Customer interaction management: Key strategies for retention and loyalty

Every interaction is an opportunity to create a long-lasting relationship with your customers. Are you making the most of those interactions to build customer loyalty?

In this article, we will define customer interaction management, why marketers should care and key strategies to enhance customer retention and loyalty.

What is customer interaction management?

Customer interactions are any communications—or interactions—a business has with its customers. Customer interaction management is the process of managing these interactions, usually using enterprise software solutions.

Interactions with customers occur across many channels:

  • Face-to-face

  • Phone, text or email

  • Chat, chatbots or instant messaging

  • Social media

  • Email marketing

  • Websites and mobile apps

While customer interactions often mean customer service, or when customers reach out for help or information, they also include your website. This includes browsing, shopping, skimming self-service articles or reading FAQs.

A customer interaction can be proactive or reactive. Reactive is often the customer service side of things. Proactive occurs through your marketing efforts. Social media posts, emails and other awareness campaigns count as interactions because they impact a consumer’s sentiment toward your brand.

All interactions with customers are crucial to your business's success. Each touchpoint—whether proactive or reactive—is an opportunity to engage with your customers, improve their satisfaction and turn them into raving fans. All of these factors ultimately have an impact on revenue and business growth.

The significance of customer interaction

Interacting with customers is an integral part of business. In fact, Zendesk’s Customer Experience Trends Report found that half of customers say they’d switch to a competitor after just one bad experience.

That means you have one chance. If you get it wrong, you risk losing the value of that customer forever. 

But, by optimizing customer interactions, you have an opportunity to:

  • Understand your customers’ needs and empathize with them

  • Identify issues, gather feedback and make improvements to your products and services

  • Create long-lasting relationships, which is essential for retaining customers and cultivating deep loyalty

  • Differentiate your brand through positive and memorable customer experiences

  • Maintain high levels of customer satisfaction with your brand and products

  • Innovate based on customer desires and preferences

This ultimately delivers a great customer experience, which impacts loyalty. 

The key is to provide this level of service and positive interactivity across all channels. Consumers today expect the standard email and phone service, but also text, chat, social conversations and technology like chatbots. Brands that succeed at managing customer service offer several points of interaction and create similar experiences across them all.

To put it simply, customer interaction management plays a vital role in understanding and meeting customer expectations, which is essential for improving customer experience and loyalty.

Why marketers should care about customer interaction management

Now that you understand the impact of customer interaction management, let’s discuss a few of the reasons why marketers should prioritize it.

Enhance customer engagement and satisfaction

To build strong relationships with customers, you need to provide great customer interactions. Through these interactions, you have an opportunity to engage deeper with customers, taking your relationship beyond transactional. This is how true brand loyalty and advocacy is born.

And as mentioned, when you have engaged and satisfied customers, they stick around. Retention is a key metric in long-term business success, because it lowers your cost per acquisition (CPA) and increases profits. 

Brands with top-tier customer interaction management don’t just provide great customer service reactively, but rather are proactive. Through active and timely communication, customers feel supported. Examples of proactive customer interactions that improve customer satisfaction include:

  1. Alerts: Notify customers of issues before they have a chance to ask about them, like shipping delays, out-of-stock items or defects.

  2. New products: Inform customers about new products or services in which they may be interested (based on prior purchase history and interactions). 

  3. Live chat: Help website visitors navigate your site and find what they need quickly with the help of technology. These tools—when used correctly—make casual browsers feel supported, without having to ask for help.

  4. Personalization: Take steps to surprise and delight customers without being asked, such as sharing a personalized recommendation, giving them an upgrade or offering a deal.

These examples show how proactive customer interactions can lead to higher customer satisfaction by addressing needs, concerns or issues before customers raise them.

Leverage insights for targeted marketing efforts

Marketers today understand the importance of high-ROI marketing efforts. There’s no space for ad waste or spray-and-pray tactics. You need data and robust customer profiles to succeed at personalized and effective marketing.

