What are Customer Engagement Models? Definition, Types & Best Practices

In the highly competitive business landscape of the early 21st century, creating a high-quality product or offering a sought-after service is not enough to hit it big. Enterprises poised for business success should go to all lengths to resonate with their audiences and involve them in active interaction with the brand. Such efforts will render little outcome if they are undertaken as random steps and haphazard actions. You can reach out to your clientele and build a strong and lasting rapport with them only within a comprehensive customer engagement framework where a robust engagement model is a centerpiece. 

This article contains a detailed manual that explains what a customer engagement model is, highlights its importance and benefits, lists core components and types of such models, gives advice on selecting the right model for your use case, and outlines the best practices for creating a compelling engagement model. 

What Is a Customer Engagement Model?

A customer engagement model is an engagement strategy harnessed by businesses to build and maintain relationships with their current and prospective clientele. Its overarching goal is to increase client acquisition, conversion, and retention by ensuring an ultimate experience across all customer touchpoints and at every step of their customer lifecycle — from the first contact to post-purchase support. When consumers receive such an experience, they not only stay with the brand but also recommend it to their family, friends, and colleagues. In fact, 68% of them are even willing to pay more for a product or service if their CX is excellent. 

At first sight, a superb customer experience comes naturally if an organization’s employees perform their responsibilities well. However, their dedication and commitment may be insufficient without an effective engagement model in place. 

The Importance of Customer Engagement Model

Thanks to the dominating globalization drive, modern consumers have no limits in accessing any product or service they need if it tickles their fancy. In the conditions of the contemporary oversaturated markets across all major verticals, the availability and even quality of goods can become a competitive differentiator only once. As the classical sales funnel, known as the AIDA scheme, shows, Attention, Interest, Desire, and Action may not necessarily lead to Engagement. If a company fails to keep a one-time buyer and lets them take their money to a rival for the next purchase, its business prospects are bleak. To address the issue, engagement mechanisms come into play.

The major premise of a customer engagement model is the recognition that waiting for a person to engage is a passive approach that doesn’t hold water from a business perspective. Instead, enterprises should be proactive in studying customer behavior, collecting feedback, gauging customer satisfaction, offering support, optimizing channels for interaction and marketing, and leveraging data-driven insights and campaign analytics to continuously monitor campaign performance, fine-tune their approaches, and improve practices. 

When wisely chosen and skillfully implemented, a customer engagement model ushers in various advantages for an organization that onboards it. 

Benefits of the Customer Engagement Model

As vetted experts in retention marketing and churn prevention, we see the following perks of employing customer engagement models. 

Increased Conversion Rates

Instant responses to customer queries, reliable support, and proactive steps aimed at solving consumers’ problems accelerate their decision-making and encourage leads to convert into prospects and then into customers. 

Augmented Customer Loyalty and Satisfaction

Customer engagement models help entrepreneurs better understand their clients’ needs, preferences, and pain points. Companies utilize the received information as predictive insights in their personalization initiatives, driving customer satisfaction and fostering loyal clientele eager to come back for more.

Higher Customer Retention

Happy and engaged customers feel unique and valued. That is why they don’t consider jumping ship and seeking a vendor elsewhere. Their satisfaction is the bedrock for forming a stable consumer base, keeping churn rate to a minimum, and reducing the need for constant new customer hunt. 

Improved CLV

Customer lifetime value is a vital KPI that displays the revenue a single client brings as long as they buy from a company. The more engaged a person is, the more money they spend. Besides, they spend more time exploring additional products and auxiliary services, which increases cross-selling and upselling revenue-generating opportunities. 

Now that you realize the assets a customer engagement model brings, it’s time to learn about its elements. 

