Customer engagement refers to the level of interaction between your brand and your clients across all channels over the course of your entire relationship. It can refer to what customers do to interact with your brand as well as how loyal they feel about your brand. You can gauge customer engagement by what actions your customers take to interact with your brand and how frequently they exhibit those behaviors. In a digital context, brands usually measure customer engagement in terms of specific behaviors such as website visits, sales conversions, and downloads.
Customer engagement unfolds in stages over the evolving lifecycle of your relationship with your customers. The customer lifecycle typically includes:
Lead acquisition: Which begins when a prospect first becomes aware of your brand
Purchase: Which transforms a lead into a customer
Onboarding: When a customer first begins using your product
Adoption: As customer usage continues to grow and expand
Escalation: When a customer encounters support issues with your product
Retention: When a customer decides whether or not to become a repeat buyer and loyal customer
During each of these stages, your customer can interact with your brand in multiple ways.
Why You Need to Track Customer Engagement
There are several reasons why customer engagement is important. Your engagement levels affect your retention, referral, and revenue rates. Customers who are actively engaged with your company and are deriving value from it are more likely to renew their subscriptions. They are also more likely to refer your product to others. Both of these factors directly impact your revenue. In this way, customer engagement can predict profits.
In order to track your customer engagement and develop effective strategies for improving it, you first need to define what you’re going to measure. There are different types of customer engagement that you can monitor.
You can define different types of customer engagement in relation to the different stages in your customer’s journey. During the acquisition stage, you can evaluate customer engagement in terms of activities such as:
How often customers visit your website
How many pages customers view on your website
How long customers spend on your website and on specific pages
Open rates and clicks with customer marketing emails
During the buying process, you can gauge engagement by activities such as:
Abandoned shopping cart rates
Average value per sale
In the onboarding stage, engagement may take forms such as:
Opening welcome emails
Time to complete each stage within the onboarding process
When customers encounter support escalation issues, you can monitor engagement through factors such as:
Number of support tickets
Average resolution time
First-call resolution rate
Finally, in the retention stage, engagement correlates with items such as:
Net promoter score
These are just a few examples of ways you can define and measure engagement in each stage of your customer’s journey. There are many other ways you could measure engagement in each stage. Today’s best customer engagement solutions allow you to define your own engagement goals. Customize your definition of engagement to focus on the metrics most relevant to your business goals.
You can also define engagement in terms of different models based on the number of customers involved in the engagement. In some types of interaction, you engage customers individually, which can be called a high-touch one-to-one engagement model. In other interactions where you use automation, such as knowledge databases and chatbots, you support multiple customers at the same time, using a one-to-many model. Many companies use a blended model where customer interactions occur on a one-to-one level while others are handled through automation using a one-to-many, tech-touch model.
With the Internet of Things, your customer data may reside in data streams from multiple contact points and departments, including:
Customer success department
Data within your database may also be stored in multiple categories, such as customer account lists, user lists and activity logs.
When your data is segregated in this way, you run the risk of disrupting customer experience by failing to incorporate important information which from your perspective resides in a different data stream but for your customer figures into their overall interaction with your brand. Improve customer engagement by connecting multiple data streams using a unified integration hub.
Tracking Success at Each Stage of the Journey
Timely response to snags in your customers’ journey depends on real-time monitoring of customer account health. To track customer health, you can set up key performance indicators (KPIs) corresponding to points of engagement along your customers’ journey.
Examples of engagement KPIs for each stage of the journey include:
Lead acquisition: unique visitors, bounce rate and opt-in rate
Onboarding: time to complete onboarding, customer progression and response rate
Adoption: interactive usage, non-interactive usage counters and activation metrics
Escalation: response time, first contact resolution rate and customer satisfaction rate
Retention: retention rate and churn rate
These are just a few examples among many other KPIs you could use. We will discuss a few key categories of metrics in more detail below. For the moment, the main takeaway is the need for defining measurable KPIs to allow you to track account health and engagement. Set up your automated tracking system so that if a KPI on an account falls into a scorecard range indicating a problem, your playbooks can take the lead. SuccessPlays game plan automatically goes into effect.
