What Are Customer Engagement Metrics & Why Are They Important?

Customer engagement metrics are measurements used to assess and evaluate customer interaction, involvement, and satisfaction with a brand, product, or service. 

Measuring customer engagement provides insights into the effectiveness of marketing strategies, customer relationships, and overall business performance, but, with more than one KPI for customer engagement, where does a company start?

In this article, we examine the most valuable customer engagement metrics and why they are so important. 

Common Customer Engagement Metrics

There are several measurements companies can use to measure engagement. It’s advisable to use a combination of a few for optimal results. 

Net Promoter Score (NPS)

Most consumers are familiar with surveys that ask how likely they are to recommend a company to their friends, family, and colleagues. This is just one example of a way to measure the net promoter score. The NPS is important because it asks customers to consider a company overall, instead of merely from the point of view of a single interaction. 

Customers typically rate a company on a scale of 0 to 10, with 10 being the highest rating. Companies then divide the results according to the following scale: 

• 0–6 are detractors: they are likely to actively disparage a company. 
• 7–8 are passives: they are typically uninterested and will neither promote nor disparage a company. 
• 9–10 are promoters: in an ideal world, all customers would fall into this category as they actively promote a company. 

Companies that wish to get an overall picture should subtract the percentage of detractors from the percentage of promoters. The final score can range from -100 at the worst to 100 at the best. 

Customer Satisfaction (CSAT) 

An extremely popular customer engagement KPI, CSAT measures a particular interaction. Businesses might ask customers to rate it on a scale of 1–5 or 1–10, or simply say if they were happy, unhappy, or indifferent. This measurement is valuable in checking the success of a particular process, but is not an overall indicator of customer satisfaction. 

Customer Lifetime Value

Customer lifetime value may be one of the most valuable of customer engagement metrics because it includes statistics from customers who do not provide feedback. They may never voice their displeasure with poor service, but it will be easy to see in their pattern of purchases. When CLV starts dropping, businesses should investigate why. 

Companies can work out the CLV using the following formula: 

Frequency of Purchase x Time Period x Profit

Customer Retention

Retaining customers should be easier when they are happy with a company’s products or services. Regular repeat customers lower the need to acquire new customers for a company, and so might help it reduce marketing costs. 

A high customer retention rate is an indicator of success. A high customer churn rate, on the other hand, indicates there is a significant issue to resolve. A company must determine why so many customers are leaving. 

Customer Engagement Score

It allows businesses to segment their audience to better identify which segments to concentrate on. Measuring customer engagement is slightly more complicated than the other ones because it involves gathering data from multiple sources.

Businesses may, for example, check how many free trial customers convert, or how many people like their Facebook page. They may also use specific actions like email open rates and conversion rates. 

The key is for a business to decide which engagement metric means the most and assign weights accordingly. The company will then assign a weighting to each rating and work out the number of each customer engagement KPI accordingly. 

Social Media Engagement

This metric looks at social media engagement that ranges from post likes and shares to complaints. Companies with teams may even scan social media for topics that interest their customers or communities so they can improve their engagement. 

Whatever the situation, companies should at least monitor mentions of their brands. It’s easy enough to set up a Google alert to do this, and there are several pieces of software that can work. The advantage of this is that it’s a useful way to better understand what drives engagement. 

Customer Effort Score (CES)

CES measures the ease of customer experience, specifically the effort required to complete a task or resolve an issue. It is typically measured through surveys and can help identify areas of friction or inefficiency.

Session Time

Companies do many things to market their products, but need to find ways to ensure they are reaching their goal. Measuring the session time is one way for businesses to ensure their content marketing, advertising, and other efforts are hitting the target. 

The longer people stay on a landing page or piece of content, the better it is for a business. By measuring this statistic, companies can determine what works best for them. Seeing what customers do next is also very useful for businesses. Are they sharing the content, visiting the website, or buying a product? If yes, everything a marketing team does hits the target.

Bounce Rate

The bounce rate is another money-saving metric. A high bounce rate shows businesses something is wrong. Maybe they need to improve their meta tags and descriptions, or work on the look of their page or advert. 

Here, social media engagement can also prove useful because it can help businesses trial potential content marketing subjects using small teasers. This way they do not have to waste money developing ideas with low appeal. 

It’s also worth analyzing the bounce rates of different sections of a website. If, for example, people are spending a lot of time on the content marketing page and bouncing straight off the product landing page, there’s a disconnection the company must address. 

Core User Actions

Core user actions are the actions people take when they feel a product or service may be valuable to them. They have not quite made the buying decision yet, but are close to doing so. These actions may include things like looking up features and reading blog articles and reviews. 

If visitors are not doing any of these things, companies need to rethink their strategies. It could be they need to rework the features list or put in more information. The blog may need more helpful articles or possibly even tutorials or evidence of the product in action. 

Page Views

This metric is helpful when companies use it in conjunction with metrics like bounce rates. A large number of page views and a high bounce rate won’t do a company any good. Many page views indicate a topic is interesting or a website is seen as a credible source to search engines.  

However, it does the company little good if it’s the wrong type of traffic. If visitors bounce off straight away, it can hurt the company’s page rank. Understanding what is driving page views is a vital way to improve business performance. It can also help the company identify and capitalize on patterns of high demand. 

Employee Satisfaction Score

While technically not a KPI for customer engagement, the employee satisfaction score is critical to measure. Very few factors have as much impact on customer experience. The happier the employees are, the better they can deliver outstanding customer service and engage with customers. 

What Is the Most Important Customer Engagement KPI

This is a tricky question and one that will vary from one company to the next. The answer can change from time to time as companies focus on new objectives. Different industries will view some types of engagement as more important than others.  

It’s up to each business to properly identify the metrics that matter the most and to use the information to garner valuable insights. They should then use these insights to make solid business decisions. 

Conclusion

The customer engagement metrics will vary depending on the industry, business goals, and specific customer engagement strategies employed. It’s important for businesses to select and track metrics that align with your organization’s objectives and provide actionable insights for improving customer engagement and satisfaction.

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