Top 6 Metrics to Measure Customer Engagement in 2020

Most SaaS businesses are making significant efforts to please their customers. This is for very good reasons!

Because the most important key to achieving success for every business is to keep your customers engaged. While it is also of high importance that you acquire new leads and attract the attention of your target market, it is even more essential not to lose them very quickly. If you tend to do so, all your previous efforts will be a waste of time.

A customer engagement score is a metric that is used to measure how engaged your customers are. It can help you assess where you are currently standing, what you can improve and what your strengths are in relation to your consumers.

The score is represented by a number based on customer usage and activity of your product or service. The higher the number of your customer engagement score, the happier and more engaged are your customers.

Customer engagement is one of the best churn predictors you can have for your SaaS company. Overall, we have found three main reasons why understanding your customer engagement is important. Knowing your customer engagement score can help you with:

● Identifying customers in trials that are ready to buy one of your offerings.

● Identifying customers that are suitable for an upsell or cross-sell opportunity.

● Identifying customers that need assistance or are about to churn.

But how do SaaS businesses know if they are successful in generating good customer engagement?

Below are 6 key metrics that show you how to measure customer engagement.

1) How do you measure customer engagement?

When referring to customer engagement, it’s common that people focus solely on usage metrics such as user visits, clickstream, pages per session, time spent on web site, etc.

That sort of information is definitely helpful when evaluating the engagement level of your consumers. Moreover, this kind of data can also be used to differentiate the users that are using your product or service from the consumers who aren’t. However, there is an even better and more comprehensive way to do it.

An engaged customer is a user that gets the best value out of the product or service that you are providing.

This means that you simply cannot measure customer engagement by the level of utilization of your product/service alone. It could be that someone may use your product or service, but might not get the value and benefits of it.

2) Top 6 key Customer engagement metrics

2.1 Activity Time

If the product or service you are offering online is one that creates value for the end-user, people will use it and they will use it often.

Therefore, it can be a good idea to measure the level of usage of your software. This can be done by quantifying the number of times a customer visits your service and the elapsed time they spend using it.

So, activity time is defined by the total time a user spends online, interacting with the offered service.

However, it is important to specify that “activity time” measures the actual time a user spends interacting with a given service, and factors out time in which the user is in-active (even if they are logged-in). This is crucial as the digital usage behaviors often involve users having many web-applications and sites open on different browser tabs.

2.2 Visit Frequency

The metric named “visit frequency” is used to describe how often a user returns to your service. This is a key representation of the value they get from using your software.

Once you now your users’ visit frequency this will provide you with insights into many potential patterns in customer behavior. These user patterns can be divided into groups such as “everyday use”, “weekly use”, and “sporadic use”.

Every SaaS business should focus on identifying the pattern that is most relevant for their given service and then monitor users against that pattern.

If you expect a happy user of your service to visit every day, you need to measure against that. Whereas if you offer a seasonal service and expect your customers to only return on holidays, look for that pattern and so forth.

2.3 Core User Actions

When examining whether your consumers are receiving value or not, another indication is their usage of “core user actions”. These should be individually defined for your specific product or service.

If a user is performing core user actions on a continuous basis, it is a great indication of the adoption of your product. Furthermore, when your consumers explore new features and start to use them, it shows that your service is growing on them, and they like to use it even more.

On the contrary, if a user is not performing core user actions, while still spending time on your service, it may be because the user is unable to adopt the features of your offering. This will indicate a usability problem. The missing performance of core user actions can also be explained by the fact that you don’t understand the value they are getting.

No matter what the problem seems to be, it will require further investigation to make sure the user and your offering are on track.

“Core user actions” are generally serviced specific and need to be aligned to your offerings.

2.4 Website engagement

Website engagement is a vital metric when measuring your user’s interest and behavior. This can be used to improve the delivery of your service or the content you provide in a way that the users appreciate.

When examining your website engagement level, you will be undergoing a process of analyzing how likely your site users are to stay on your site and take any actions. The action could be things such as subscribing, buying products or services, commenting, etc.

Furthermore, website engagement can also include other actions such as:

● How often a user clicks on an ad

● How a user interacts with your online customer representative

● How a user contacts your team – via an online support form or other means of communication

● Whether a user gives a like and/or follows you on social media

Generally, website engagement metrics is about interactions, reach, social buzz, and brand positioning.

All these activities are a part of your website engagement, which can have a high influence on your branding and potential growth.

2.5 Session Time

You may have great success with your marketing tactics, which results in numerous potential customers might be logging in on your platform.

But are they staying logged in?

To answer that question, you need to be measuring your users’ session time. This is your earliest indication that can tell you if you need to make changes to keep users engaged.

The great thing about this specific metric is that even with just a few users, this measure can tell you a great deal.

What is considered an appropriate session time will vary depending on your business. The best thing to do is to compare your teams’ session times with existing and new users. This will show you whether users really understand your product like you and your team or if they don’t know how to really make the most out of your product/service.

2.6 Frequency of Return Users

Look at the behavior of all your new users. Are they creating their first account, going through your onboarding process, but then forgetting about you?

If so, you have a big problem that you need to address.

Because if your users do not feel enforced to log in every day, how valuable is your product or service then?

The number of new accounts created becomes a vanity metric when you look at long-term value from this perspective. If or when the frequency of your returning users starts to get low (and maybe even gets lower and lower over time) your marketing investments go to waste.

As mentioned in previous articles, it costs five times more to acquire new customers than to retain the existing ones. So it is vital that you understand and increase the frequency of your returning users.

In addition, this metric can also be of importance, later during the consumer journey. At the growth stages where you start making changes to design or adding features to your offerings the frequency of retuning users can provide valuable insights.

Depending on your specific product/service, your paid users might not connect on a daily basis. In order to make sure your consumers are aware of all your product changes, you can implement a change-log and combine it with push notifications.

Keeping your consumers updated about your offerings is key to keep them engaged.

Learn more about how to use a change-log to announce new features and create higher value for your consumers.

3) Conclusion

The customer engagement score is definitely worth implementing for all SaaS companies. By including the mentioned metrics in this article, you can easily do this calculation on your own.

However, if you are looking for even more insights on your customer behavior, engagement, and involvement you can try some of the available platforms like Saizmo. It can can give you broad information about your customers.

A combination of these core metrics: Activity Time, Visit Frequency, Core User Actions, Website Engagement, Session Time, and Frequency of Return Users can uncover the level of user engagement for your firm.

To figure out just the right combination of customer engagement metrics that is right for your particular service will require some thinking and modeling of the expected user behavior. But once you have this sorted, you will be able to measure customer engagement at your company, which should ultimately result in better customer loyalty and increased revenue.

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