Customer Engagement Model: Key Components to Include

A well-thought-out engagement model rests on six pillars:

• Understanding. You can’t find a way to a customer’s heart unless you know them inside out. That is why the departure point for building a model is creating a 360-degree image of your target audience with all their demographics, behaviors, aspirations, needs, and problems.
• Goals. You should clearly define what final result you plan to get by implementing the model. Is it enhancing customer lifecycle management, boosting brand loyalty, increasing CLV, or improving other engagement parameters?
• Customer journey mapping. By tracing an omnichannel customer journey, you see the entire path a consumer treads, from the initial touchpoint to post-purchase communications with you. The journey map should contain milestones, potential bottlenecks, and engagement opportunities. 
• Touchpoints. If you opt for omnichannel engagement (which is what most modern enterprises do), you should establish the scope of touchpoints — email, phone, website, social media, mobile app, etc. — you will leverage to liaison with your clientele. This is important since interaction with customers via each channel has its specifics.
• Strategies and tactics. These include various methods and ways you utilize while engaging with your clients. The most typical ones are personalized interactions, tailored marketing campaigns, targeted content creation, proactive support, and others.
• Data and insights. The major deliverable of an engagement model is the collection of customer data that undergoes a comprehensive analysis, yielding valuable insights into your client base. Armed with them, you can segment audiences into categories and deal with each piecemeal. 

The content of these components varies depending on the model type. 

Zooming in on the Types of Customer Engagement Models

Organizations have several customer engagement models to choose from. 

USP Model

This customer engagement model stands for Unique Selling Point — features, characteristics, and benefits of your product that set it apart from similar goods by competitors. If your product possesses them, this model is what the doctor ordered for your use case. Just identify your clients’ pain points and manifest how your brainchild can address them. The model is perfect for attracting new consumers, but it does nothing to retain them. Besides, in some sectors, a USP may be hard to establish.

High-Touch Engagement Model

It relies on one-on-one interactions with consumers (demo calls, personal onboarding, dedicated sales, individual assistance through special representatives, and more). The model allows every client to feel appreciated and valued. However, it better suits organizations offering big-ticket goods (often in the B2B sphere) with a long buying cycle, since it is rather resource-consuming and has a very limited scalability potential.

Low-Touch Engagement Model

It is everything the previous model is not. Instead of personalized communication, this scheme is honed for nurturing large groups of consumers of low-price products with a short buying cycle. The model doesn’t allow you to reach out to each customer and forge a strong bond with them, but you can leverage automation and self-service solutions (for instance, chatbots) on a large scale. Evidently, this model is a godsend for small businesses and startups. 

Automated Retention Model

Being a variation of the previous model, this one relies on automated tools programmed to be triggered by certain events, like growing churn indices or a high number of customer support queries. Then, specific scenarios are automatically launched, sending messages, surveys, or feedback requests to the clientele. Once set up, this model doesn’t require any manual interference or fine-tuning; however, it may appear too impersonal or aloof to the people you try to engage with.

Customer Segmentation Model

This customer engagement model is perfect for businesses with multiple use cases and/or diverse consumer audiences. It involves dividing the entire customer base into narrow categories and tailoring your engagement strategies to match each group’s unique characteristics. If you select segmentation criteria correctly (demographics, income level, geography, behavior patterns, purchasing history, customer journey stage, etc.), you can provide relevant experiences for every cluster and attain high satisfaction within it. Since it requires numerous personnel on the payroll, this model’s employment in low-value product niches is hardly viable.

Customer Success Manager Model (CSM)

The last observation is true for this model as well. It focuses on getting to know customers closely to understand their needs and devise bespoke strategies for addressing them, thus helping your clientele succeed. Certainly, you should have a large and well-trained workforce to do that, which low-margin businesses can't afford. However, if you cooperate with high-profile customers, this proactive approach to customer engagement will enable you to increase profits through customer retention, loyalty, brand advocacy, and referrals.

