Summary: A simple explanation of the difference between Customer Engagement and Customer Loyalty software
Many applications claim to engage the customer or focus on the customer experience. The words customer engagement are so overused that quality is likely the only thing claimed more often.
Equally confusing, Customer Engagement software is new. How new? The entire class of software is so new that many people don't even know it is a separate category.
It's helpful to look at how market leaders think about the separation between Customer Engagement and Customer Loyalty. Let's look to Starbucks who is a leader in both categories. Starbucks has a Customer Loyalty program called Starbucks Rewards. Starbucks has a new Customer Engagement program called Starbucks Odyssey.
Two different programs. Two different mobile applications. Two different purposes.
But why does Starbucks have two separate applications: one for Customer Loyalty and one for Customer Engagement? Why not combine them into one application?
How does the customer experience differ between Customer Engagement and Customer Loyalty? Let's look at a step-by-step comparison (over simplified for clarity).
Customer Loyalty in practice is focused on providing a reward for purchase. The general steps are:
Customer Engagement is a new practive that is focused on providing a reward for participation in the brand experience. The general steps are:
Let's look at running shoes as an example.
A Customer Loyalty program for running shoes might look like this:
What's missing? The points, rewards and discounts having nothing to do with actually using the product, nor does it help the customer achieve the outcome they want from the product. The customer is rewarded for buying the product, but not for using the product.
A Customer Engagement program for running shoes might look like this:
What's different? The Customer Engagement program rewards the customer for using the product and for participating in the brand experience. The customer is rewarded for buying the product, using the product and sharing the product experience with others.
Customer Loyalty programs have been around for a while and are a valuable tool. Customer Engagement programs, while new, add an extremely valuable new tool to improve customer and brand loyalty.
Hopefully this brief introduction to the differences between Customer Engagement and Customer Loyalty has been helpful. If you have any questions, please reach out to us at firstname.lastname@example.org.
Sentrix Labs is a Customer Engagement platform that helps brands build Customer Engagement programs that drive customer loyalty and brand loyalty.