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Why You Should Be Monitoring Customer Engagement Metrics

This article was published on June 27, 2024

Consistent customer engagement is essential for business success — but how can you tell if your efforts are working? Metrics are the key to keeping track of your progress.  The right customer engagement metrics can tell you how consumers interact with your brand. In this guide, we’ll look at customer engagement metrics in detail and explore some popular examples.

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What Are Customer Engagement Metrics?

To understand the value of customer engagement metrics, it's important to understand what engagement itself is. Customer engagement isn’t just about how many customers are coming to your store and buying products. Instead, it’s about the entire relationship a customer has with your brand. It should be viewed as a holistic concept, covering every single interaction they have with you and the sum of all of those individual experiences.

Customer engagement metrics help you monitor engagement across your platforms. You probably already have lots of information about how customers interact with your brand. Unfortunately, raw behavioral data doesn’t tell you a great deal. Metrics help you to understand the context of data and what it means for your wider strategy.

By keeping a close eye on metrics, you can track if engagement is strong enough to help meet your goals. When metrics show unfavorable results, you can alter your tactics. This is the answer to achieving sustainable long-term growth across different platforms.

15 Key Customer Engagement KPIs

One of the difficulties of monitoring metrics is that there are so many to choose from! You may be unsure about which key performance indicators (KPIs) are helpful to you, so we’ve picked out some we think are most important.

1. Net Promoter Score (NPS)

Net promoter score focuses on customer loyalty toward a brand. It asks the customer “How likely are you to recommend our brand?” Customers then assign a score from one to 10. Customers that score nine or 10 are classed as “promoters,” while those that score seven or eight are deemed as “passives.” Those that score less are referred to as “detractors.”

The average NPS for your audience provides a broad sense of how customers view your brand. A score lower than six means you should improve customer experiences — though of course, even if you’re scoring higher than that, there’s probably room for improvement!

The calculation: Subtract the percentage of detractors from the percentage of promoters.

2. Customer Satisfaction Score (CSAT)

Customer satisfaction score is another metric that helps you understand how customers view your brand. CSAT is different from NPS, as it looks at specific customer interactions with your business.

For example, a customer might be asked to rate their experience using customer services. They’d be given multiple-choice selections ranging from “very positive” to “very negative” (or alternatively, asked to rate on a scale of one to five).

The calculation: Divide the number of ‘positive’ and ‘very positive’ answers by the total number of responses. Then, multiply by 100 to get the percentage of satisfied customers.

3. Customer Effort Score (CES)

The customer effort score looks at how easy it is for customers to complete specific brand interactions. This could be using your product or service, navigating your website, or contacting your call center.

CES is collected through surveys. A customer will be given statements such as “It was easy to resolve my issue.” They are invited to respond to the statement, with an answer ranging from “strongly disagree” to “strongly agree.” Customers choose a number between one and seven, with five or above being classed as positive responses.

The calculation:  Add all positive responses together and divide this by the total number of responses. Finally, multiply your result by 100.

4. Customer Acquisition Cost (CAC)

Customer acquisition cost looks at how much you need to spend to acquire new customers. It totals the costs involved in acquisition (advertising, sales team salaries, etc.) and compares this to the number of customers gained.

Monitoring CAC is essential for maintaining business profitability. You can compare the scores of different ad campaigns. If CAC is higher than the revenue generated by a campaign, it should spell warning signs.

The calculation: Divide your sales and marketing costs by the total number of customers acquired over a given period.

5. Customer Lifetime Value (CLV)

Customer lifetime value looks at the worth of customers throughout their relationship with your brand. This is broken into two groups:

  • Historic CLV — Looks at the total amount a customer has currently spent. 

  • Predictive CLV — Tries to project the amount that a customer will spend with your brand.

CLV is useful because it helps businesses know what type of customers to pursue — you’ll reduce the time and expenditure that your business incurs in chasing leads.

The predictive CLV calculation: Multiply the customer value by the average customer lifespan.

