Measuring customer engagement is crucial for businesses to understand customer interest in their products and services. But as your business scales, it can be tough to determine user engagement across different touchpoints in the customer journey. The solution? Track your customer engagement metrics.
By measuring engagement metrics and KPIs, businesses can assess their current standing, improve areas and uncover strengths. From email open rates to social media interactions, customer engagement metrics offer insight into marketing strategies that work and reinforce customer relationships. These metrics predict revenue and drive success by providing insight into past, present, and future performance.
This article explores the top metrics for measuring customer engagement and how they can help businesses improve performance and drive growth.
Benefits of measuring customer engagement
Tracking and measuring customer engagement is vital as it helps identify areas for improvement and create a positive customer experience. Here are some key benefits of measuring customer engagement:
Design a more effective engagement strategy
Quantifying engagement can help you understand how customers interact with your brand, products, or services. Companies can create a more targeted and effective engagement strategy by focusing on the activities, touchpoints, and interactions that are key drivers of engagement.
Identify strengths and weaknesses
Measuring engagement can help you identify areas where your strategies excel and areas that need improvement. This information empowers businesses to make changes and improve the customer experience.
Make data-driven decisions
Tracking engagement metrics helps businesses identify patterns and trends in customer habits, which can be used to improve products, services, and the overall customer experience.
Gain insights into customer behavior and preferences
Tracking and measuring engagement provides valuable insights into how customers interact with the brand, including their purchase habits and preferences. Companies can use this data to personalize the customer experience and increase satisfaction.
Improve retention and loyalty
By identifying areas where customers are disengaged and working to improve them, businesses can increase retention and loyalty. This leads to increased revenue and positive word of mouth.
How to measure customer engagement
Measuring customer engagement can help identify improvement areas and track marketing campaigns’ effectiveness. Here are three ways to measure customer engagement:
- Surveying customers to gather feedback on their satisfaction and overall impression of the brand. Use in-app surveys, post-chat surveys, and real-time chat thumbs-up feedback via customer support chatbots or email campaigns to collect data.
- Using email campaigns to track metrics such as open and click-through rates to understand content and subject effectiveness and measure customer loyalty.
- Employing website monitoring tools or other MarTerch solutions such as Google Analytics to understand engagement on specific pages and track new and returning visitors.
Key customer engagement metrics and KPIs
To fully understand and improve the customer experience, it's important to track various metrics. The following are some of the most commonly used KPIs and metrics for measuring customer engagement:
1. Net Promoter Score (NPS)
Net promoter score is a customer satisfaction metric that measures how likely customers are to recommend a company's products or services. It's a classic customer engagement tool for understanding customer experience and loyalty.
NPS asks a simple question: "On a scale of 1 to 10, how likely are you to recommend our products to a friend or colleague?" The responses help segment customers into three groups:
- Promoters: scores of 9-10
- Passives: scores of 7-8
- Detractors: scores of 0-6
Promoters are loyal customers who will refer your company to others. Promoters are loyal customers who will refer your company, Passives are satisfied but not enthusiastic, and Detractors are unhappy customers who can harm your brand by spreading negative reviews.
NPS helps companies understand customer needs, identify areas for improvement, and identify loyal customers (Promoters) who are likelier to recommend their products. The formula is:
% Promoters - % Detractors = NPS
Tip: NPS isn’t just a one-time measurement; you should track it regularly to monitor changes in customer satisfaction over time.
It's important to note that Passives aren't included in the calculation, but knowing their percentage can still help identify opportunities to convert them into Promoters. Additionally, tracking your NPS can be done through customer surveys or specialized NPS software. You can conduct surveys via email, phone, at the end of a chat session, or with chatbots and analyze the results to understand customer satisfaction and loyalty.
2. Customer Lifetime Value (CLV)
Customer lifetime value is a metric that measures the monetary value of a customer to your business over their entire lifetime. It helps identify high-value customers and focus on retaining them, which is crucial since acquiring new customers is more expensive.
Tracking CLV is relatively straightforward. The basic formula is:
(Customer revenue per year * Duration of Business with Customer) – Cost of Acquisition and Service = CLV
This formula considers the revenue a customer generates each year and the time they've been a customer, minus the cost of acquiring and servicing them. Using this formula, you can identify which customers are most valuable to your business and focus on retaining them.
A higher CLV indicates customer satisfaction and loyalty, as customers who are happy with a company's products or services are likelier to continue purchasing and renewing their subscriptions. Improving the CLV typically involves providing customer support and incentives, which can lead to increased engagement.
