off against well-entrenched competitors.  


Furthermore, research from Gallup has revealed that a fully-engaged customer represents 23% more revenue than an average customer. These are numbers a business cannot afford to ignore. It goes to show that if your company doesn’t have a solid customer engagement strategy, you could be missing out on opportunities to convert an occasional/visiting customer into a loyal, returning customer, hence effectively building a relationship with them in the long run. Building customer engagement is also a great way of building the customer’s trust in the brand. Trust and loyalty are intangible, yet invaluable assets for a brand to possess. 


Top Customer Engagement Strategies


  • Lush Cosmetics’ Social-first Strategy: Lush Cosmetics leverages its social media channels, especially Instagram, to engage with customers directly. This enables them to directly address customer grievances, acknowledge when a customer mentions them in their social media handles and also enables them to answer any queries they might have.
  • Ulta Beauty’s Insights-led Engagement Strategy: Ulta Beauty’s biggest asset was its customer insights. They closely studied them and created accurate personas of their consumers to narrow down on their preferences and needs. These analysis and insights led to the launch of their one-stop-shop for ‘all things beauty’ – an all-inclusive store that stocked both high end and affordable drugstore products under the same roof to improve the customer’s buying experience.


Latest Trends in Customer Engagement


  • Voice Search: Thanks to the likes of Apple’s Siri, Amazon’s Alexa and Google Home, consumers are becoming increasingly accustomed to having a way of literally, directly speaking to a company. Future-first brands will need to understand and analyze the potential engagement opportunities in voice search to stay ahead.
  • Socially Conscious Brands: Customers are more likely to be drawn to a brand if they feel that the brand is socially responsible. A study titled “From Me To Us: The Emergence Of Purposeful Brands” was conducted on December 2018 period more than 30,000 consumers participated in the study and 62% of those who were surveyed said they wanted companies to have meaningful stances on social-cultural and environmental issues. While we agree that being socially conscious is more of a brand philosophy than a customer engagement strategy, it’s impossible to ignore the fact that these brands spark more conversations and positive word of mouth which directly boosts the overall engagement levels.
  • Predictive Engagement: It’s one thing to speak to a consumer when they reach out to you, but it can be a game-changer when a company reaches out to a consumer, having anticipated his/her needs. The time is now for companies to be proactive and use data mining and AI-powered customer analytics to predict customer needs and preferences even before he/she reaches out to the brand.  Additionally, the convenience that you offer to the customer will boost loyalty and make your brand more sticky.


The Future of Customer Engagement


The Third Edition of the State of Sales report has some interesting insights on what a customer expects from businesses in the future


  • 75% of customers expect companies to use new technologies to create better experiences. With the emergence of connected devices and smart technologies, it’s not just an expectation, but it’s a given that a brand has to keep up.
  • 62% of customers are open to the use of AI to improve their experiences — up from 59% in 2018.
  • 59% of consumers agree that AI will revolutionise how they engage with a business.

Why is engaging with a consumer and improving his experience so crucial? 


A CISCO report titled “Customer Experience in 2020” reveals that 70% of purchasing decisions that customers take, will be based on their consumer experience. Another Freshworks customer engagement report states that, in comparison with the last two years, in 2019, 47% of consumers worldwide have higher customer service expectations from their favourite brands.


A part of the reason for this is because in the future, thanks to easy access to information, potential customers will be more aware than ever. This awareness will also help them pick and choose between the brands that best live up to their expectations. In fact, the same Freshworks report points out that in the last 12 months, more than 56% of customers globally, switched brands after just one bad customer service experience.


Due to these factors, the big future trend in customer engagement will be omnichannel communications. For brands, being an omnichannel business is no longer an option – in the future, it is compulsory in order to be able to match up to and exceed customer expectations.


If you have any questions or queries, don’t forget to drop a comment, and we’ll get back to you.

Aishwarya Raman

Product Marketing-Content at Capillary Technologies

Aauthor Name

Aishwarya Raman

Product Marketing-Content at Capillary Technologies

Similar Articles

We asked ChatGPT and Loyalty Experts- What are the Top Mistakes that Brands Make

by Jubin Mehta

December 12, 2022 | 3 Min Read

As a part of the Loyalty Masterclass with Capillary, we’ve

B2B Ecommerce Trends that Make B2B Loyalty Important

by Vritti Mishra

April 2, 2023 | 4 Min Read

As reported by McKinsey, nearly 65 percent of B2B companies

Propensity Models: Capillary’s Secret Sauce for Marketers to Predict Consumer Behavior

by Jubin Mehta

November 16, 2022 | 4 Min Read

Propensity Models are AI & ML algorithms that help marketers

Contact Us

Get the best loyalty &
customer engagement platform out there!
  • Design industry shaping loyalty programs
  • Integrate easily and go live quicker
  • Deliver hyper-personalized consumer experiences
Request A Call
    [shield-notbot-nonce] => 9f260e77c5
    [wp-wpml_current_language] => en