Understanding the different types of customer engagement models and how to choose the right one for your business
24/01/2023Charles Kergaravat
Table of contents
For any business to succeed, building a solid and long-lasting relationship with its customers is vital. Engaging with customers in a meaningful and effective manner fosters customer loyalty, retention, and advocacy in addition to helping to grow sales. But it can be challenging to decide which customer engagement model is best for your company when there are so many options available.
In this article, we will explore the different types of customer engagement models, as well the benefits and challenges of each model, and provide tips on how to measure their success. By the end of this article, you will have a clear understanding of why customer engagement is important, how to choose the right model for your business, and how to effectively implement it to boost customer loyalty, retention and ultimately drive your business growth.
What is Customer Engagement Model ?
A customer engagement model is a comprehensive strategy that companies use to foster positive interactions and build long-lasting relationships with their customers, with the ultimate goal of enhancing the customer experience. It outlines the actions and approaches a company can take to increase customer loyalty and retention by understanding the needs and preferences of their customers, and tailoring the company’s products and services to meet those needs.
By creating positive interactions and building a strong relationship with customers, companies can improve the overall customer experience and increase customer satisfaction and retention. The customer engagement model is an essential aspect of creating an optimal customer experience.
When it comes to customer engagement, there is no one-size-fits-all approach. Different types of customer engagement models focus on different aspects of the customer journey, and choosing the right one for your business depends on your customers’ preferences and your business goals.
In this section, we will explore different types of customer engagement models including High-Touch Models, Low-Touch Models, Retention Models, CSM-driven Retention Models, Automated Retention Models, Collaborative Product Roadmap and Hybrid Models.
We will also provide real-world examples of how businesses are using these models to improve customer engagement and drive success. By the end of this section, you will have a better understanding of the different types of customer engagement models and how to choose the one that’s right for your business.
High Touch Models
This model focuses on personal, one-on-one interactions with customers, often through phone or in-person interactions. For example, Ritz-Carlton Hotels & Resorts uses a high-touch model, with a dedicated team of concierges that provide personalized service to guests, from making reservations to arranging transportation.
Low Touch Models
This model uses technology to automate customer interactions, such as through chatbots or email campaigns, with minimal human interaction. For example, Zendesk uses a low-touch model, providing customers with a self-service platform that allows them to find answers to common questions and solve problems on their own.
Retention Models
This model focuses on retaining current customers by identifying their needs and tailoring the company’s products and services to meet those needs. For example, Netflix uses a retention model, by providing personalized recommendations to customers based on their viewing history, to keep them engaged with the platform.
CSM-driven Retention Models
This model uses a dedicated team of customer success managers (CSM) to identify and address issues that may lead to customer churn. For example, Salesforce uses a CSM-driven retention model, assigning a dedicated CSM to each customer to ensure their success and prevent churn.
Automated Retention
This model uses technology, such as AI or machine learning, to identify customers at risk of churning and take automated actions to retain them. For example, Spotify uses an automated retention model, by analyzing customer listening habits to identify those who are at risk of canceling their subscription and sending them personalized recommendations to keep them engaged with the platform.
Collaborative Product Roadmap
This model involves working closely with customers to understand their needs and incorporating their feedback into product development. For example, Trello uses a collaborative product roadmap model, by soliciting feedback from customers on a regular basis and incorporating their suggestions into the development of new features.
Hybrid Models
This model combines different types of customer engagement models, depending on the specific stage of the customer journey. For example, a bank may use automated email campaigns to send account updates and promotional offers to customers, but also have a team of human representatives available for customers who prefer to speak with someone over the phone.
Choosing the right customer engagement model
Deciding on the right customer engagement model depends on a variety of factors, including your customers’ preferences and your business goals.
Here are a few steps you can take to determine which customer engagement model is right for your business:
Understand your customers
Understand your customers’ needs, preferences, and behaviors. This will help you determine which type of engagement model will be most effective in building positive interactions and relationships with them.
Define your business goals
Identify your business objectives, such as increasing customer loyalty, improving customer retention, or increasing revenue. This will help you determine which engagement model will best support those goals.
