If there’s one thing your company can’t survive without, it’s customer engagement. Engaging your customers as people is the single best way to show you care about them. 

Hosting events, sending personalized emails, and giving holiday discounts are all great engagement tactics. While these interactions may seem small, they can payoff with big rewards. An engaged customer represents 23% more revenue than an average customer, and acquiring a new customer can cost five times more than retaining an existing one.

If you’re staring down difficult competition, set yourself apart with customer engagement. For five reasons, it’s a great business strategy:

1. Builds brand awareness

Brand awareness describes how familiar someone is with your company’s values, products, and services. When they see you as an important part of their life, a customer is more likely to return that value to your company. 

Creating more brand awareness doesn’t have to be expensive. Nonprofit associations like BoatU.S. do a great job of engaging their customers inexpensively in a way that keeps their brand top of mind. The organization sends out monthly newsletters, as well as a bimonthly publication. Every issue shares recreational boating skills, DIY maintenance, safety tips, news, insight from experts, and lifestyle profiles.

Some brand awareness efforts that engage people are even free. Getting attention for your brand on social media is as simple as sharing entertaining content like videos, podcasts, blog posts and infographics. If you’re looking for a spendier, more meaningful option, you can also contribute to community causes, offer free samples, or provide on-site service

2. Generates social capital

Social capital is the value you gain from interpersonal relationships with other people. Connecting with your consumers and building rapport with them gives you both a boost of social capital.

Maybe your company offers digital marketing services. You might see an accounting firm advertising on TikTok, for example, and instead suggest they move their spend to LinkedIn ads. Simply reaching out with some free advice is a great way to build social capital. 

You can go a step further by following up with preferred customers in a personal way. Depending on the amount of business you do and your budget, you can follow up by writing personalized thank yous, meeting for coffee, sharing social media posts, or inviting them to company parties. 

When you help your customers crush their goals with your services, you better believe they will tell their friends about it. This social capital associated with referral leads improves conversion rates by 30%. Say “hello” to more business! 

3. Creates emotional investment

The big business push of this decade is the focus on data. But the truth is, every business partnership relies on emotional connection. 

The ability to make your customers feel something is the art of creating emotional connection. Maybe you engage in person with a lunch meeting or happy hour, or maybe you use social media. These investments won’t bring you gobs of instant revenue, but they will help customers see you as a person behind the business. 

Emotional investment is why Oreo’s social media efforts during the 2013 Super Bowl generated so much engagement. When the event experienced a power outage, Oreo capitalized on it rather than fall silent like the other brands. The Oreo tweet, “Power out? No problem. You can still dunk in the dark” went viral, with 14,200 retweets and more than 1,000 comments.

Did that social media post make Oreo any money? Maybe not, but it’s humor helped customers remember that someone was having fun behind the screen. 

4. Identifies switching barriers

A switching barrier is anything that might keep you from switching from one brand to another. 

These barriers can be financial costs associated with switching, like an early termination fee from switching from Verizon to AT&T. They can also be procedural, like the time it would take you to load your favorites and card information from the Starbucks app to the Dunkin’ Donuts app. Or, these switching barriers can be relational: You have a favorite employee that works at Chili’s, so you go there instead of Applebee’s.  

What is your switching barrier? Maybe it’s your client services team that answers phone calls from customers immediately. It could be the way your easy-to-use software tool customizes reports better than your competitors.

Whatever your switching barrier is, you can reinforce it by following up with clients. Find out why they’ve been so loyal. Ask them about things they like, things they would improve, and even things your competitors are offering that they wish you offered. Show them you care, and they’ll stick with you. 

5. Helps you home in on your target user

A perk of customer engagement is that it’s a feedback loop. When you engage your customers, you see all sorts of new opportunities to delight them.

You can’t please everyone, so it’s important to prioritize. Engaging existing customers encourages you to take the good, the bad, and the ugly feedback in stride. Saying “thank you” and making an effort to are great ways to demonstrate your commitment to them. That, in turn, helps you build better products and streamline your sales efforts. 

If you want to make money, you have to win hearts. Customer engagement encourages people to share your story, return your good deeds, and stick with you. It puts your product developers, marketers, and salespeople on a firmer footing, and for everyone, it makes business more fun.