6. Churn Rate

The churn rate is the percentage of customers that unsubscribe from a service. To maintain steady growth, brands should always try to stay on top of this metric.

It’s important to remember that the average churn rate is different for each industry. According to CustomerGauge’s B2B NPS® & CX Benchmarks Report, the average churn rate for the IT services industry, for example, is as high as 88%. The retail industry, on the other hand, has a much lower rate of only 44%.

The calculation: Divide the number of lost customers by the total number of customers at the start of a given period and multiply by 100.

7. Conversion Rate

The conversion rate is the total number of customers that complete predefined actions. This could be signing up for a mailing list, purchasing a product, or filling out a contact form.

Monitoring the conversion rate is essential for tracking success. A higher conversion rate means you’re on track to meet your marketing goals. A lower rate means that you’ll need to employ conversion rate optimization tactics (CRO) — for instance, improving landing pages so that customers are more likely to behave the way you want.

The calculation: Divide the total number of conversions by the number of interactions and multiply by 100.

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8. Bounce Rate

Bounce rate refers to the percentage of customers who leave your site after viewing only one page. A high bounce rate suggests that your marketing content isn’t engaging enough to persuade customers to stick around! 

The calculation: Divide the number of one-page visits by the total number of visits to a webpage and times by 100. 

9. User Activity and ‘Stickiness’

User “stickiness” is a metric that focuses on user retention for app-based marketing. High levels of stickiness suggest that your app is engaging enough to persuade customers to continually return. Generally, a stickiness rate of around 20% (two in 10 users) is considered a good figure.

The calculation: Divide the number of daily active users by the number of monthly users and times by 100.

10. Session Time

Session time, as the name suggests, measures the average session duration on your website. A session begins when a user lands on your site and ends when they leave.

Session time should be viewed alongside the bounce rate. Even if people are viewing more than one page, a low session time can indicate a problem. The content might not be interesting enough to engage users, or technical issues might hinder customer experiences.

The calculation: Divide the total duration of all sessions by the number of sessions during a certain period.

11. Feature Usage

The feature usage metric looks at whether customers are using specific product features. This is unlike other metrics such as CES, which provide a sense of a customer’s overall view of a product or service.

Tracking feature usage can provide many valuable insights. Which features see the most engagement? Could similar features be utilized in other products? This metric also helps you to understand less successful aspects of product design. You can refine underutilized features so they see more engagement in the future. Or you can scrap them and focus on building more appealing designs in future products.

The calculation: Divide the number of customers that use a product feature by total product users.

12. Core User Actions Completed

This one is a little trickier than the others, but it’s well worth monitoring due to the potential long-term impact. Generally speaking, a “core action” is any action a user takes that correlates with them achieving your goal. For instance, in a recent interview, former product manager at Pinterest Sarah Tavel noted that users who actively ”pinned” something had a high chance of returning the following week. That makes the act of “pinning” a core action.

In order to use this metric, you first need to work out what your core actions are — for instance, do users who download your app tend to make purchases at a higher rate than those who don’t? Downloading the app would then be a core action.

The calculation: Divide the number of customers who complete core actions by the total number of customers.

13. Ticket Volume

Every time a user contacts customer support, they submit a “ticket.” Ticket volume refers to the number of tickets submitted during a specific period.

It’s a useful metric to track over time; during events such as product launches, it’s natural to have a higher ticket volume. A consistently high volume or a number ramping up over time is more concerning. This indicates a wider problem with your product or service.

The calculation: The sum of all the ticket requests during a specified period.

14. Page Views

As the name suggests, page views are simply the number of views attributed to a website or specific page. This metric can help indicate the success of the content. For more context, it should be viewed alongside other metrics such as bounce rate and session rate.

The calculation: Simply log the number of page views for your website or webpage in a specified period.

15. Social media engagement metrics

As many as 62.6% of the world now uses social media, making it a prime forum for marketing. Despite this, our Global Customer Engagement Report revealed that only 28% of customers comment on the social posts of brands. To succeed, you need to know what does and doesn’t work on social media.