Customer interactions not only rely on targeting; they also provide some of the required insights. Every time you interact with a customer—through any channel—you have an opportunity to learn. Customer interactions are a valuable source of data and insights that can help marketers discover customer pain points, needs, preferences and behaviors. This enables you to tailor products, services and communication to meet customer expectations.

Boost ROI and conversions

A focus on customer interaction management allows marketers to win leads, increase conversions and boost ROI. Part of this is due to providing a better customer experience and activating more targeted campaigns. 

By reaching customers who are more likely to respond to offers, or who are actively in-market to buy, you can increase your ROI. A major factor in conversions is sending the right message at the right time to the right prospect. But also being highly relevant, targeted and personalized.

Customer interaction management provides valuable data insights that can be used to optimize marketing strategies and engage consumers, leading to more traffic from in-market shoppers and improved conversion rates.

Create seamless customer journeys

Brands that deliver a seamless customer experience across digital and human channels experience better growth, higher sales and superior brand advocacy. But customers have different expectations across different interaction channels. For example, let's say someone taking a trip needed to change their hotel stay at the last minute due to a flight cancellation. In that moment, they typically would prefer to talk to someone so they know they are properly booked for that night (even at the last minute). Whereas that same person would have been fine booking the stay online if it was something they had been planning for months. The mode and channel of interaction can be dependent on the context in which the person is making that purchase decision.

Customer interaction management tools, like loyalty management software, allow you to create seamless experiences across all customer interactions by coordinating, documenting and organizing customer communication, while allowing for unique channel-specific strategies. Success doesn’t depend on your ability to contact customers in every channel possible. Instead, effective omnichannel marketing is about creating seamless experiences between your digital and human channels. In another example from the travel industry, it would be helpful for an airline kiosk employee to know if a traveler is a high-tier member as they're checking in to offer upgrades or other perks to a very loyal customer.

That said, it's not always easy to build holistically connected customer experiences. There are a wide range of challenges and issues to making that happen, as outlined by a recently published whitepaper from IDC, sponsored by Epsilon, titled "Customer experience suffers without omnichannel alignment":

  • Siloed data: With multiple sources of truth, and a lack of centralized identity resolution, adtech
    and martech applications execute in a suboptimal manner.
  • Siloed technology: Beyond data, individual applications are poorly integrated, creating gaps
    between advertising and marketing functions, which results in a fractured buyer
  • Siloed teams: The marketing department organizational structure segregates paid versus
    owned tactics and discourages collaboration.

Foster brand loyalty

By managing customer interactions effectively, marketers can foster brand loyalty and turn customers into brand advocates. Good customer interaction management enables personalized and proactive interactions with customers, which leads to less customer attrition, ultimately contributing to higher customer lifetime value (LTV) and business growth.

Just one positive experience can turn a casual customer into a loyal fan. But you need to continue to deliver on their expectations and provide value. On the opposite end of the spectrum, losing customers is extremely expensive. According to Gartner research, maintaining and selling to a current customer is a more efficient and lucrative approach compared to acquiring a fresh one. And most of the issue lies in “not valuing customers or listening to them when they have problems.”

To keep customers happy, consider a proactive approach to real-time interaction management, which can lead to more loyal customers and retention.

Key components of an effective customer interaction management strategy

The value of strong customer interactions is clear. But knowing how to make it happen is another story. This section will outline how to effectively implement customer interaction management into your business.

Use the right technology

Managing every interaction manually is impossible—you need a full-scale view. Customer interaction management technology and expertise is important for managing customer interactions across all touch points.

Creating integrated, connected customer experiences ensures strong brand-customer relationships and helps avoid "pervasive" and "problematic" customer experiences. Says IDC's Roger Beharry Lall,"Marketers need to embrace a more unified approach that connects advertising and marketing silos. Whether through a single tool, a deeply integrated stack, or the use of bridging data constructs, aligning these two areas is essential."