Analyze your current engagement
Take a look at your current customer engagement strategy and assess its effectiveness. Identify areas where improvement is needed and consider how a different engagement model may address those issues.
Consider your resources
Consider the resources you have available, including time, budget, and personnel, and how they will impact your ability to implement a particular engagement model.
Test and iterate
Once you’ve chosen a customer engagement model, test it and gather feedback from your customers. Use this feedback to make adjustments and improve the model over time.
It’s important to note that not all engagement models are a good fit for all businesses, and there’s no one perfect engagement model. You may need to test and experiment different models to find the one that works best for your business and your customers.
Personalization in Customer Engagement Models
Personalization is important when selecting a customer engagement model because it helps create a more tailored and relevant experience for customers. It can be achieved through a variety of means, such as segmenting customers based on their demographics, behavior, or preferences, and then tailoring the engagement experience to meet their specific needs.
Here are a few reasons why personalization is important:
Improve customer satisfaction: Personalization helps customers feel understood and valued, which in turn improves their satisfaction with the engagement experience.
Boost customer loyalty: Personalization can help build stronger relationships with customers, leading to increased loyalty and repeat business.
Increase conversion rates: Personalized messaging and offers are more likely to be relevant and appealing to customers, which can increase the chances of conversion.
Greater customer insights: Personalization can help businesses gain a deeper understanding of their customers and their needs, which in turn can inform product development and marketing strategies.
Save resources: Personalization can help businesses avoid the “spray-and-pray” approach, by targeting the right message to the right customer at the right time, which can save time and money in the long run.
Personalization is a key aspect of customer engagement, and it should be considered when choosing a customer engagement model. It allows businesses to create more relevant and meaningful interactions with customers, which can lead to improved customer satisfaction, loyalty, and conversion rates.
Pillars of a successful Customer Engagement Model
Once you have chosen the best customer engagement model for your business and start executing, it is important to not forget that customer engagement is built on three key pillars:
Execution: This pillar is the foundation of the customer relationship. It includes the ability to provide a wide range of communication channels, ensuring consistency across those channels, making digital tools user-friendly, and providing prompt and appropriate responses to customers. This is considered a basic requirement by customers. According to study from theHarvard Business Review, consumers spend more money for each extra channel they utilize. Particularly, compared to customers who only use one channel, omnichannel clients spend 10% more online and 4% more in-store.
Link: This pillar is the first level of differentiation for companies. It encompasses providing transparent information, using clear explanations, offering personalized support, and involving customers in the company’s future plans. When executed successfully, this pillar allows companies to increase customer commitment and contact opportunities, which can lead to increased loyalty and growth.
Emotion: This pillar is what sets the most successful customer relationships apart. It involves recognizing and rewarding customer loyalty, creating positive surprises, and treating each customer as a unique individual. By strengthening the emotional aspect of the relationship, companies can differentiate themselves and build the customer relationships of tomorrow.
Conclusion
In conclusion, customer engagement models are an essential part of any business’s customer experience strategy. They help businesses understand and interact with their customers in ways that are most relevant and effective for both parties. Start yourcustomer experience transformationby selecting the right customer engagement model to increase customer satisfaction, loyalty, and conversion rates, and lead to better customer insights.
When choosing a customer engagement model, it’s important to understand your customers, define your business goals, analyze your current engagement, consider your resources, and test and iterate. Personalization is also an important aspect to consider, as it helps create a more tailored and relevant experience for customers.
It’s also important to note that an omnichannel approach should be considered when selecting a customer engagement model. Omnichannel means that businesses are able to interact with their customers across multiple channels and platforms, such as in-person, phone, email, chat, social media,video chatand more. An omnichannel approach allows businesses to meet customers where they are, and provide a seamless and consistent experience across all touchpoints. This can help businesses build stronger relationships with customers, increase loyalty and conversion rates, and improve the overall customer experience.
In summary, an effective customer engagement model is an essential part of any business’s customer experience strategy. It should be chosen based on a variety of factors, including customers’ preferences, business goals and resources. Personalization and an omnichannel approach should also be taken into account to improve customer satisfaction, loyalty and conversion rates and to provide a seamless and consistent customer experience.
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