Social media engagement metrics enable you to track the success of posts on different platforms. Of course, each platform has slightly different metrics to track. Some examples are listed below:

  • X (formerly Twitter) — The number of reposts and likes attributed to a post

  • Facebook — The number of shares and reactions 

  • TikTok — The amount of favorites and likes a post has received 

How Can These User Engagement Metrics Help You?

We’ve looked at some top examples of user engagement. You might still be wondering, however, about the benefits of tracking these metrics. Below, we’ve listed some prime examples of the benefits of user engagement metrics.

Better Personalization and Segmentation

Most businesses now recognize that the modern customer seeks personalization. Unfortunately, many businesses aren’t delivering — as Salesforce’s State of The Connected Consumer Report notes, 65% of consumers expect businesses to adapt to their preferences, but 61% feel businesses simply treat them as a number. By personalizing your communication, you can stand out from the crowd. In order to deliver this,  you first need a strong understanding of your audience.

User engagement metrics can tell you a lot about user behavior. This includes how they interact with your brand, how they perceive your products, and whether they like your content. This information can be segmented to give granular insights into aspects of your audience. For instance, you might have users who have a longer session time when viewing certain forms of content.

This information can then be used to power your personalization efforts. You can create more appealing content, better product recommendations, and more.

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Quick Recovery From Things That Aren’t Working

Inevitably, your user engagement tactics won’t always follow the plan. When this occurs, engagement metrics are useful for two reasons. First, you can discover more quickly if your content is getting the engagement that you want. There’s a reduced risk of spending long periods chasing tactics that aren’t working.

Second, metrics can help you get back on track more quickly. You’ll have a better sense of user behavior and what they like and don’t like about your brand. You can use this information to help steer your approach. It’s good practice to continuously monitor metrics to see whether you’re going in the right direction. You can also spot areas where further improvements are needed.

This kind of adaptive approach is only possible with the right customer engagement metrics. They’re a simple way of minimizing the impact of mistakes and crafting a successful approach to customer engagement.

Improved Predictive Analytics

Predictive analytics is the latest innovation in AI technology. Using historical data, market behavior, and other factors, AI tries to predict future trends. Predictive analytics can help with engagement in various ways. It can project, based on your current tactics, how engagement levels will vary in the months ahead.

Analytics can also help to suggest what future market trends might look like. You can then tailor your future content so that it is more likely to be in tune with audience interests.

But to work effectively, predictive analytics needs enough historical data to make accurate predictions. Tracking customer metrics ensures you have data relating to all of your key areas. This means that you’ll get better results from your algorithms.

Streamline the Customer Journey

The easier the customer journey, the happier your audience will be. Unfortunately, roadblocks often cause issues for customers. For instance, a customer could have problems purchasing a product or accessing content. Spotting these issues early is key to keeping customers happy.

As shown, customer engagement metrics provide a variety of important insights. Each metric can help optimize a different aspect of the customer journey. For instance:

  • Customer effort scores can help you understand whether customers can navigate your website easily.

  • Bounce rates let you know if your content is interesting or accessible enough for users.

  • Churn rates indicate whether your service provides enough value to persuade customers to re-subscribe.

  • Customer satisfaction scores provide a broad overview of how customers perceive your brand.

How To Measure Engagement

We’ve established that there are many benefits to using customer engagement metrics. However, measurement is only useful if it is handled effectively and accurately. With that in mind, here are some tips that show how to measure customer engagement.

Clearly Define Your Goals

The process of measuring customer engagement should begin with some introspection. Which areas of customer engagement are important to your business? As we’ve explored, there are many customer engagement metrics. It isn’t practical to track each one; this could result in a data overload and be confusing you and your team.

Consider the areas that are most important for monitoring. Then, create a list of engagement metrics that will be useful to you. How might that look? Let’s consider two very different scenarios that demonstrate how varied customer engagement metrics can be.

First, imagine that you are rolling out a campaign to grow your mailing list. In this instance, “conversion rate” and “bounce rate” are useful engagement metrics. With conversion rate, you can monitor each time a new user signs up to your list. The bounce rate tells you the number of users coming to the page, but not proceeding with the signup process.