Collaborative Product Roadmap Model

In it, you invite consumers to participate in improving, tweaking, and amending a product. Usually, it is done via a customer-facing roadmap where people are asked to contribute their ideas, vote up or down on some features, and give their take on the product’s functionalities. This is a perfect way to show consumers that their voice matters and create goods that dovetail with consumers' expectations and tastes. The chief downside of this approach is excessive reliance on people's opinions who may not understand how to solve their problems best. 

Hybrid Model

As you can guess from the name, it combines elements of high-touch and low-touch models or sometimes more specific schemes (such as RACE and AARRR models). On the one hand, it adds flexibility and scalability to your customer engagement efforts, letting you enjoy the best of several approaches. On the other hand, hybrid models are more complex, harder to implement, and require more computational resources. 

Given such a multitude of variants, how can you opt for the most suitable choice?

Tips on Selecting a Customer Engagement Model

As seasoned specialists in the realm, Reteno advises you to consider the following factors while picking an engagement model:

• Business goals. Increasing revenues requires one engagement model, whereas improving customer loyalty or reducing churn is best handled by another.
• Customer segmentation. Exclusive customers shopping for pricey products should be engaged via the high-touch model, while the low-touch model is a better fit for average buyers with moderate purchasing potential.
• Product cost. For inexpensive goods, automated and low-touch models work well, whereas big-ticket items require the employment of CSM or high-touch models.
• Resource availability. You should assess your budget and workforce to determine whether you can afford more personalized engagement or if cost-efficient approaches are sufficient. 
• Scalability. Future-proofing is a vital consideration when choosing a customer engagement model, which should be able to scale up in tandem with the growth of the customer base.
• Competitive landscape. In extremely competitive niches, only a high-touch model can become a differentiator. If the competition is moderate, other models will suffice.

Once the choice is made, you can boost a customer engagement model’s efficiency by leveraging the best practices of creating and using them.

Customer Engagement Model Best Practices

A customer engagement model will bring maximum value if you:

• Personalize interactions. 73% of customers enjoy being treated as individuals rather than a group, which means you should tailor messages, support, and recommendations based on people's individual data, exposing their preferences and tastes.
• Provide omnichannel support. To better oblige your clients, you should offer them as many interaction channels as possible, including phone, email, website, chat, social media, and more, and ensure a consistent and seamless experience across all of them.
• Listen and react to feedback. Setting feedback loops helps gather insights continuously, expose changes in customer needs, reveal trends, and monitor key metrics (customer satisfaction, engagement scores, retention rates, etc.).
• Reward loyalty. You should introduce loyalty programs to reward frequent customers and provide incentives for those who give feedback, post reviews, discuss your products and services on social media, and refer you to their environment. 
• Develop a consistent brand voice. All your messages across different touchpoints should use cohesive language, style, and tone that reflect your brand identity and values.
• Incorporate social media. In a world where people lead not only physical but also virtual lives, ignoring social media is a felony. 
• Consider conversational marketing. Move away from the old-school one-way interaction with the clientele and engage in a two-way dialogue to listen to their opinion and guide them through the customer journey.
• Test and iterate. The chosen engagement model is not carved in stone. You should check the efficiency of its methods, introduce adjustments, and improve it over time to stay tuned to customer behavior dynamics and industry trends.

As you can see, developing viable customer engagement models involves many niceties and nuances. That is why it is wise to delegate this process to seasoned professionals in the niche. We at Reteno have all the necessary skills and experience to help you rivet your audience's attention and maintain it. Book a demo to begin our partnership and elevate your customer engagement to a new level.

Final Thoughts

A customer engagement model is an all-embracing strategy businesses employ to forge lasting relationships with their clientele. There are different types of such models, but they all include components such as understanding the audience, setting goals, customer journey mapping, establishing touchpoints, developing engagement methods, and leveraging data. If you select a proper model and consider the best practices for using it, your enterprise will increase conversion rates, reduce churn, improve CLV, and boost customer satisfaction and loyalty. However, developing and implementing an efficient customer engagement model is best delegated to qualified specialists.