10 Results-driven customer engagement models

Customer engagement models are essential to build a thriving business. It’s no longer enough to offer a great product or service. Customers expect personalized experiences and meaningful interactions with the companies they do business with. 

Companies must use different engagement models catering to their unique needs and customer preferences to achieve this.

This article will explore ten engagement models and provide insights on maximizing each to boost customer satisfaction and loyalty.

What are customer engagement models?

A customer engagement model is a framework or strategy organizations use to interact with customers, build relationships, and encourage them to become loyal. 

They help businesses create a positive customer experience at every stage of the customer journey, from the first point of contact to the final purchase.

According to a Salesforce survey, 80% of customers say a company’s experience is as important as its products or services. This highlights the crucial role of customer engagement in building brand loyalty and driving above-average business results.

Stages in customer engagement and the customer journey

These are the main engagement stages related to the different steps of the customer journey:

• Unaware
• Problem aware
• Solution aware
• Product aware
• Fully aware

Each customer engagement model is organized according to the stage of the customer in his journey. This will make it easier to adapt your marketing strategy to target your clients with the right materials. 

Here is an overview of the most common customer engagement models according to where your clients are in the sales funnel:

Unaware-stage engagement models

At this stage, the customer is unaware of the brand or its products/services. The main ways to engage your potential customers now include outbound marketing, influencer marketing, and content marketing. 

1. AIDA model (awareness, interest, desire, action)

The AIDA model was designed to guide marketers in creating effective advertising campaigns. While it may have been effective in the past, it is now considered outdated and oversimplified. 

Modern customer engagement models focus on a more holistic and personalized approach that considers the customer’s journey and individual needs and preferences.

Benefits:

• The AIDA model focuses on customer psychology by acknowledging that customers go through a cognitive process before purchasing.
• This helps marketers to understand the customer’s mindset and create messaging that resonates with them.

Drawbacks

• It oversimplifies the customer journey by breaking it down into only four stages. In reality, the customer journey is more complex and dynamic.
• Since it was developed before the widespread adoption of technology, it doesn’t consider the impact of technology on the customer journey.

2. RACE model (reach, act, convert, engage)

Smart Insights popularized this digital marketing model, which consists of four key stages: reach, act, convert, and engage.

Benefits:

• The RACE model provides a structured framework for businesses to plan and execute their digital marketing strategies.

Drawbacks:

• The four stages outlined in the model cannot fully address more complex marketing needs.
• It may not be suitable for businesses in certain industries or with more specific target audiences.

Aware-stage engagement models

During this stage, the customer is aware of the brand and its products or services but is not yet interested in purchasing. During this stage, you should use the following marketing strategies: retargeting, social media engagement, email, and SMS marketing.

3. AARRR customer engagement model

The AARRR engagement model is a framework businesses use to understand and optimize their customer engagement strategies.

It consists of five main stages – acquisition, activation, retention, referral, and revenue – representing the customer journey from initial contact to ongoing loyalty.

Benefits:

• A comprehensive approach to customer engagement that covers all the stages of the customer lifecycle, from acquisition to retention to referral.
• Measurable metrics for each stage of the customer journey make it easier to track progress and identify areas for improvement.
• A strong emphasis on revenue generation is important for businesses looking to grow and succeed in the long term.
• A focus on the needs and wants of the customer rather than the needs of the business – customer centricity.

Drawbacks:

• The model is often criticized for being too simplistic and not considering the complexities of customer engagement.
• It may not be suitable for all types of businesses or industries, as it focuses primarily on online and e-commerce businesses.
• It may also lack the flexibility to accommodate different customer engagement strategies, as it’s designed to follow a linear path from acquisition to revenue.
• While the model does include a retention stage, it doesn’t place enough emphasis on this critical aspect of customer engagement.

4. USP model (unique selling proposition)

The USP customer engagement model is used by businesses to identify and promote their unique value – the feature or benefit that sets their product or service apart from competitors.

This model is focused on highlighting the unique value proposition of a product or service to attract and retain customers.