To quote the IDC whitepaper, "Organizations must undergo a thorough reevaluation of their martech/adtech stacks, enhance the foundational data structure, and restructure their teams, if they wish to achieve an integrated approach and compete in a modern reality."

Use omnichannel communication strategies

It's imperative that marketers today embrace a more customer-centric, unified omnichannel strategy.

In the IDC whitepaper, IDC’s Roger Beharry Lall explains why connecting martech and adtech gives brands the power to create more comprehensive data management strategies that pull through to campaign and media activation.

“Marketers need to embrace a more unified approach that connects advertising and marketing silos,” Beharry Lall writes. “Whether through a single tool, a deeply integrated stack, or the use of bridging data constructs, aligning these two areas is essential.”

Marketers can unify advertising and marketing channels by using data platforms that centralize identity resolution across their organization, enabling them to deliver campaigns seamlessly.

Gather and analyze communication data

Customer interaction management allows you to collect and analyze data from every customer interaction to better understand their needs and preferences. This provides vital information to power many teams across your organization:

  • Past purchase data helps you understand what customers are buying, when, where and how. It can identify bottlenecks in the process, common issues or why customers seek help.

  • Customer service interaction data helps you understand what’s not working. Generally, customers engage with call centers or website instant messaging when they need help. Knowing what they need can be used to prevent future issues, or find better ways to assist them. This type of insight can lead to product enhancements, new product development, website updates, future communication channels or other integrations for operational efficiencies.

  • Marketing interaction data, including proactive communication, can showcase what channels, messages or timing works best for your customers. This can help you further refine, target and personalize for more effective campaigns and outreach.

If you choose to focus on customer interaction management, will need to be time and resources dedicated to the collection and analysis of this comprehensive data set. A great way to ensure efficiency in this area is to work with a vendor that is already a leader in identity resolution, which creates a continuous flow of information about your customers that you can add to and learn from over time.

Customer interaction management provides easy visibility into real-time and historical data. Use those insights to make data-driven decisions about your products, services and communication. By taking action, you can further increase customer satisfaction and long-term success.

Regularly obtain feedback

Customer interactions provide plentiful opportunities for feedback, but most of it comes unprovoked. For example, every customer interaction includes some sort of feedback, whether it’s positive or negative. The positive comes in an obvious form, typically: The customer browses and makes purchases that suit their needs. The negative, however, can come in myriad forms. It can look obvious, like a return, or it might simply be no response from the customer whatsoever. One of the impactful components of customer interaction management tools is the ability to collect and make use of all these insights. 

But tracking how many returns were because of odd sizing, for example, you can see that this is an issue that you should discuss with your product team. Or maybe you just need to update your sizing charts, or even add information in the product description about the fit. The key is to proactively help customers, while also solving common challenges.

But another way to regularly obtain feedback from customers is proactively. With effective customer interaction management tools, you can send surveys or offer feedback opportunities, either randomly, through targeted outreach or immediately following an interaction. Anytime you get a survey asking “How did we do?” it’s a proactive company looking for feedback on their customer interaction management processes.

The next step should always be to analyze the feedback and make appropriate changes. Customer expect that you take their feedback to heart, and will implement improvements based on it. One piece of customer satisfaction is feeling heard, so make sure you’re also proactively telling your customers about changes you’ve made because of their input.

Personalize and tailor interactions

Whether reactive or proactive, every interaction can be personalized with the right technology stack. Having a customer interaction management strategy grounded a strong, person-level identity helps you tailor interactions to create amazing experiences for customers.

Customer interaction management software extends personalization beyond communication and content. It allows you to personalize the entire customer experience, from onboarding to ongoing support, making each touchpoint unique and tailored to the individual customer's needs. 

With the additional context from other interactions, customers feel supported whether speaking to a chatbot or live agent.

