7 essential customer engagement metrics

7 essential customer engagement metrics

June 12, 2024

Boosting customer engagement only has an upside. It’s correlated with long-run loyalty, low churn, and steady top-line growth.

But strong customer engagement doesn’t happen by accident. It requires a well-crafted strategy that addresses all touchpoints of the customer journey. To ensure your efforts are paying off, you need to track the right key performance indicators (KPIs).

Let’s explore some of the most impactful user engagement metrics that can unlock a deeper understanding of your audience and ensure you're meeting their needs effectively.

What are customer engagement metrics?

Some aspects of customer engagement, like their emotional relationship to your brand and likelihood of jumping ship for a competitor, can’t be distilled down to a number.

But key customer engagement metrics can approximate how your existing customers feel about working with your company. This has profound implications for sales, marketing, customer success, and various other departments in your organization. They can use customer engagement data to double down on what’s working well, and pivot when a particular strategy doesn’t resonate.

Think of them as insights that reveal not only what customers are doing, but why. How customers navigate your website, which offerings capture their attention, and how frequently they interact with your brand on social media can all be leveraged to improve the user experience.

Why measuring your customer engagement rate matters

Loyal customers are a huge asset for your business. They’re likely to stick around for the long haul, reducing your overall customer churn rate. But more importantly, they can be authentic ambassadors for your brand.

Word-of-mouth marketing has risen in prominence in the age of social media and online reviews. It’s so easy to consult the experiences of peers that most people will ask a friend or visit a review site before making a big purchase. Boosting the number of customers that are willing to vouch for your business can lead to a positive ripple effect that’s hard to replicate through other channels.

To measure customer engagement, you need to synthesize a number of different metrics. Here are the most impactful ones to keep track of.

7 essential customer engagement metrics to track

1. Net promoter score (NPS)

If there’s one KPI to prioritize above all others, it’s net promoter score (NPS). NPS is marketing teams’ go-to metric for gauging customer loyalty and their willingness to become brand advocates.

Its beauty lies in its simplicity. Just one simple question, "on a scale of 0 to 10, how likely are you to recommend our company to a friend or colleague?", can uncover a wealth of insights.

Customers who respond with a 9 or 10 are considered Promoters—your most enthusiastic champions ready to spread the good word about your business far and wide. Passives (7-8) are satisfied but not overly enthusiastic, while Detractors (0-6) are unhappy customers whose negative feedback can do just what they’re called - detract.

Consider sending an email to those that answer highly of your brand to 1) thank them and 2) kindly ask if they’d consider writing a review on a platform like G2. You can reward them with a gift after they’ve left the review as well!

2. Customer satisfaction score (CSAT)

CSAT is another widely-used customer engagement metric. It determines a customer’s satisfaction level with a particular product, service, or interaction instead of the overall brand.

Typically, CSAT surveys consist of questions like "how satisfied were you with your recent purchase?" or "how would you rate your recent interaction with our customer support team?" Responses are measured on a 1-5 scale, where 1 represents "very dissatisfied" and 5 signifies "very satisfied."

Marketers can aggregate these responses to come up with an average CSAT score, which serves as a benchmark for your overall customer satisfaction level.

Consider sending a follow-up note to those who were dissatisfied with service, noting that you are: 1) sorry they were not satisfied, 2) correcting the problem right away, and 3) sending a coffee shop gift card as a treat to help them get through the tough time.

3. Customer effort score (CES)

Patience is a virtue in short supply in the digital age. Customers want their buying experiences to be quick and seamless—if they have to expend a lot of effort to make a purchase or get an issue resolved, they’ll usually walk away dissatisfied.

That’s the idea behind CES. Brands should strive to keep this score low, as it indicates a smoother, more intuitive customer experience.

For instance, let’s imagine an e-commerce retailer that notices a high CES for their returns process. Customers report that it's complicated and time-consuming. The retailer could focus on streamlining the returns process to reduce the customer effort involved.

Consider sending a follow-up email to the customer who reported the issue to let them know it has been resolved. Include a gift to thank them for bringing the issue to the company’s attention and helping improve the user experience.