Creating a Customer Engagement Framework
You can put customer data to use by incorporating it into a framework structuring how you engage with customers. Your framework can be organized around the stages of the customer lifecycle and journey experience outlined above. Using this approach, you would define how you engage with the customer during each stage of their journey:
Within this general framework, you can drill down into each stage and define more specific steps your customer takes in each phase and how you engage with them. For example, the steps which lead a customer from your marketing content to filling out your website’s discovery form can be mapped out to flesh out the lead acquisition stage. You can then identify how you engage with your customer during that stage.
Scaling Communication with Technology
Engaging your customers effectively depends on efficient communication. Communicating personally with each customer could get different for a large database if you had to rely on manual methods, but fortunately, technology allows you to personalize communications at scale for all your customers.
By segmenting your database based on customer profiles, you can deliver personalized content relevant to where each customer is in their journey. This allows you to communicate efficiently with a large number of customers without expanding the size of your customer service team.
Planning Next Steps for Different Stages of Customer Journey and Health
At each stage of your customer’s journey, their progress to the next stage depends upon performing specific actions. You can encourage customers to take actions that lead in the desired direction by mapping out which steps they should be taking at each stage of their journey.
Whether or not they take the desired steps depends on resolving any issues which can impede their journey at each stage. For example, frustration during the onboarding process may prevent them from progressing to becoming an active user. How well your customer is progressing in the desired direction and overcoming such obstacles can be tracked as a metric called Customer Health in Totango’s platform. You can promote a healthy customer account by automating which actions the customer should be taking at each stage as well as what actions you will take in response to potential challenges the customer faces at each step in their journey using your playbook.
Mapping and Optimizing Your Customer Life Cycle
To better promote and track your customer’s engagement at each stage in their relationship with their brand, you should map out their customer journey at each step in their lifecycle and take steps to optimize each stage. The general stages of the customer life cycle have been discussed above:
At each stage, consider ways you might offer value to customers in order to promote optimal engagement and account health. For example, you can offer:
Round table events
One-on-one time during certification workshops or question-and-answer events
Limited-time access to exclusive features
Product roadmap updates, with emphasis on requested features
Review your customer journey map systematically and seek to identify points where you can insert value into the process.
Success can be repeated throughout the customer lifecycle. Once you know which steps successfully promote a healthy account from one stage of your customer journey to the next, as well as what to do to fix an unhealthy account, you can simply track your health scorecards and playbooks.
You can quantify your customers’ engagement with your product by measuring how much time they spend actively using it. This factors out idle time when they’re logged in but not taking any actions. Factoring this out is important because some customers may be logged in when they have multiple tabs open and they’re doing things on other sites or simply not using their device. Focusing on active time gives you a better sense of how much actual time customers are spending using your service.
How often customers visit your site to use your service reflects the value they’re getting from your company. When tracking visit frequency, evaluate results in relation to how often an engaged customer should ideally be using your service. For instance, with some products, you would expect users to log in daily. For others, frequency should be closer to weekly. Determine the level appropriate for your company.
Core User Actions
Core user actions are activities specific to your company that engaged users should be taking. They vary with the nature of your product and can be custom-defined. For instance, if your product is a Human Resources(HR) software, an engaged action might be adding a new employee. Define and track user actions that are relevant to your product.
License utilization is the ratio between the number of active users in an account and the total number of licenses paid for by the account holder. This metric can be useful if your product is priced based on the number of users.
Choose the Right Software to Support Your Engagement Strategy
Implementing a sound engagement strategy focused on measurable goals requires using a suitable software solution. Totango Spark includes features designed to help you track and manage engagement throughout your customer’s lifecycle. Request a demo and see how we can help you drive customer engagement, retention, referrals, and revenue.