The Importance of Customer Engagement on Your Shopify Store

You may have probably heard about the term “customer engagement” as it is a buzzword among online retailers. Obviously, improving customer engagement on your Shopify store is important to retain your shoppers and keep them coming back to your website.

It’s no secret that customers are the lifeblood of your business. Yet most online shops don’t bother to engage customers in this way. Instead, they concentrate on getting as many sales as possible from as few customers as possible.

The key to successfully running an ecommerce store is to focus on keeping your customer engaged, which means making their experience delightful. It means listening and learning from them – not what they want or need.

What is customer engagement?

Customer engagement is the process by which a company gains the loyalty, trust, and interest of its customers. It consists of four main elements: listening – recognizing your needs and informing you about available offers and services; responding – providing information and updates when your issues are handled; retaining – making sure your needs are addressed consistently and transparently, and facilitating – making the buying experience as easy as possible for the customer so they continue using your business.

Why customer engagement is important?

Customer engagement is the process of building, growing, and retaining a loyal audience. It takes place on every page of your business’s website and involves all of your employees. Engagement improves search engine rankings, improves customer retention, and creates a positive customer experience that drives repeat purchases. An engaged audience is more likely to tell others about your company and recommend it to their friends.

Fully engaged customers provide for a 23% higher share of profitability, revenue, and relationship growth.

How to measure customer engagement

You can’t run a successful Shopify store if you don’t measure the customer engagement on your website. You can calculate customer engagement in many ways, that's why we're giving you a head start by emphasizing the most crucial indicators to begin with.

Visitor checkout rates

Visitor or guest checkout rates are the number of customers who purchase from your store without creating an account.

You can calculate it using the following formula:

Number of orders completed by a visitor / total number of orders

You might think, why is it important to measure? Customers who create an account on your website are more likely to return for another purchase.

Purchase frequency

Purchase frequency is used to measure how often customers purchase from your online store.

You can calculate it using the following formula:

Number of orders placed in the past 365 days / number of unique customers in the past 365 days

So why is it important to measure purchase frequency? You'll have a better idea of how engaged a client is if you know how long it takes them to make another purchase.

Average order value

Average order value (AOV) is the average amount that your customers spend when making a purchase on your online store.

You can calculate it using the following formula:

Total revenue over the past 365 days / total number of orders placed in the past 365 days

This metric can help you find out how much an average customer spends on your website. In fact, it was found that repeat customers spend 67% more than one-time purchasers.

Repeat purchase rate

Repeat purchase rate (RPR)  is the percentage of customers who’ve made more than one transaction on your online store within a certain period of time.

You can calculate it using the following formula:

Number of customers that bought more than once / total number of customers 

Your repeat purchase rate offers you a clearer picture of the efficacy of your whole retention strategy because it informs you how many consumers are engaged enough to make more than one purchase on your online store.

Now you may start thinking about methods to increase your consumer engagement since you've got a solid foundation.

How a loyalty program can improve customer engagement?

A loyalty program can be one of the most effective ways to improve customer engagement. When customers have a strong connection to a company, they spend more. Studies have shown that the average customer expands their spending by more than 10% when offered a free present or bonus. A loyalty program can both grow your revenue and keep customers loyal by giving them valuable benefits outside of the purchase itself. Below are four benefits of a loyalty program that everyone should consider implementing into their business.

Reward your customers with loyalty points

There are many reasons to keep your customers happy, and one of the best ways to do it is by rewarding them for their loyalty. Rewards programs can be offered in the form of gift cards, coupons, or in the form of points – which can be used at any store that offers rewards. Customers who have a special requirement can also be rewarded with points. When you offer rewards, make sure you are making it easy for your customers to take advantage of them! 

Customers love being a part of a loyalty program so much that they often actively seek out opportunities to become a member. When a customer becomes a member, they have a better chance of getting special offers and discounts throughout their lifetime. Customers love the idea of earning cashback for spending and can use their points to purchase merchandise online or from brick-and-mortar stores.

Encourage engagement through social media

Engagement is key to driving traffic and leads to your online store. Social networks are places where people share content and information. If you post frequently and share things that are relevant to what your customers care about, you’ll create a connection that will help you connect more deeply with them. Learning how to use social media for content is key to creating a relationship with your audience that lasts.

Social media is where most new businesses start their customer relationships with prospects, and this is where your business should be focusing its efforts. Make sure you aren't losing customers through a lack of engagement on your social profiles and your website.

You can boost engagement on your social media by rewarding you a customer for being active followers. For instance, run a contest with prizes such as coupons, rewards, or free products that your shoppers can redeem on your website.

Turn your loyal customers into influencers

When customers refer other customers to you, you form a powerful network. That means your brand gets more exposure and can grow faster than if you tried to market yourself all by yourself. Here's how to encourage your best customers to share your brand with referrals:

1. When you have a customer who's ready to buy, ask them if they want to remain on your referral list. 
2. If they say yes, then ask them to help share your business with their friends – either through their social networks or directly through emailing their friends about what you offer.
3. Once they refer a friend to your website - reward your loyal shopper with incentives such as coupons, free gifts or cashback.

Wrapping Up

Customer engagement plays a significant role in every online store when determining whether the marketing strategy is working out successfully. However, we hope that after clarifying some of the important aspects of calculating customer engagement you can build a successful strategy for your online store. Let us know what strategies you use in your store in increasing customer engagement!