Now, imagine you want to monitor how customers are interacting with a newly released product. Here “feature usage” and “customer effort score” are more useful. Feature usage will tell you the most popular features being enjoyed by customers. CES will inform whether or not customers find your product easy to use. Both these factors will be valuable in building better future products.

Have Good Data Infrastructure in Place

Data is an essential part of monitoring customer engagement. If you want to use AI-powered analytics, in particular, you’ll need large amounts of raw data. But for data collection to be effective, you need the necessary infrastructure in place. For starters, you need adequate storage space to house your data.

Large-scale data collection can require extensive warehousing space. This can be expensive, especially if you have to pay for overheads such as security and maintenance. On-site data storage also means that data can only be accessed from the workplace. It may be more cost-effective and practical to outsource stores to the cloud.

However you store your data, ensure you do so in an organized — and secure — way. Without clear procedures, important files might not be stored in the right place. This makes them more difficult to find when you need them. Make sure you have clear naming conventions to increase discoverability. For instance, decide whether entries should be hyphenated (eg. file-one) or contain spaces (file one).

Invest in the Right Software

Software is key to successful engagement measurement. Ultimately, data isn’t that useful in its raw form. You need software that can unpack data and transform it into meaningful insights. Many businesses are undergoing a digital transformation to help embrace data-powered technologies.

Analytics tools are a key part of this change. The right solution can provide in-depth reports on many different aspects of your data. Complete with personalized dashboards, you can get instant access to the metrics you need. Tools also usually include a variety of visualization options to make data accessible to all.

Customer relationship management (CRM) software is another example of an essential tool for monitoring customer engagement. A CRM tool manages all customer-facing business interactions. This means you can easily track customers that are interfacing with your brand. With that birds-eye view, you can streamline processes easily and create more engaging experiences.

Prepare To Handle Both Qualitative and Quantitative Data

Not all data should be viewed through the same lens. There are two types of data: quantitative and qualitative. Each is used for different purposes and collected in different ways.

Quantitative data is data represented by numbers. For example, 1,000 people visited a certain page. This data provides clear insights and, as long as the data is of high quality, cannot be disputed.

Qualitative data is based on opinions and concepts rather than numbers. An example might include responses given to a focus group or a transcript of a call recording from customer support. This form of data can help you understand the thoughts and feelings of customers towards you.

Both forms of data are important for monitoring audience engagement. They must be used hand-in-hand to get the most in-depth understanding of your audience.

Be Consistent

Consistent measurement is important for ensuring the accuracy of your data. Consistency shouldn’t just apply to data collection but also to storage and analysis. Below are some tips for maintaining consistency.

  • Using the same models and formats for all data measurement and analysis 

  • Monitoring data closely to spot any inconsistencies or duplicates 

  • Ensuring chronological consistency so data is in the right order

  • Keeping data entries be the same throughout all databases

  • Collecting, storing, and analyzing data following practices that are compliant with legislation

Regularly Evaluate and Adjust

Engagement measurement is an ongoing process. It’s important that you can pick up on the latest changes in audience behavior and adapt accordingly. For this to happen, though, your measurement needs to achieve sustainable accuracy. 

It’s important to review your data collection methods regularly. Is information error-free? Are you following the previously outlined steps to ensure accuracy? Where issues are identified, it’s important to act in a timely way and adjust your approach.

Rinse and repeat this process every few months, and you can ensure that measurement is as accurate as possible.

Time To Start Tracking

Audience is key to business success. But without tracking customer engagement metrics, you won’t know if your strategy is on track. As we’ve explored, there are many different metrics to choose from. With so many options, it can be difficult to know what you should and shouldn’t track.

To simplify the process and elevate customer experiences, you can use Vonage CRM integrations. We integrate your business phone system with your CRM, collaboration, and business productivity applications. From here, you get easy access to the information you need to track customer engagement.

To learn how we can help, why not talk to an expert today? It’s time to take your tracking to the next level.

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