Why D2C Startups Need To Focus On Customer Engagement For Growth

SUMMARY

In the recent past, 11 of the most prominent D2C Indian startups witnessed an average year-on-year revenue surge of more than 200%, according to Inc42 Plus

Brands that engage customers on a regular basis have higher brand recall and more avenues to drive repeat purchases

Companies who have improved engagement increase cross-sell by 22%, drive up-sell revenue from 13% to 51%, and also increase order sizes from 5% to 85%

As more Indians embrace the convenience and safety that comes with shopping online, time is ripe for home-grown Direct-to-Consumer (D2C) brands to take the center stage. In the recent past, 11 of the most prominent D2C Indian startups witnessed an average year-on-year revenue surge of more than 200%, according to Inc42 Plus.

While the opportunity for business growth for D2C brands is abundant, there is also increasing competition with newer players arriving in the market, coupled with traditional brands going the D2C way. Naturally, the consumer is spoilt for choice, and capturing their attention isn’t all that it’s going to take to achieve steady business growth.

In addition to acquiring new customers, which is a key piece in the growth puzzle, you need to realise the importance of customer engagement in retaining and nurturing your customer base to convert them into your brands’ loyalists and evangelists.

So, What Is Customer Engagement?

In the most simple terms, customer engagement refers to the level of interaction that a customer chooses to have with your brand, across their lifecycle. This could be on your own digital properties, across social media, or even over email.

Measured by the degree and depth of the interaction which the customer performs, consistently engaging your customers on the channel and medium of their preference can help you build and strengthen your relationship with them, beyond just the regular business transactions.

Finding ways to add value to your customers’ overall experience with your online store can help you drive more valuable engagements more often.

Importance Of Customer Engagement: Why Should You Care?

While it’s a no-brainer to guess that having engaged customers can be great for a business, especially in the long-term, its impact on your business’s growth is actually far-reaching and quite undervalued.

According to Gallup research, a highly-engaged customer results in 23% more revenue than average. It, therefore, makes sense to invest wisely and generously over engaging your customers through their journey.

Makes Your Brand Stand Out In A Sea Of Competitors

As the barriers to entry for launching an online store become lower and lower, almost every other D2C category has seen a rise in the number of available vendors. And surely, this number is bound to grow further. So, the real differentiator you have out there is your brand and the relationship it builds with your customers.

Brands that engage customers on a regular basis have higher brand recall and more avenues to drive repeat purchases. One research found that “…companies who have improved engagement increase cross-sell by 22%, drive up-sell revenue from 13% to 51%, and also increase order sizes from 5% to 85%.”

Helps Increase Lifetime Value And Reduce Churn

With the ever-rising cost of customer acquisition, it really isn’t sustainable to grow while spending all your marketing budget on getting new customers. With a solid customer engagement strategy, you can devise ways to keep in touch with your customers in between purchases, ultimately improving lifetime value and reducing churn.

Serves As A Key Component In Your Brand’s Customer Experience

Gartner points out, “When it comes to making a purchase, 64% of people find customer experience more important than price.” And customer engagement sits rightly at the heart of delivering a great one. Every interaction that your customer has with your business, on any channel or medium, should be consistent with the values that your D2C brand stands for.

Also Read: Here’s How India’s D2C Marketers Are Moving Beyond Cola Wars And Social Responsibility To Deliver Purpose

Long-term Customer Engagement Strategies For D2C Startups

If you do it right, building a solid customer engagement model for your brand isn’t all that complex. With the plethora of great tools out there, engaging customers across their lifecycle has become easier than ever. Below, we talk about some of the indispensable customer engagement strategies that can work wonders for your brand.

Get To Know Your Customers Better

To quote the late cofounder of Apple, Steve Jobs, “Get closer to your customers. So close that you tell them what they need before they realise it themselves.” Any great brand is built when customer obsession becomes an ingrained part of your company’s culture.

But, at the same time, it’s a maxim easier said than implemented, especially given that not long ago, it would require a wealth of customer data to be able to generate insights that help you get closer to your customer.

However, with the advent of MarTech and tools like ecommerce CRM, savvy businesses have been able to leverage the goldmine of customer data, to get deeper insights into their customers’ behavior.

By investing in one, you enable your online store to gather customer data by tracking their website activity, buying history, personal information, and a lot more, and have access to in-depth customer awareness at all times. Through which, engaging your customer becomes a whole lot easier.

Offer Assistance At Every Step Of The Way

Let’s face it, despite how informative or detailed you make your product pages or FAQ sections look, a lot of shoppers still require assistance while they’re browsing your store. In one survey by Forrester, 44% of respondents said that they prefer having a live person answer their questions during their online purchase.

While it could be because our brains are hardwired to have human communication to elicit trust, or that it’s just easier to solve internal conflicts while shopping, offering live support to your shoppers to help them make informed decisions goes a long long way.