Integrate customer interaction tools

By integrating your customer interaction management software, customer relationship management (CRM), customer data platform (CDP), email service provider (ESP), and other key marketing systems, you can create truly personalized experiences across all touchpoints. This even includes your call center, payment processing, social media and chatbot interactions. 

This puts all relevant data about prior, current and ongoing customer interactions in one place. Every frontline team member has access, which means they have context and can better serve the customer's needs.

Improve operational processes

Customer interaction management software—especially when you also have a dedicated customer interaction management specialist—helps formalize best practices in customer interactions. This leads to improved operational procedures that can create more consistent experiences for customers. 

One element of a brand strategy is ensuring that customers have the same type of experience with your brand, regardless of how they interact. This means they get the same personality, ease and experience whether they’re in your store, phoning your call center or talking to a chatbot.

With an integrated customer interaction management solution, you can create automated processes and workflows. This ensures everyone knows how to interact with your customers at all times and across all channels. Automation also streamlines, making processes more efficient and reducing wasted time or errors.

Don’t forget to look to your customer feedback and data insights for assistance on where your processes could improve. Watch for long wait times, long call times, slow resolution, necessary follow-up and escalations, all of which are signs that your customer interaction processes aren’t optimal.

Best practices to boost your customer interaction 

Now that we’ve discussed why marketers should care about customer interaction management and the key components of getting it right, here are a few tips for interacting with customers in an authentic, engaging way.

Deliver relevant messaging

Marketing starts and ends with relevance. To create great end-to-end customer experiences, you need to craft messages that are on-brand and suitable for the target audience. Relevance provides compelling reasons for customers to engage and helps ensure a consistent and exceptional experience. Our research found that people are most likely to engage with marketing is being helpful first and foremost.

While you can try to guess what customers want and need, the only way to know for sure is through interactions. An omnichannel approach—powered by a person-first identity solution—brings together human, digital and other channels seamlessly for a frictionless, relevant and anticipatory experience.

Take Dunkin' for example, a brand that is well known for its powerful customer loyalty. Dunkin' crafts a connected customer experience through personalized, relevant 1:1 messages in loyalty statements, and meets customers wherever they are across channels in real time. With 20M+ real-time transactions per day, it's clear Dunkin' is brewing up some effective customer loyalty.

Personalize the consumer journey 

We’ve talked about personalization and creating a seamless customer journey. But the best companies go above and beyond. Use your customer interaction management software to engage in proactive and targeted interactions to build loyalty and trust. Then go above and beyond by surprising and delighting customers, and personalizing offers to make them feel special. And this means true personalization based on individual-level customer profiles, not device IDs or third-party identifiers.

Follow up that experience across all interactions, showing empathy and gratitude, but also treating every customer as an individual. By using modern technology, you can seamlessly weave personalization through every interaction. 

See your customers fully

Customers are people, not device IDs or third-party cookies.

To see your customers fully, ensure you use an identity solution that creates individual-level customer profiles that aggregate customers' many devices and accounts (because we all have multiple email addresses). Also, build proactive communication into your strategy. But focus equally on mastering your customer interactions, including implementing technology and developing protocols. Be prepared to monitor more channels for consumer feedback and requests. Your customers are talking about you and providing ample information to help you improve or grow, you just have to listen to them.

Technology can help solve many of your interaction challenges and many customers want digital options. But they still want, and sometimes need, human interactions, especially with complaints, high-value transactions or complex issues. Across all channels, they expect a frictionless experience that resolves their issues. An optimal customer experience comes from informed associates backed by relevant and cohesive digital experiences. 

Build customer loyalty with Epsilon

With Epsilon Loyalty, our loyalty management software, we help you use your customer behavior insights to deepen connections with relevant experiences.

Maximize the value of your loyalty programs with omnichannel activation of your data, driving the kinds of connected customer experiences that create long-lasting loyalty. Learn more.