customer engagement managers at meeting

Understanding Customer Engagement: What Does it Mean for You?

When we talk about Kapta, we talk about a tool and a process designed to build customer engagement.

So what do we mean by “customer engagement?” It’s a term that pops up all over the place these days, and it means different things to different people. So let’s take a closer look at how we define, demonstrate, and achieve customer engagement, and how doing so compares to other roles, such as Customer Success or sales.

Defining Customer Engagement

A brief internet search will show you that people define customer engagement all sorts of ways. This is understandable. Customer engagement is hard to define in absolutes, since it deals with the emotional connection between your customer and your company or brand, and looks slightly different in different industries. (For example, a retail brand is not going to define or measure customer engagement the same way a creative services consulting firm might.)

However, if you sift through many definitions out there, you’ll find 3 common, crucial elements:

  1. Customer engagement is rooted in ongoing, 2-way communication between a customer and your company
  2. Customer engagement creates a dynamic relationship that leads to lasting loyalty;
  3. Customer engagement can be measured against stated goals

At Kapta, when we distill and simplify those key elements, we say: Customer engagement is an ongoing, strategic relationship in which both parties succeed.

Don’t be fooled by the simplicity of that statement—it actually contains quite a bit of information. You can’t have an ongoing relationship without consistent, 2-way communication, in which your customers talk to you as much or more than you talk at them. Your relationship can’t be strategic if you’re more focused on selling what you offer than listening to what they need. And you can’t share success if you’re not dedicated to helping your customers achieve their business goals, and growing alongside them.

At the end of the day, something as nuanced and important as customer engagement is better demonstrated than defined. So let’s step away from theory for a minute, and give you a sense of what customer engagement looks like in practice.

Demonstrating Customer Engagement

One way we help our own customers understand the strength of their customer engagement is by asking a short list of questions, each designed as an indicator of customer engagement.

  • Do your customers reach out to you? Engaged customers will initiate conversations with you, reaching out whenever they face an issue or opportunity, rather than waiting for you to call. If you find you are always the one initiating contact, you may need to work on customer engagement.
  • Do you understand your customer’s big picture business goals? Understanding what your customer is ultimately trying to achieve means you’ve asked the right questions, and earned enough trust to get the right answers. And that means you’re more than just a vendor—you’re a comprehensive strategic partner. If you don’t have a clear idea of what your customer is trying to accomplish—not only as it relates to your products and services, but also beyond—you need to work on customer engagement.
  • Is your customer engaging with vendors who offer similar or complementary products and services? Even if they aren’t actively looking to replace you in your specific capacity, this is a bad sign. It indicates at the very least they aren’t aware of everything you could be doing for them. You’re missing opportunities for organic growth, leaving money on the table, and leaving yourself open to competitive threats.
  • Do your growth goals reflect what’s possible for key accounts? This is an interesting one. In a customer engagement model, your own growth goals should reflect what’s reasonable in the context of your customers, rather than imposing your company’s own goals onto customers who may or may not be able to support them. When you’re truly engaged with your customer, you have a detailed sense of how much room they have to grow with your suite of products and services, and you can ground your growth goals accordingly.
  • Are you experiencing high customer churn? This is a no-brainer. If you’re losing customers left and right, they aren’t engaged with you. Of course, by the time this is happening, it’s pretty late in the game.

In summary, the questions we ask are designed to give you a sense of the strength of your customer engagement. If your client is reaching out to you regularly; if they call you when they’re facing an issue or opportunity; if they share with you the bigger context for what they’re doing; if you are confident in their satisfaction and your future with them, and if you’ve built your own sales goals accordingly, then you are doing customer engagement right.

Achieving Customer Engagement

So how do you get there? At Kapta, we believe customer engagement is the end product of a customer-first culture and process, executed by a dedicated team of account or client service professionals.

Let’s pick that apart for just a second. First, you need a company-wide culture and a set of internal processes that puts customers first. This has to happen at the company level, because it has to be reflected in every function at your organization. It affects who you hire, how you train, how you measure performance, what products and services you offer, how you plan for growth, and more. The companies with the highest level of customer engagement are those that prioritize their customers, full stop.

Second, you need a team of professionals dedicated to building and strengthening client relationships. Traditionally, this has been called account management, key account management, or client services. There are different titles here, and different potential department names, one thing is key: This is distinct from the sales team, or at least a distinct group within the sales team. Because yes, client services professionals drive revenue, but their focus isn’t generating new leads or chasing quotas—it’s partnering with high-value customers to foster lasting, loyal relationships that can’t help but drive revenue over the long term.

And finally, you need a purpose-driven process and tools to support customer engagement. CRM and sales tools cannot do this for you. Neither can customer success tools. And neither can an ad-hoc collection of various communication, presentation, project management, and billing tools. To understand which tools you need, let’s look at some key differences between customer engagement, customer success, and sales.

Customer Engagement vs Customer Success

Let’s start with some areas of overlap between customer engagement, as we define and use the term, and customer success. In both instances, customers need to feel successful with your products/services/company. They need to use your products and services to their full (or close to full) capacity, and they need to see real value from the time they invest in you.

Now, let’s talk about some of the differences:

  • Scale: Customer Success tends to apply to companies who are largely product focused, and who rely on a large number of low touch customers. Customer engagement is about developing strong relationships with a smaller number of high-value accounts.
  • Measurement: Customer Success is measured largely by recurring subscriptions, whereas Customer Engagement is more nuanced—in addition to renewing contracts and increasing SOW, customer engagement takes into consideration the overall strength of the relationship.
  • Tools: Customer Success is heavily data-driven, mining customer’s data to measure their use of any given product, particularly SaaS products. Customer Engagement, though it certainly involves strategic use of metrics and data, requires tools that provide a comprehensive view of customer relationships beyond what numbers alone can provide.

Customer Engagement vs Sales

Again, let’s start with similarities. Customer Engagement and Sales are both about driving revenue through the products and services your company offers. The main difference here is how, and where the team’s focus lies.

In sales, the goal is to generate new leads, driving revenue by increasing the customer base. The goal may also be to upsell or cross-sell a large number of existing customers. In contrast, Customer Engagement drives revenue through organic growth, gradually increasing the scope and longevity of existing, strategic, high-value clients. We’ve written in detail before about how sales differs from Key Account Management, and why you need purpose-built tools for each. We’ll simply recap here that CRM tools are excellent for generating new leads or managing a high volume of low-touch customers, but they don’t provide the framework and visibility you need to build an ongoing, highly strategic relationship with any given, high-value client.

Conclusion: Benefits of Customer Engagement

Hopefully by now the benefits of Customer Engagement are pretty clear. Customer Engagement creates lasting, loyal, strategic partnerships that not only help secure your existing revenue from a key account, but also provide a platform for growth. Engaged, satisfied customers are more likely to invest in premium products and services, and more likely to continue to work with you when things go wrong (as they sometimes will).

Customer Engagement also helps reduce the risk and cost of customer churn. Customers today are easier to lose than ever before, and companies who win will be the ones who make customer engagement a priority.

To learn more about how Kapta can help you build real customer engagement, schedule a demo today. And if you have thoughts on what customer engagement means to you, get in touch and let us know.

Alex Raymond
CEO at Kapta
Alex Raymond is the CEO of Kapta.