Surprisingly, about 92% of customers prefer live chat against other channels, such as phone, email, and social media, making it a must-have in your customer engagement strategy.

To help you boost your D2C brand journey with customer engagement solutions, Freshworks is offering $10,000 worth of credits to Inc42 Plus Members. Activate Now!

Ace Your Customer Service Game

“After one negative experience, 91% of customers will never do business with that company again,” according to a research. And the stat isn’t really sobering, especially in this day and age, when one bad customer experience can spread on social media like wildfire and wreak havoc for your brand.

Keeping this in mind, it becomes obvious for you to provide unparalleled customer service to your customers, right where they are — be it phone, live chat, email, social, messengers, and more.

With new-age customer engagement software out there, the world is your oyster when it comes to the level and depth of great experiences you can provide to your shoppers.

From using AI and bots to pulling in context from their association with you to deliver a more personalised experience, this is one aspect of your customer engagement model that you want to be sure of.

Enable Your Customers To Provide Feedback

Do you happen to know what champions eat for breakfast? You guessed it, it’s feedback. And it just couldn’t be more true for your online store.

Sure, you’re trying to address all or any issues or pain points your shoppers and prospects might have, but your guess is only as good as anyone else’s. Unless you hear straight from the horse’s mouth, you’re going to shoot in the dark and hope something sticks.

And it’s not just about collecting feedback, in your customer engagement strategy, be sure you lay emphasis on the learnings and implement the same in your offerings. Otherwise, your customers will feel that you only pretend to listen, while you actually should.

Set Up A Rewards And Loyalty Programme

In a survey by HubSpot,79% of consumers said that loyalty programs make them more likely to continue to purchase from a particular brand, and 66% even went on to agree that they modify their brand spends to maximize loyalty benefits.

These numbers shouldn’t surprise you, given that rewards and loyalty programs are one of the most effective customer engagement strategies. Once a customer enrolls for yours, they are going to consider you as one of their go-to choices, while also making it easier for you to drive their interaction and association with your brand.

So, in order to get customers excited to engage with your brand, formulate a customer loyalty program that instantly gets them on-board. Make sure you promote it well enough, and you’ll be sure to see your engagement metrics shoot up.

Surely you’ve come across how Starbucks does it, or Chaayos if you wanna look closer to home. By offering rewards for every purchase and store visit respectively, they maximise customer loyalty and create a cycle of repeat purchases.

Nudge Guest (And Window) Shoppers To Sign Up

Consider this: you’ve got the ideal shopper to land on your store. They’re interested in your product offering, have resolved their queries on your live chat, and check all other boxes you’d like them to check, except one. They don’t want to purchase right now.

Surely, this imaginary shopper will bounce off your store, and might never return. But if there was a way you could have nudged time to sign up to create an account with you, a lot more could have happened: wishlisting the product for purchasing it later, adding it to the shopping cart, you being able to get in touch with them and send personalised offers, and so on. You get the drift.

There’s a reason why leading ecommerce companies such as Amazon, Flipkart and Myntra track user behavior and interactions across their properties. The overall quality of the experience that you could provide to a shopper who has an account with you is something that makes all this effort worth it.

Create Content That Adds Value To Your Audience

One of the best ways to keep your customers, and audience (read: prospective customers) engaged is to constantly create and deliver content that they’d be interested in. Your audience has decided to engage with you for a purpose, make sure you’re making it worth their time.

To get started, make sure your social media isn’t just a bunch of updates that your prospects could have done about, it should be a reflection of how passionately you believe in the products you offer to your customers. No matter the category you are in, go far and beyond to cover topics that your audience would be interested in.

One D2C brand that does it well is The Whole Truth (formerly And Nothing Else). On their blog and newsletter, they write about all things related to health, from food to fasting to fitness, and not just their product, which, by the way, are clean, preservative-free protein bars.

Invest In Building A Community

One thing that many consumer brands fail to leverage to its fullest is the potential of treating their social media followers and subscribers as a community. A community of fans who’ve decided to engage with your brand, and believe in your vision.

Given that your online store would be catering to a particular niche, it only makes sense for you to build a closely-knit community to foster two-way communication. Having a strong presence on social media isn’t just important to have in your customer engagement strategy, it’s essential. Homegrown D2C brands such as Plum, The Man Company, and the likes, they’ve all done quite well at building communities around their brands.

Be Sure To Catch The Customer Engagement Train

It’s 2020, and the importance of customer engagement cannot possibly be overstated. The millennial consumer does not expect, rather demands a customer experience that is relevant, delightful, and memorable. If you want your Brand kingdom to flourish, acquiring new customers might be king, but customer engagement is the queen you can’t have a prosperous kingdom without.