Did you know that engaged customers bring 37% more revenue than customers who are active but disengaged? Or what if we told you that engaged customers generate an average 23% higher share of wallet, profitability, revenue, and relationship growth compared to average customers? Interesting, right?
The key thing to remember is that having an engaged customer base is a critical factor in improving customer retention and satisfaction. Having a strong customer engagement program increases your lifetime customer value, makes your customers happier, and allows you to improve your product more quickly.
However, to engage your customers effectively, you need to identify proactive tactics that will drive engagement and maintain customer relationships. To do so, you must implement a customer engagement model for your SaaS company. But you might be wondering… what is a customer engagement model? What is it used for? Why is it so important?
Today, we’ll answer all of these questions and more, including:
- What is a customer engagement model?
- Why are customer engagement models important?
- The different stages of customer engagement
- Different types of customer engagement models and how to choose the right one
- The right customer engagement model for your business
What is a Customer Engagement Model?
A customer engagement model allows businesses to build and maintain long-lasting relationships with their customers. These models aim to improve customer experience, increase conversions, and improve customer retention and lifetime value. All of these factors ultimately lead to an increase in revenue.
To achieve their purposes, customer engagement models apply strategies across all teams, such as training, onboarding, proactive support, and other resources to improve customer engagement and success.
It’s interesting to point out that having an engaged customer base can directly affect your Net Retention Rate (NRR). Just a quick reminder of what it is here: According to the Customer Success Box, NRR is an indicator that depicts the profits and the revenue earned by the business. The more engaged your customers are, the less likely they will churn and, as a result, increase revenue.
Why are Customer Engagement Models important?
Customer engagement models are one of the most important strategies for creating a solid customer base for your SaaS business.
Implementing strategies to create long-term relationships with your users through a customer engagement model will allow your company to establish your brand as trustworthy and reliable. This model will help you understand what your customers think and feel about your business, all the way from lead to conversion.
The information you can access through this model is crucial. You can then use this insight to tailor your marketing initiatives to your customers’ needs and how they react to different features and pitches. This is why a successful customer engagement model directly impacts customer retention. To learn more about retention and engagement, we recommend you to read our recent blog post, Engagement vs. Retention in SaaS: what are the main differences?
So, how can you implement a customer engagement model? What are the different stages of customer engagement? Let’s find out.
The different stages of Customer Engagement
To conduct a successful customer engagement model, you must follow five different stages.
Unawareness is when a customer doesn’t know much about your product or service. To attract your potential users, you must create content and build a brand to capture users’ attention and raise their awareness. If you want to establish trust with consumers, brand awareness is essential.
To create brand awareness, it’s essential to recognize different target audiences, their preferences, and interests, to create appropriate content.
The discovery stage is when a user finds out about your product or service. At this point, you’ll need to create content according to their interests or needs. To do so, you can collect information about their roles, companies, industries, and more. Consider it this way: the more you know about a potential user, the more targeted your approach can be to suit their needs.
The consideration stage is when the user starts to think about purchasing the product and considering other options (competitors). In this stage, you need to ensure that every interaction a user has with your company is positive and differentiate yourself from your competition. You can increase your chances of winning new customers by using testimonials and case studies from existing customers.
Here is when you’ve convinced the user to convert and subscribe to your SaaS product. However, things don’t end here! The conversion stage is when you need to create a successful onboarding experience for the user to understand the value of your product. A successful onboarding process includes resources and active support to help customers incorporate your product into their workflow.
5. Ongoing engagement
After your new customers are onboarded and up and running, your goal is to drive increased engagement and make your solution an integral part of their daily work. Keep your eye on your customers’ feedback and manage it effectively, which will help you and your team understand what matters most to them. Remember: keeping your customers engaged and happy will reduce churn.
Different types of Customer Engagement Models and How to Choose the Right one
Now that you know what engagement models are, why they are important and the different stages of customer engagement, let’s discover the different models and how to choose the one you need.
First of all, you need to understand that there are two main categories of customer engagement models: onboarding models and retention models.
As their name implies, the onboarding models are implemented at the beginning of the relationship with the user. Depending on the nature of your product and your pricing strategy, there are different onboarding models you can use:
- High Touch model
High-touch models are dedicated to high-cost products. Since the product is more expensive, the onboarding process should be more comprehensive and include more resources. High-touch models usually include live interactions, live online or in-person training, omnichannel support, and a multi-step onboarding plan.
- Low Touch model
Low-touch models are usually simpler than high-touch models. These refer to onboarding solutions for lower-priced products with a high volume of new users. Low-touch models usually include one-to-one interactions, general training, and limited resources.
- Hybrid models
The hybrid model is the most common one. In this strategy, companies combine high-touch onboarding techniques with low-touch onboarding strategies.
The retention models are designed to keep your customers. These models should include proactive communication, engagement, understanding of the customer relationship, its favorite features, and usage. There are different retention models:
1. CSM-Driven Retention Models
CSM-driven retention models are strategies implemented for high-touch models. These strategies are personalized to each user and work directly with them to ensure they get value from the product.
2. Automated Retention
Automated retention models are less complex than CSM-driven models. Retention models with automated features monitor customer engagement and satisfaction, as well as provide education and support.
3. Hybrid Retention Model
As said before, the hybrid model is a combination of automated retention and CSM-driven retention strategies.
Choosing the right customer engagement model can take time and effort after analyzing all the options available. To do so, consider your product’s nature, needs, and pricing strategy. After that, you’ll be able to choose the best solution for your company.
The Right Customer Engagement Model for your business
Customer engagement models are a great way to ensure your company’s growth and success. Through it, your customers will be happier and, as a result, they’ll stay with your company.
Today, we’ve covered interesting points about engagement and explained to you the different types of models for your business. However, each company has a different product and customer base. For this reason, it’s important to choose the best model for you. A customer engagement model that works will make your customers happier, help you retain and increase lifetime value, and help you improve your product faster.