Customer engagement software is a modern invention that takes care of a modern problem. After all, it wasn’t until the rise of the internet that media became democratized, and the one-way communication model between companies and customers was shattered. From the rubble, a new dynamic emerged (the same one we know so well today): organizations spoke to customers and customers held the power to reply.
Greater consumer power brought forth a new reality for companies. Businesses that listened to and connected with customers online were rewarded with consumer engagement in the form of clicks, mentions, subscriptions and more. But how were companies to manage, track, and convert an ever- growing number of interactions into revenue? The answer for many businesses was customer engagement software.
Today, if you google ‘Customer Engagement Software’, you’ll find that the top results are lists of the best customer engagement tools on the market. The problem is that these lists aren’t composed of the top 10, or even the top 20 customer engagement platforms — Capterra’s list currently features 100 platforms, and Software Advice boasts over 400.
The density of these lists isn’t Capterra or Software Advice’s fault. The fact is that there are many customer engagement platforms on the marketplace. The term ‘customer engagement software’ alone encompasses a wide variety of services, which results in pages that lump together very different types of solutions. This makes it difficult for customers to shop for the software that would be most appropriate for their business.
This blog post aims to demystify customer engagement software by identifying the kinds of engagement tools that are out there, and what these tools are good for. In doing this, we hope to make shopping for a customer engagement software solution easier and less overwhelming for our readers.
Exploring a Broad Term: What Is Customer Engagement Software?
From customer relationship management (CRM) software to knowledge base and social media tools — it almost seems harder to find a software solution that isn’t considered a customer engagement tool than one that is. As CRM thought leader, Paul Greenberg puts it: “When it comes down to it, most of the [vendors] in this market may call themselves customer engagement companies, but [they] don’t compete with each other because their products are so different … There is no definition to this emerging market yet.”
While there may be a wide range of vendors hitching their products to the “customer engagement” buzzword, these software solutions do share a common broader theme. Ultimately, the umbrella of customer engagement technology covers any software that helps businesses manage and/or foster customer communications and interactions (i.e. engagement).
These software solutions can help organizations meet customers at any number of vital touchpoints, such as through live chat, social media, self-service, marketing, and more. Most importantly, they aim to personalize customer interactions throughout the entire customer lifecycle.
Why Is Customer Engagement Software Important?
With the popularization of the internet, customers began to transition from occupying physical to virtual spaces. This change had a huge impact on how businesses treated customer engagement, and eventually resulted in the creation of customer engagement software.
Before the internet revolution, customers occupied physical environments and played a passive role in corporate strategizing. Engagement consisted of a direct interaction between the company and its current customers — usually on the company’s terms (such as when businesses reached out for input on product testing and development). With the rise of virtual environments, customers became active participants in the conversation and partners in the innovation process.
Unlike physical engagement, virtual engagement prompted a continuous back-and-forth dialogue between companies, customers, and customers-to-be. This put power into the hands of the consumer, and lead businesses to focus in on the customer experience
The beauty of virtual spaces is not only the establishment of a different, more customer-centric corporate culture: customers’ footprints are now easier than ever to map and transform into revenue. Feedback is easier than ever to collect, and customer demands (although ever-growing) are becoming easier to identify and meet.
Today, companies understand the power of customer engagement. According to Gallup, there are three types of customers:
- Fully Engaged — Customers who are loyal to a product, and who serve as true brand ambassadors.
- Indifferent — Customers who have a neutral, “take it or leave it” attitude towards a company and their products.
- Actively Disengaged — Customers with no emotional attachment to a company, who will easily switch brands and actively antagonize brands that cause them difficulties.
Engaged customers are the most profitable customers, and help companies achieve crucial business outcomes. Gallup’s findings show that “a customer who is fully engaged represents an average 23% premium in terms of share of wallet, profitability, revenue, and relationship growth compared with the average customer. In stark contrast, an actively disengaged customer represents a 13% discount in those same measures.”
Customer engagement tools help businesses make the most out of customer engagement by facilitating the process of tracking, stimulating, and analyzing customer behavior and sentiment. Companies can then use customer engagement data to enhance their engagement strategies, program smarter marketing automation, deliver more personalized customer service, and better meet customer needs.
It’s important to note that not every piece of customer engagement software does the same thing. Some software solutions specialize in one single touchpoint or area of customer engagement — such as through social media, marketing, the company website, live chat, etc. Others may have tools that allow companies to partake in multichannel or omnichannel customer engagement.
Different customer engagement tools may also address different stages of the buyer’s journey, collect distinct information, and provide companies with different technology and features for interacting with and monitoring customers.
What Customer Engagement Software Tools Are There?
If there are so many types of customer engagement tools, what are they? And what makes them different? These are common types and functions of customer engagement software:
Before customer relationship management (or CRM) software was invented, companies used lists and spreadsheets to categorize customers and manage contacts. Nowadays, CRM software allows business to easily manage their relationships with customers and the information associated with them in an online database.
Modern CRM software aims to integrate and automate 3 key functions: sales, marketing, and customer support. To do this, CRM software tools collect and store key information about customers, such as:
- Contact details (customer names, locations, phone numbers, mailing and email addresses, )
- Contact history (what type of contact have your customers made? How many times they have reached your company? How did they find your website? What were the nature of their inquiries?)
- Accounts (do they have an account? If so, what kind? Do they have a special status, i.e. gold member, ?)
- Past sales (what did they buy and when? How many purchases have they made? Were they online or in-store purchases?)
- Previous marketing efforts (are they on an emailing or mailing list? If so, what promotional material has been sent out to them?)
When pooled together, this information makes up a database of all the transactional, navigational, and support-based contact that a customer has had with a business, effectively summarizing that customer’s relationship with the company. By analyzing customer interaction metrics, CRM software solutions can identify leads, focus customer retention efforts, analyze the performance of marketing campaigns, and grow sales.
CRM software stores customer data from various channels — such as email, brick and mortar stores, and the website — in one central location: ideally the cloud. From the cloud, customer data is accessible in real time to users from different departments, from any device.
In past years, CRM has faced another change: from traditional to social CRM. This change means that not only does CRM software collect and store customer data from direct interactions such as email and phone — most CRMs now collect data from customers on social channels as well. This data has applications in marketing, customer service, and sales: it allows companies to track brand awareness, changes in consumer sentiment, and other information that wouldn’t be readily available without the use of social media.
Recently, developers have seen a demand for industry-specific CRM software solutions. These solutions tailor the CRM model to fit the needs of businesses in specific industries such as restaurants, governments, freelancers, and more.
Just like how no two customer engagement tools are exactly alike, no two CRM software solutions offer the exact same features and functions. While many CRMs strive to combine sales, marketing, and customer support, some CRMs cater more closely to a particular function. Hubspot, for example, is a very sales-focused CRM — meanwhile other CRM software solutions exist just to serve customer service teams, with no sales or marketing functionality.
While your typical CRM software does not directly engage with customers, it does collect data that ensures that the marketing, sales, and customer service teams will have an easier time of doing so. That being said, many popular CRMs now also provide solutions with a direct focus on customer engagement. Other CRMs can be integrated with third party customer engagement software solutions to boost customer engagement and maximize lead converting capabilities.