The Cost of a Bad Engagement Rate and How It Affects Your Bottom Line

July 23, 2021 • Written by Camera IQ

Are you responsible for driving revenue and increasing profitability? Have you taken a look at your engagement rate lately? Believe it or not, that’s a great place to start. In fact, statistics show that if you’re not investing in improving your engagement rate, your bottom line is taking a hit. Even more important: you can bet that your competitors are taking customer engagement seriously. Are you?

The Value of Building Trust

It all comes down to trust. Engaging authentically with customers builds trust in your product, company, and brand. Building trust in turn builds loyalty. And that loyalty results in less churn and more business.

According to Salesforce research, “trust bears considerable business influence — from customers’ loyalty to spending.” Customers not only spend more of their time with brands they trust — they are also “more likely to advocate on their behalf.”

Simply put: the success of your business depends on trust —and a proven way to build trust is through successful customer engagement.

Engagement is a key ingredient in the customer experience. Research shows that 80% of customers identify the experience a company delivers as being just as important as the products and services it provides. Your business success is tied to the quality of the customer experience people get from your company. Companies that provide unique and memorable experiences will outpace their competitors. That includes finding ways to deliver meaningful customer engagement.

75% of Millennials/Gen Zers say that instant, on-demand engagement is very important to winning their business. (Salesforce)

Brands that excel at customer engagement provide experiences that inspire, inform, and entertain their audiences. These audiences not only enjoy the brand interaction, but are eager to share their experience with others. Companies that do customer engagement right not only grow their brand and build customer loyalty — they drive more revenue. (Forbes)

The Cost of a Low Engagement Rate 

What happens to brands that fail to invest in engagement? They risk losing existing customers, failing to attract new ones, and lost opportunities for conversion. A well-planned customer engagement strategy, one that includes cohesive and immersive experiences, has proven to pay off.

72% of internet users worldwide said a disconnected experience would make them change service providers or brands. (eMarketer)

Given these realities, and “despite the immense financial impact engaging with customers can have, some companies are still not doing it.” (Forbes) Your customers want and expect you to engage with them consistently across channels. Your bottom line improves when you meet this expectation. Your competition is ready to serve the customers you lose by failing to heed this imperative. When it comes to engagement, doing nothing does damage.

There’s a direct and proven correlation between the level of customer engagement and business profitability. Studies show that companies who improve engagement can increase cross-sell revenue by 22%, up-sell revenue by 38%, and order size by 5% to 85%. (Forbes)

For any company with an online presence, improving engagement rate can be a small lift with massive returns. Studies have shown that increasing engagement rate can lead to an increase in likelihood to buy, actual order size, customer loyalty, and up-sell and cross-sell opportunities. There isn’t another singular metric that can be tied to improving every stage in the sales funnel.

The Benefits of Investing in Engagement 

Engagement builds trust, builds advocates, and builds business. True engagement is about creating a host of exceptional, personal, and cohesive experiences across channels. Improving how you engage with customers delivers many business benefits (Quickbooks), including: 

  • Reducing churn rates
  • Shorter purchase cycles
  • Stronger brand identity 

Worried that your customers will abandon you for a competitor? Find ways to nurture customer relationships with personalized experiences to reduce the potential for churn. 

Finding it difficult to close deals? Let consumers experience your products virtually and see your brand’s active engagement with audiences on a consistent basis.

Sweating the noisy marketing environment? Make your brand stand out from the crowd with a unique approach to communicating who you are and why people should care.

There’s proven value in focusing on the customer experience from start to finish:

  • Customer-centric companies are 60% more profitable than companies that don’t focus on customers.
  • Brands with superior customer experience bring in 5.7 times more revenue than competitors that lag in customer experience.
  • 84% of companies that work to improve their customer experience report an increase in their revenue. (Forbes)

Social media is an increasingly relevant channel for companies in any industry vertical. Brands are experimenting with new technology on social platforms to create meaningful experiences that stand out from the competition and reach new audiences at every stage of the sales funnel

Brands that consistently create new types of thrilling and informative opportunities for audiences to engage will win out over the competition. Gartner recommends brands “get creative with customer engagement, especially on social media” and reach target audiences where they are spending their time. One powerful opportunity to engage audiences on social media is through AR experiences. Giving your audience the ability to interact with your brand and the ability to share that experience with others is what makes social AR so successful.

Engagement rate improves with social AR experiences.

How AR Improves Engagement Rate

When it comes to competing for customers, the game has definitely changed. Companies are not competing against better products — but better experiences. One way to create unique experiences that customers actually enjoy and love to share with their social networks is with AR technology. Creating memorable, immersive AR experiences is a proven strategy for improving customer engagement. 

AR technology increases customer engagement by 66%. (Big Commerce)

AR both engages current customers and attracts new ones. AR has the power to generate real confidence in brands and about their products. With 3D product visualizations and virtual try-ons, customers can experience a product virtually in their own environment. Exciting AR experiences are more likely to be shared by consumers, magnifying your campaign’s reach. People are even willing to spend more on your product if your campaign includes AR.

As many as 40% of customers are willing to pay more for a product if they can experience it through AR. (Big Commerce)

In addition to boosting engagement, AR increases conversion rates by increasing the time people spend with your brand. AR has the power to enhance and expedite the way people make buying decisions.

Average mobile conversion without AR is about 3.5%. With AR, it increases to 11%. (Big Commerce)

The benefits of AR impact every stage of the sales funnel. “Immersive media’s unique capabilities lead to positive results in metrics across the funnel, from driving brand awareness and user engagement, to increasing viewing time, to boosting purchase intent, as well as actual sales. (IAB AR Buyers Guide 2021)

AR experiences are fun, engaging, and extremely impactful to your bottom line. What other reasons do you need? With Camera IQ, AR is easy, centralized, and scalable. Create and launch AR experiences in minutes and publish across social channels from one platform. Want to learn more? Schedule a demo with us here.

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