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    How to Measure Customer Engagement and Why It’s Important

    September 29, 2020

    The digital era has brought about a significant shift in how successful companies promote themselves. They’re replacing traditional models of advertising in favor of a more holistic approach. With brand authenticity as the overarching principle, marketing strategies have changed, and customer engagement KPIs have come to the forefront.

    If you want to analyze performance, build loyalty, and establish your brand, it’s crucial that you understand how to measure customer engagement. Then, using those metrics effectively, you’ll gain the insight you need to nurture client relationships and grow your business.

    What is Customer Engagement?

    Simply put, customer engagement is the relationship between your brand and your clients. It’s about regular interactions, communication, and establishing an emotional connection that encourages long-term loyalty.

    It’s also about demonstrating how much you appreciate your customers and how you’re helping them achieve their goals. This means proactive involvement, personalized exchanges, and sincere support.  A fully engaged customer gets the best value out of your product or service, maintains commitment, and acts as a brand ambassador. After all, their success is your success.

    Customer engagement comes in various forms, such as: 

    • Social media engagement including liking, sharing, and commenting on posts
    • Interacting with content like personal blogs, podcasts, or videos 
    • Purchasing goods or services online and in-store
    • Attending company events, social gatherings, and demonstrations
    • Using a mobile app or online service

    Why is Customer Engagement Important?

    The digital marketing arena has given rise to an unprecedented number of options available to consumers. But with thousands of companies selling similar products or services, a flawless transactional journey alone isn’t enough to differentiate your brand.

    Even with discounts, gifts, and aggressive advertising campaigns, many companies fail to engage and retain consumers successfully.

    Almost anyone can deliver a perfect start-to-finish purchase experience, but customer expectations have evolved beyond that. Consumers want the best value for their hard-earned cash. They’ll do their research, ask for recommendations, and compare options before spending a dime.

    Customers Buy From Companies That Resonate With Them

    Behavioral economics also tells us that purchase decisions aren’t entirely rational, and emotional factors play a role, too. Ultimately, consumers are more inclined to purchase from companies that resonate with them. 

    According to Gallup, a fully engaged customer represents a 23% increase in revenue and profitability. It’s 37% in retail banking, while in the hospitality industry, an optimally engaged guest spends 46% more.

    The research also shows a consistent link between effective customer engagement and key business outcomes across industries. When consumers believe that they’re getting the best value for their money, they’ll spend more. They flock to brands that go further than making a sale. Therefore, companies that actively engage their audience enjoy better growth and a higher conversion rate than ones that don’t.

    Why Customer Engagement Metrics Matter

    With customer engagement success metrics, you’ll be able to measure how your audience responds to your marketing efforts and what you can do to encourage more active communication. That’s why it’s crucial to include leading indicators on your KPI dashboard. As an integral part of your marketing strategy, this helps to:

    • Analyze performance
    • Identify key areas that need improvement
    • Highlight any urgent issues
    • Adapt your engagement strategy accordingly

    But remember, there’s no “one size fits all” approach. The customer engagement metrics for one company could be something entirely different for another. Your KPIs need to align with your strategic marketing goals to be useful.

    It’s best to determine what indicators are crucial to your objective and which channels are relevant before you start measuring, tracking, reporting, and analyzing the data. Let’s take a look at some of the most common key metrics.

    #1 Likes, Comments, and Shares on Social Media Platforms

    According to the latest data from Statista, an estimated 3.6 billion people use social media worldwide. The research estimates that this number will increase to 4.41 billion by 2025.

     It’s no wonder that social media has become an essential platform for brands to showcase their products and services and interact with their audience. The level and type of response your posts receive can be an excellent indicator of your engagement strategy’s success.

    Likes, shares, and comments aren’t just useful for analysis, though. They’ll also help you gain a better insight into the overall sentiment of your brand and products or services.

    That’s why it matters what kinds of responses you receive. Naturally, positive comments are a win. Most platforms come with built-in customer engagement measurement tools that help manage your social media presence effectively. You can even compare metrics with your competitors and find out how you can up the ante.

    #2 Online Reviews

    Online reviews, whether they’re positive, lukewarm, or negative, can offer some valuable insights. As opposed to low engagement overall, this kind of engagement tells you what you’re doing right, where you can improve, and what you need to address. 

    Nowadays, you’ll find various metric tools that can track and monitor comments. Still, taking a 360-degree approach is vital, especially with so many sites dedicated to reviews. Maintaining your online presence and responding to your customers’ sincere compliments or legitimate concerns also boosts confidence in your brand.

    #3 Mobile App Metrics

    Mobile or m-commerce is thriving. According to the latest reports, approximately 1.6 billion people use their smartphones to shop online.

    The stats also predict that, by 2021, mobile commerce will make up a whopping 53.9% of all ecommerce sales. It’s a medium that many shoppers can’t do without and  business owners can’t ignore.

    It’s an integral part of any successful marketing strategy. Whether you have an online store or provide a service, a well-designed app helps with brand recognition, loyalty, and overall engagement.

    Think about it – if a customer downloads your app, it’s much easier to communicate with them. You can send notifications, reminders, and even personalized messages. And the fact that your brand’s icon is proudly displayed on your client’s smartphone only helps.

    Downloads and Usage

    Tracking the number of app downloads is a fantastic way to gauge whether your engagement strategy is working or if you need to make a few changes. But while it might be a superb indicator, there’s more to it than that. Usage plays a critical role, too.

    It’s pointless if someone downloads your app but never uses it. If you want to measure customer engagement accurately, then this factor must be taken into consideration.

    There are various analytics tools that’ll provide all the relevant data you need, like how long the app was used, which product tabs were opened, and much more. 

    #4 Website Engagement

    For websites, a couple of metrics exist that can help you determine how well customers engage with your website. These include:

    • Bounce rate – the percentage of visitors that “bounce” off of your website without clicking to at least one additional page.
    • Time on site – how long customers stay on your website. Generally, the more time spent, the better it is for your SEO.
    • Repeat visitors and frequency – how many of your customers come back and how often it happens. The quicker they return, the better the frequency.
    • Pages per session – the average number of pages your customers browse on your site. It indicates how much a user resonates with the content or product.
    • Daily and monthly active users – the number of people that visit your site over periods of time. Comparing the amount of daily and monthly users will give you insight into customer loyalty, among other things.

    Context Matters

    Keep in mind that the above metrics must be interpreted in the context of your website and the goals of the page or campaign driving visitors. For example, a high bounce rate and a short time on site could mean two very different things to different brands.

    If your website gives repeat users what they need quickly and easily, then you’re on the right track. But if your goal is to get people on your site for longer, then you might be failing to engage your customers.

    The Bottom Line

    Customer engagement forms part of the all-encompassing principle of authenticity. It’s the process of developing and maintaining sincere relationships with your audience.

     Nowadays, consumers expect more than just a flawless purchase journey. If you want your business to grow, then you’ll have to prove that it’s worthwhile to the customer.

     That’s why it’s essential to measure customer engagement. Whether you use social media, website, mobile, or live event metrics, you’ll be able to analyze performance and tweak your strategy accordingly.

    —-

    Author’s bio:

    Alex Lysak is a CEO of ScanTeam. I have been working in online marketing since 2011, my main areas of expertise are marketing research, social media marketing, and SEO. During 9 years of experience, I have helped many products and startups to develop marketing strategies and to implement them further.

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