4. Conversion rate

In a nutshell, conversion rate measures how effective your marketing efforts are at different touchpoints. It calculates the percentage of potential customers who take a desired action, such as signing up for a newsletter or downloading a resource.

Tracking conversion rates across the customer journey helps you identify where they’re dropping off and optimize your marketing campaigns and messaging for better results.

If there is a specific sequence with a gap that allows leads to stop engaging, consider automating a gift send within a certain number of days after the last interaction as a reminder that your company is still interested in earning their business.

5. Churn rate

Organizations ignore churn at their peril. It can be easy for inexperienced marketers to focus all their time and attention on acquiring new customers, but if your existing customers are consistently heading for the exits, your business won’t grow. You’ll have to continue acquiring new customers just to replace the customers leaving.

Churn rate is the percentage of customers you lose over a given period. A high churn rate is usually indicative of some underlying issue, be it product quality, customer service, or pricing. It’s crucial to identify spikes in churn quickly so that you can pinpoint where the problems are and address them promptly.

Using a CRM in order to identify your customers whose contracts are set for renewal in the upcoming months is the first way to stay ahead of the churn curve. Reach out proactively prior to asking for a renewal to get a pulse on how they are liking your product. Follow-up the conversation with a personalized gift based on something from your discussion. You’ll be remembered as a caring partner when the renewal comes up.

6. Active users

Tracking daily active users (DAU) and monthly active users (MAU) is especially crucial for SaaS businesses. Venture capital firms pay close attention to these metrics when evaluating seed investments. Plus, it’s a great barometer for the health of your platform.

DAU counts the number of unique users who visit your platform within a 24-hour period. It’s a real-time snapshot that reveals how many customers are using your offering on a daily basis.

MAU, on the other hand, measures the number of unique users who engage with your product within a 30-day window. It filters out the noise that comes with DAU, and offers a broader perspective on customer retention and overall platform health. It’s simple, the more people wanting to use your product, the better it’s working.

Consider sending a gift to congratulate users when they reach a certain metric, such as getting five team members signed up and using the platform for the first time within a month.

7. Customer lifetime value (CLV)

Your customer base is diverse, and the reality is that some customer relationships are more valuable than others. Those that become repeat buyers and tell their friends about your brand have a high customer lifetime value (CLV), and you should try to get as many of your users into this camp as possible.

CLV is a forward-looking metric that hones in on repeat purchases, upsells, cross-sells, and the potential for valuable referrals. Basically, it tells you how much net profit you can expect from a customer over their entire relationship with your business.

Consider inviting your customers with the highest CLV to a special group or internal community where they will get exclusive access to new products, 1:1 meetings with the product team for questions, or executive networking opportunities to show them special recognition and thanks.

Offline engagement: The cornerstone of an effective customer engagement strategy

There are countless ways to build a base of satisfied customers—social media engagement, email marketing, and other digital marketing strategies are popular among modern marketers.

But there’s a limit on the depth of connections you can achieve digitally. Offline engagement, via strategies like strategic gifting, can help you achieve more memorable customer interactions. Unlike email campaigns, which can be stopped in their tracks with a single ‘unsubscribe’ click, tangible gifts can leave a lasting impression and make your brand stand out among the noise.

There’s no finish line to achieving a strong engagement—it’s an ongoing journey. With our all-in-one offline engagement platform, Postal can be your ally and help you strategize ways to enhance your current engagement methods. Chat with us today and hear more about how our solutions can unlock additional power for your customer engagement.

Keely Lords
Keely Lords

Keely Lords is the Brand Manager at Postal, the leading gifting platform for offline engagement that creates memorable moments for organizations to generate leads, increase sales velocity, and retain happy customers. Prior to Postal, Keely was a "jane of all trades" with roles in various industries including accounting and consulting at Deloitte, business operations for a technology start-up, and proposal writing for branded corporate events. She currently lives in Bakersfield (where her family has farmed for over 100 years) with her husband, Austin, and rescue dog, Polly.