Engage the customer

How Customer Engagement Strategies Will Change in the Next 5 Years

Technology and regulatory changes require businesses to be prepared to adopt new best practices.

How Customer Engagement Strategies Will Change in the Next 5 Years
Credit: Getty Images

Over the next five years, the way businesses engage with customers will undergo a significant shift. Some companies are adapting well, while the rest will be left behind. Here are several critical trends and how companies can plan for a changing landscape.

Death of Personalized Advertising

Much of the internet has evolved around technology to target ads based on the interests and actions of users, but that’s now going away through technology and regulatory changes like Europe’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). On the technology front, Apple recently introduced new policies to curb the ability for businesses to track users for personalized ads in iOS Apps. Google has followed suit by announcing that Chrome will remove support for third-party cookies in 2023, which have to date been a fundamental part of the advertising ecosystem.

The impact of these changes is a steep decline in the effectiveness of advertising. Facebook’s quarterly earnings report revealed a 30 percent increase in price per ad over the last year alone. As advertising becomes more costly and less effective, businesses will switch their strategies to survive and thrive in the changing environment.

Recent trends include more acquisitions and consolidation between businesses that have previously depended on advertising. Consolidation enables companies to grow their business through bundling products and cross-promotion, reducing their dependence on personalized ads. Many companies are also switching from offering free content to subscription paywalls, while others leverage “freemium” models or trials to increase organic growth. Nearly every online business needs to reduce its dependence on advertising for growth through any means possible.

A Focus on Omnichannel Experiences

Users are increasingly interacting with online businesses across multiple platforms. They might order an item from Doordash’s website, then follow notifications about the order from their smartphone. Or watch YouTube videos across mobile devices throughout the day, and switch over to their smart TV at night.

As users interact with products across different platforms, they still expect a consistent experience. As a result, businesses that invest in great omnichannel experiences will have a competitive advantage. Companies like Amazon and Netflix have led this trend, establishing a significant moat against competitors who have focused on just one platform or messaging channel.

As user expectations shift, it has become critical for businesses to create a uniform user experience across platforms and leverage multiple channels, including Push Notifications, Email, and SMS, to reach users effectively.

Real-time Everything

We all hate waiting, and recent technology trends are eliminating the need for us to be patient. Rapid increases in computer processing speed and network technologies like 5G have made loading bars a thing of the past.

As technology provides a path towards cutting out all delays, users are delighted when companies take advantage of it to provide real-time information. Users expect messages to be delivered at the precise moment they’re most likely to benefit and engage– such as real-time updates on the delivery of an online purchase or immediate alerts across their email or mobile device when their favorite band releases an album.

Over the coming years, real-time experiences will become even more critical. Timely and personalized messages will be the most common entry point when users engage with a product. In contrast, users will be less likely to seek out and adopt products organically. With limited time in their busy schedules, users prefer experiences that are sent to them rather than having to seek them out. They also gravitate towards experiences that provide real-time information rather than those that make them wait.

Importance of Brand Trust

There was a time when businesses relied on techniques like oversized buttons, deceptive claims, fine print, or dark patterns to attract and engage customers. Older or less tech-savvy users were prone to fall for these techniques, many of which remain in use today.

Deceptive practices like “deal countdown” timers or spam that costs users time or money will soon disappear. Businesses must instead focus on having a straightforward user experience and world-class customer support.

Each year, more customers leverage online review websites when making purchasing decisions, and they increasingly leave negative reviews when they have bad experiences. Sneaky techniques can lead to short-term growth, but they erode user trust and destroy brand loyalty over the long term. As a result of these trends, every business should steer clear of unethical growth hacks.

What Modern Businesses Must Start Doing Today

Technology and regulatory changes require businesses to be prepared to adopt new best practices. With each change, companies must prioritize great experiences when they engage with customers, including within their product, customer support, and external messaging. Those that can’t keep up will find their growth slowing as buyers seek out brands that provide the greatest convenience and trust.

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