Benefits:

• Clear differentiation: The USP model helps businesses identify and articulate their unique selling proposition, which can help them stand out from competitors and attract more customers.
• Consistent messaging: By focusing on ONE unique selling proposition, businesses can develop clear, consistent messaging that resonates with customers.
• Increased sales: A strong USP can help businesses increase sales by communicating the value of their product or service in a way that resonates with customers.
• Focus on customer needs: The USP model requires businesses to identify and prioritize customer needs, which can help them develop products and services that better meet customer demands.

Drawbacks:

• Limited scope: The USP model focuses primarily on the features and benefits of a product or service, which may not be enough to engage customers in today’s highly competitive marketplace.
• Narrow focus: By focusing solely on a unique selling proposition, businesses may overlook other important factors contributing to customer engagement, such as customer service or user experience.
• Difficulty in identifying a unique selling proposition: In some industries, it may be difficult to identify a unique one, making it challenging to develop a strong USP engagement strategy.
• Limited emphasis on retention: While the USP model can help businesses attract new customers, it may not place enough emphasis on customer retention, which is critical for long-term success.

Discovery and onboarding engagement models

The customer actively seeks more information about the brand and its products or services during this stage. Engage them with live chats, onboarding emails, and detailed product demos. 

5. High-touch model

A high-touch model is a business approach that emphasizes personalized and customized interactions between a company and its customers. 

In this model, the company seeks to provide high service and attention to each customer, to build long-term relationships and loyalty.

Benefits:

• By providing personalized attention, companies can better meet the needs and preferences of individual customers. This leads to higher levels of satisfaction and loyalty.
• Customers who feel valued and appreciated are more likely to continue doing business with a company over time, leading to increased loyalty.
• A company that provides high-quality, personalized service will likely have a strong brand reputation in its industry.
• Satisfied customers are more likely to make repeat purchases and recommend the company to others, which can help drive revenue growth.

Drawbacks:

• Providing personalized attention to each customer can be more labor-intensive and, therefore, more expensive than other business models.
• The high-touch model may be difficult to scale as a company grows, as it requires significant resources to maintain personalized attention across a large customer base.
• If different customers receive different levels of attention or service, this can lead to inconsistencies and a lack of standardization in the customer experience.
• To provide the level of service required in the high-touch model, companies must employ highly skilled and knowledgeable staff members, which can be difficult and expensive.

6. Low-touch model

The low-touch model emphasizes minimal direct interactions between a company and its customers. In this model, companies aim to automate as much of the customer experience as possible, using technology and self-service options to reduce the need for human interactions.

These models are particularly well-suited for SaaS companies because they allow businesses to scale their customer acquisition efforts without incurring significant overhead costs.

Rather than relying on a large team of salespeople to close deals, SaaS companies can use internal sales representatives or automated sales funnels to convert leads into paying customers. This approach goes well with the product-led growth optic many SaaS companies use to reduce their sales costs while still maintaining a high level of customer satisfaction.

Benefits:

• By automating many aspects of the customer experience, companies can save on labor and other operational expenses.
• The low-touch model can be more easily scaled as a company grows, as automated processes can handle more customer interactions.
• Automated processes can provide a consistent customer experience, reducing the potential for inconsistencies and errors arising from human interactions.
• Processes that require zero human interaction can be faster and more efficient, thereby reducing wait times and improving the overall speed of the customer experience.

Drawbacks

• By relying on automated processes, companies may be unable to provide the personalized attention that some customers desire.
• The low-touch model may not provide opportunities for meaningful customer interactions, which can limit the potential for building strong customer relationships.
• Some customers may prefer human interactions and may be dissatisfied with the level of automation provided by the low-touch model.

7. Hybrid model

The hybrid model combines elements of both the high-touch and low-touch models to create a customized customer experience. Companies seek to balance personalized attention and automation to meet each customer’s individual needs and preferences.

Benefits:

• The hybrid model allows companies to adapt to each customer’s individual needs and preferences, providing personalized attention when needed and automation when appropriate.
• By providing a customized customer experience, companies can increase customer satisfaction and loyalty, increasing revenue and growth.
• This model allows companies to streamline their operations by automating certain processes while maintaining a high personalization level.
• It can be scaled as a company grows, as automation can handle more interactions while allowing personalized attention where necessary.

