It’s important to monitor the level of engagement customers have with your product, service, or brand. When you make a sale, you need to know if people are engaging with your solution or product and having a positive experience.
Engagement is a predictor of whether or not that customer will stay with you, and possibly even refer you, so it can be a leading metric for future revenue and growth.
So here’s how to use your CRM to track customer engagement and the appropriate Key Performance Indicators (KPIs) for your business size.
What is customer engagement?
Though a sale or a subscription is a landmark in a customer’s relationship with your company, it’s just the beginning. Engaged customers create emotional bonds with your brand, and can create a valuable feedback loop for product improvements.
You can elect to add engaged customers to customer or member councils who can get early access to new products or services and provide candid feedback in both one-on-one and focus-group style programs. If you’re in software, your engaged customers can be the ultimate beta testing group.
In the positive cases, engaged customers become brand champions who are willing to provide referrals, testimonials, and enthusiastic reviews. In the best cases, they become brand evangelists who regularly engage in a positive manner with your brand on social media, and may even speak on your behalf at events, effectively functioning as an extension of your marketing team.
Why measure customer engagement?
While engagement is a major revenue predictor in recurring revenue businesses, all businesses can benefit from surfacing these metrics. No one will argue that engaged customers create lasting value for your company. Knowing you can count on positive references and referrals from clients will help you compete for more and bigger deals. While some of this will likely be qualitative in nature, there are tools and metrics available today that can quantify engagement and track it over time, giving you insights into past, present, and future performance.
Five customer engagement metrics and KPIs that matter
There are five top customer engagement metrics that matter to nearly all companies. Each is described below. If you are wondering which matters the most to your company in particular, read on. At the end of each KPI summary, you’ll see a list of which kinds of companies typically prioritize it.
Start-ups defining and implementing their Unique Selling Points (USPs) will track different KPIs than mid-market companies working to scale up, gain traction, and win market share. Massive corporations typically focus on metrics that reflect their dependence on established brand reputations. That said, these metrics surface at the top for nearly all organizations.
1. First-week engagement
Engagement is often at its peak at the start of a contract. Make the most of your customer’s initial enthusiasm with streamlined setups, progress tracking, and solid support.
In a 2021 study, Linköping University’s Gustav Fridell examined SaaS best practices. He found that reducing friction and monitoring progress increased first-week retention.
Consider guiding, tracking, and displaying your new user’s progress through the onboarding process. They are more likely to stick with your solution if they can visualize a successful customer journey, especially during their first crucial steps.
For example, these tips can improve the new customer experience and lower abandonment and unsubscribe rates in the software industry:
- Make your platform or tool intuitive and easy to learn.
- Offer fast page load speeds.
- Prioritize addressing bugs and glitches that emerge during onboarding steps.
- Demonstrate ‘quick wins’ and value early on.
No user experience is perfect. Inevitably, people will have some trouble adopting your products or services. When they reach out, you need to offer reliable customer service to promote customer retention. Invest in robust support and show new customers you care about their success.
Chatbots can be a great tool when implemented thoughtfully, but nothing is better than interacting with a deeply-knowledgeable support person. Short term churn can be avoided by quickly showing value to your customer in the onboarding phase. You have to get it right.
Best for: Mid-market companies, especially startups, should hyper-focus on frictionless onboarding, user journey tracking, and responsive, knowledgeable support. At a small scale, individual customer success equals corporate viability.
Large brands with solid reputations enjoy more initial customer enthusiasm than smaller organizations. Their positive legacy marketing efforts mean users are less likely to jump ship when frustrated.
2. User Activity
SaaS companies, mainly social media platforms, eCommerce brands, and game manufacturers, pay close attention to their Daily Active Users (DAU) and Monthly Active Users (MAU) metrics. However, DAUs and MAUs aren’t just about competing for market share. Together they create an early-warning system.
Think of MAUs as benchmarks and DAUs as indicators. If you see a significant difference between your daily numbers and your monthly averages, something unfavorable is happening. DAU valleys or spikes could be your first signal of a major problem or win.
Best for: Companies of all sizes should compare DAUs to MAUs to stay ahead of news events and emerging trends. Small and medium-sized companies can track this metric to acknowledge marketing strategy milestones. However, MAUs are crucial for large companies to maximize their market share for bottom-line profitability.
You can use DAUs and MAUs to measure “stickiness.” This metric represents how happy people are with your product or service based on how frequently they are returning. It’s an effective way to predict how likely users are to stick with your brand.
Typically, stickiness equals Daily Active Users divided by Monthly Active Users.
Stickiness = DAU / MAU
However, you may want to consider alternative formulas that account for unique users. Unique users represent the number of visitors to your site. An increase in this metric shows your company and website are growing.
Businesses often look to churn rate as a measure of stickiness, but keep in mind that churn is a lagging indicator that doesn’t allow you to be as proactive as the formula above.
Best for: Stickiness matters most for startups that need to build momentum and raise brand awareness.
Mid-market and large businesses also want to limit turnover, but they are typically better positioned to tolerate variations in customer engagement and have more varied marketing campaigns.
4. Net Promoter Score (NPS)
You’ve likely seen NPS in action even if you’ve never heard the term. If you’ve ever been presented with a scale from 1-10 asking how likely you are to recommend a company, you’ve been NPS’d. The idea is that the most satisfied customers (those who rank you as a 9 or 10) will spread the word about your product or service.
When you survey your customers, some will say they’ll probably promote you to their peers. Some will say they won’t. And some won’t feel inclined to share positive or negative information about you. The scale lists scores of 0-6 as “detractors”, 7-8 as “passives,” and 9-10 as “promoters.”
To calculate your NPS, subtract the percentage of survey respondents who would say negative things from those who would offer positive things about your brand.
NPS = Promoter % – Detractor %
For example, if 70% of people share positives and 20% share negatives, your NPS would equal 50. Many popular brands struggle with their NPS score. Apple, which is considered world-class when it comes to NPS, sits at around 50.
Best for: Large companies with massive ad budgets need to track brand health with the NPS metric carefully. Experts consider this a fundamental KPI for predicting near-term revenues, especially your target audience. Smaller and emerging businesses that rely less on brand recognition and more on networking and feature-driven ad campaigns rely less on this KPI.
5. Customer satisfaction (CSAT)
SaaS companies often measure CSAT by asking users for short one-to-five star or emoji ratings. You can use these quick check-ins to measure the customer experience with the features they use.
This is different from NPS, which provides a more general satisfaction rating of your product, service, or brand. In short, CSAT tracks customer satisfaction, and NPS measures customer loyalty.
Best for: Because they focus almost exclusively on new solutions and USPs, startups must measure CSATs. Small SaaS businesses need to know specific user preferences when offering suites of new tools. Larger companies need CSAT data when adding features but depend more on NPS scores for predictions.
Track user engagement and much more with Insightly Service and unified CRM
There are other metrics out there, but this list represents a good batch to focus on first.
With Insightly Service, mission-critical customer data is available to all your teams, in real time, empowering them to have more relevant conversations that drive customer satisfaction and success. A dashboard view gives you rolled-up access to the data that’s important across the organization and to measure the KPIs that are vital to your team.
Break down silos with a robust view of the customer. Empower your support teams to solve tickets quickly, listen with empathy, and create sales opportunities right in the application. See the features that matter to you with a free demo of Insightly today.