3. Customer Satisfaction (CSAT)
Customer satisfaction is a metric that measures how satisfied customers are with a product or service or a business's actions. Happy customers bring value and drive sales, so understanding their satisfaction is crucial for a business's success. The CSAT score is expressed as a percentage, with 100% indicating complete satisfaction and 0% indicating no satisfaction.
To measure CSAT, a survey is conducted where customers rate their experience on a 1-5 scale, with 1 being very dissatisfied and five being very satisfied. This can include questions about their satisfaction with a recent interaction, purchase, or call quality of agents. The CSAT score is calculated by dividing the number of satisfied customers by the total number of survey responses.
Note: CSAT score is a snapshot of how each customer felt at the time of the survey and isn't typically used to measure customer engagement over time. Instead, use it for creating company-wide benchmarks that are consistently updated. They’re easy to collect and understand across various channels within an organization.
Tip: Use live chat software to capture customer feedback with custom surveys.
4. Customer Effort Score (CES)
Customer effort score is a metric that measures the effort a customer has to put in to solve a problem or fulfill a request. It’s important because if customers feel they have to put much effort into interacting with a brand, they are likelier to switch to a competitor.
To increase the CES, brands should provide quick responses and efficient service. After significant interactions, such as a purchase or contact with customer service, brands should send out a CES survey to collect data. The survey typically asks customers to rate the effort required on a scale of 1-5 or 1-10, with a lower score indicating less effort.
The basic formula to calculate CES is:
Total of Customer Effort Scores / Number of Survey Respondents = (Average) Customer Effort Score
Note: CES isn’t just a one-time survey. By monitoring your CES over time, you can identify areas that need improvement and measure the effectiveness of your efforts.
To further analyze your CES data, you can segment it by customer groups or interactions. For example, you can compare the CES of first-time customers to repeat customers or the CES of online vs. in-store exchanges. That’ll give you a deeper understanding of where your customer experience is excelling and where it needs work.
A great way to improve CES is by providing customers with easy access to answers and solutions to common issues via a self-service knowledge base that can greatly reduce the effort required for customers to find the information they need. This can be achieved through various means, including online FAQs, user manuals, and video tutorials.
Tip: Use a knowledge base software to offer self-service support for your customers. You can also integrate your knowledge base with different types of chatbots to provide automated, instant responses to common customer queries, reducing the need for customers to contact support teams directly.
Having the right knowledge base software can do more than just organize and present your company's information. It can also help you measure customer satisfaction levels. Many knowledge base platforms include a built-in feedback system, typically located at the bottom of each article. This feedback system allows customers to rate the article and leave comments, indicating whether it helped solve their problem.
By regularly monitoring and analyzing this feedback, you can gain valuable insights into customer satisfaction levels and identify areas where you can improve your help center content. This ultimately leads to better customer service and an improved customer experience. Invest in the right knowledge base software and stay on top of your customer's satisfaction levels.
5. Churn rate
The churn rate measures how many customers stop doing business with a company over a certain period. It's essential to track this metric for a holistic overview of customer satisfaction and revenue loss. For example, the monthly churn rate for a subscription service will indicate the percentage of subscribers who canceled their subscriptions that month.
A typical annual churn rate for SaaS companies is 5-7%. If a company's rate is higher, they should look at which segments of customers are leaving to find the issue. To calculate the churn rate, divide the number of customers who stopped doing business by the total number of customers.
A high churn rate means customers aren't satisfied and are looking for alternatives. To improve customer engagement, find and address pain points in the customer journey. To track the churn rate, use tools like CRM software and customer engagement platforms or create a spreadsheet. Also, track the demographics of churned customers to find patterns and trends.
6. Social media engagement
Social media engagement is crucial for measuring how connected customers are to your brand and how likely they are to share information about your products or services online. A high engagement rate can help build customer loyalty and drive word-of-mouth marketing.
To calculate your engagement rate, divide the total number of engagements (likes, comments, shares) by your total number of followers. Low numbers may mean you need to focus on providing value and building relationships.
But remember, social media isn't the only channel that can drive engagement. Compare metrics from other successful channels like newsletters or email campaigns for a bigger picture. This metric can also help businesses identify what content resonates with their audience, allowing them to tailor their strategy.