Drawbacks:

• Hybrid models are more complex than single models. They require more effort to develop and implement, making them difficult to use in some applications.
• Since hybrid models combine multiple models, they require more computational resources. This can make them slower and less efficient than single models.
• Since they combine multiple models, they can be difficult to interpret. Determining how each model contributes to the final result can be challenging.
• Hybrid models require more effort to train and maintain than single models. The multiple models that make up a hybrid model need to be updated and maintained, which can be time-consuming and expensive.
• While a hybrid model can reduce overfitting, it can also increase the risk of overfitting if the models are not properly combined. If the models are too similar, the hybrid model can become too specific to the training data, resulting in overfitting.

Post-onboarding engagement models

The customer has already purchased the brand’s products/services and is using them. The most effective ways to maintain their interest include loyalty programs, customer feedback requests, and extensive personalization. 

Ensure all customer engagement models align with your goals, resources, and user preferences. This will help build strong customer relationships, increase sales, and create a competitive advantage.

8. Automated retention

The automated retention model can be an effective way for companies to keep their new hires engaged and productive after onboarding.

However, companies need to balance the benefits of automation with the need for personalization and human connection.

Benefits:

• Automated retention strategies can ensure that all new hires receive the same level of engagement and support, regardless of their location or department.
• By automating aspects of the engagement process, companies can save time and resources while still delivering effective support to their new hires.
• As companies grow, they can use automated retention strategies to keep up with the increased demand for engagement and support.

Drawbacks:

• These strategies can be less personal than traditional engagement approaches, which may make some new hires feel disconnected from the organization.
• Companies that rely too heavily on technology may miss the benefits of face-to-face interactions and other forms of human connection.
• Implementing an automated retention model may require a significant investment in technology and other resources, which may not be feasible for all organizations.

9. Collaborative product roadmap

The collaborative product roadmap model is based on the idea that new hires can bring fresh perspectives and ideas to the product development process.

Companies need to balance the benefits of collaboration with the need for efficiency and effectiveness in product development to build a more engaged and motivated workforce.

Benefits:

• Companies can increase their engagement and motivation by involving new hires in developing the product roadmap.
• New employees may feel more invested in the company and its products, which can lead to increased productivity and job satisfaction.
• By working together on the same product roadmap, new hires can build relationships with their colleagues and better understand the company’s culture and values. 
• New employees can bring fresh ideas and perspectives to the product development process, leading to innovative solutions and better products.

Drawbacks:

• Involving new hires in developing the product roadmap can be time-consuming, which may not be feasible for all organizations.
• New employees may not have the same experience and expertise as seasoned team members, which may limit their contributions to the product roadmap.
• Collaborative product development can be a complex process, and there is always a risk of conflicts arising between team members.

10. CSM-driven model

This customer engagement model ensures customers achieve their desired outcomes when using a product or service. 

Customer success managers (CSMs) work closely with customers to understand their goals and needs and develop strategies to help them succeed.

Benefits:

• The CSM-driven model improves customer satisfaction and retention rates by focusing on the customer’s success.
• CSMs act as the main point of contact between the customer and the company, ensuring a clear and effective communication channel.
• CSMs anticipate and solve potential problems before they occur, leading to a more proactive approach to customer service.
• By helping customers succeed, the CSM-driven model can increase revenue through customer loyalty, retention, and referrals.

Drawbacks:

• The CSM-driven model can be more expensive to implement than other models because of the need to hire and train customer success managers.
• Identifying customer goals, developing strategies, and monitoring progress require significant time and resources.
• It may not suit all businesses, especially those with low-touch or low-value customers.

Which model is right for your business?

By implementing one or more of the ten customer engagement models outlined in this article, companies can foster deeper connections with their customers, enhancing their satisfaction levels. 

From personalization and community building to co-creation and advocacy, every company can find the right fit for its target audience and build a loyal customer base to drive long-term success.