7. Average session duration
Avg. session duration, or how long users spend on your website per visit, is vital for measuring customer engagement. It works with other metrics like bounce rate and adoption rate to give you a better understanding of user behavior on your site. The benchmark is usually 2-3 minutes, but it can vary depending on your product or service.
Though avg. session duration is often considered a vanity metric, it can give you essential insights about your website and user experience. Users spending less time on your site could indicate onboarding or user interface design issues. You can find areas to improve and increase user engagement by tracking this metric.
To track this metric, use analytics like Google Analytics. These tools can automatically track session times for all pages on your website, showing which pages resonate with users and which don't. This data is valuable for creating new campaigns and content targeting your niche audience. By focusing on content that keeps users engaged longer, you can increase conversion rates and improve the overall user experience on your website.
8. Bounce rate
Bounce rate measures how many visitors leave your website or product after viewing only one page. It's essential to track this metric because it can show a lack of engagement or interest from visitors. A high bounce rate can mean issues with UI/UX, preventing visitors from exploring other features or links on your site.
To measure bounce rate, use web monitoring software. These tools track bounces and divide them by total sessions. A reasonable bounce rate for SaaS websites is usually between 26-40%. Gather qualitative data through user feedback and surveys to understand why visitors leave.
How can Velaro help measure customer engagement metrics?
Velaro's customer engagement platform lets businesses track key metrics such as customer satisfaction, response time, and website traffic via chatbots, live chat, and omnichannel support. This empowers teams to collect customer feedback to improve their ongoing customer engagement and support.
With Velaro's live chat software, businesses can provide excellent customer support and measure engagement as effectively as needed. And when combined with a chatbot, companies can easily track all types of engagement and get customer-centric data for their business.
The live chat software allows for real-time customer interactions, while the chatbot can automate common inquiries and gather valuable data on customer interactions. Together, these tools give businesses a comprehensive view of customer engagement and allow them to make data-driven decisions to improve their customer support and overall business strategy.
With Velaro’s robust reports and analytics, businesses can track critical customer data, including interactions, identify areas for improvement, and make data-driven decisions on enhancing customer engagement. Velaro also provides integration with other tools, customization options, and multi-channel tracking capabilities, making it easy for businesses to get a holistic view of the customer journey and engagement levels.
Velaro also helps measure customer engagement in several ways, including:
- Real-time monitoring of chat performance with operational KPIs, data-rich widgets, and event-based newsfeeds on one dashboard. Businesses can quickly gain insights such as shopping cart abandonment, total deal size, support time, etc.
- Complete access to visitor, survey, and transcript data for any chat. You can save and access customer data and information directly on the platform, to your CRM, ticketing systems, or other third-party systems for detailed analysis. This also enables teams to access historical data such as chat history, ratings, and survey submissions.
- Tracking conversions as granularly as you need and giving insights into potential leads, successful form completions, or e-commerce sales
- Accessing conversion data to measure the success rate of live chat efforts. You can compare data on visitors who do and don't chat to understand conversations' value and positive effects.
- Analyzing customer feedback from thumbs-up/down chat responses, pre and post-chat surveys, and 5-star reviews from built-in customer satisfaction reports. Quickly see where you are meeting expectations and where you need to improve.
- Testing canned responses, seeing which messages have the highest approval ratings, and driving the most engagement with automated A/B testing.
- Improving customer engagement with customization options such as custom chat buttons, pre-chat surveys, and automated greetings.
- Automatically and instantly giving you a complete picture of every website visitor, including what they've viewed and how they arrived at your site, so that you can have the knowledge on how to best serve and personalize your customer interactions.
With Velaro, you'll have all the data and insights you need to improve customer engagement and drive better business results. Whether you're looking to optimize your team's performance, improve conversions, or understand customer sentiment, Velaro has the tools you need to succeed.
Improve your marketing ROI with customer engagement metrics
Customer engagement metrics are vital tools to identify which marketing strategies are working and which aren't. This empowers marketing and sales teams to adjust their approach and focus on the processes that generate the most ROI.
For example, if you notice that customers who engage with your chatbot are likelier to purchase, you can invest more resources into chatbot development and promotion. Or, if you find that a specific content type drives more engagement than others, you can focus on creating more of that type.
In addition, customer engagement metrics can also help you identify areas where your marketing strategy may fall short. If you notice a dip in engagement, it may be a sign that your messaging isn’t resonating with your target audience or that your customer service is lacking. By addressing these issues, you can improve your overall marketing ROI.
