Table of contents
Table of contents
- Defining customer engagement
- Customer engagement and personalization
- Measuring customer engagement
- Customer engagement metrics for websites
- 7 best practices for boosting customer engagement
According to Gallup, fully-engaged customers represent a 23% premium in terms of share of wallet, profitability, revenue, and relationship growth over the average customer.
Defining customer engagement
Customer engagement is about connecting brands with customers — both prospective and existing — through a variety of channels, in order to establish and evolve a meaningful and loyal long-term relationship.
Naturally, much of the dialogue — whether it is facilitated through social media, email, websites, forums, widgets, apps, in-person (offline) interaction, or any other touchpoint — will cover various products and services, simply because that is what customers are interested in. However, customer engagement seeks to go deeper and reach customers on an emotional level by focusing on their goals, aspirations, concerns, and pain points. It is about relationships, not transactions.
Customer engagement and personalization
The engine that drives effective customer engagement is personalization. Consider these statistics:
- 90% of customers find personalization appealing.
- 80% of customers are more likely to make a purchase from a brand that offers personalized experiences.
- 72% of customers only engage with personalized messaging.
- 66% of customers will not purchase from a company if they are presented with generic content instead of personalized content.
- 42% of customers get annoyed and frustrated when content is not personalized.
Essentially and unsurprisingly, customers want to be treated as unique and important individuals (which of course they are!), and not as a number (which of course they are not!). Brands that integrate personalization into their customer engagement strategy and program — which involves leveraging rich audience and data analytics to meet individual needs in real time — do not just have happier customers than their impersonal competitors; they have more profitable customers, too. According to research by Gallup, fully-engaged customers represent a 23% premium in terms of share of wallet, profitability, revenue, and relationship growth over the average customer.
Measuring customer engagement
There are many ways to measure customer engagement to establish baselines, track ongoing performance, and improve results. Some common metrics and key performance indicators (KPIs) include:
Guest checkout rate
Used in the e-commerce space, guest customer checkout rate is calculated by taking the total number of orders placed by guests (i.e. individuals who did not create an account) and dividing that by the total number of orders.
Why is guest checkout rate such an important customer engagement metric? Because individuals who create an account are more likely to make a repeat purchase. They are also more willing to receive ongoing communications and content, which helps brands stay top-of-mind.
Purchase frequency is calculated by taking the total number of orders in a specific period (e.g. one year) and dividing that by the number of unique customers over that same time period.
This metric helps brands understand how long it takes for customers to make a repeat purchase, which is an indication of how engaged they are. The word “indication” here is important, because there can be many other factors that influence or impede purchase frequency, such as the type of product/service, price position, and durability (for example, obviously the purchase frequency for new car sales will be significantly lower than it will be for a mechanic that provides oil changes and other vehicle maintenance/repair services).
However, in the big picture, purchase frequency can be an insightful measure of customer engagement, particularly when it is compared against competitors. All else being equal, if a brand’s purchase frequency is substantially lower than others in its marketplace, then the primary root cause is likely weak customer engagement.
Repeat purchase rate
Repeat purchase rate is calculated by taking the number of repeat customers during a period of time (e.g. one year) and dividing this by the total number of customers.
On average, repeat customers spend 3x more than new customers. With this in mind, brands that do not see a sudden and dramatic spike in repeat sales should not necessarily sound the alarm. The average repeat customer spends 67% more with a favorite brand in months 31-37 after starting a relationship, than they do in months 0-6.
Net promoter score
Net promoter score® (NPS) gauges loyalty by asking customers to answer the question: “Using a 0-10 scale, how likely is it that you would recommend [Brand X] to a friend or colleague?” Respondents are grouped in one of three categories:
- Promoters (score 9-10) are loyal enthusiasts who will continue buying and referring others. Obviously, these are the most coveted types of customers. Promoters have a lifetime value that is 600% - 1,400% higher than Detractors.
- Passives (score 7-8) are generally satisfied and have no significant complaints. However, they are unenthusiastic, and therefore vulnerable to offerings from competitors.
- Detractors (score 0-6) are unhappy — and in some cases very unhappy. In addition to boycotting a brand, they can, will, or have already sought to damage that brand’s reputation. The potential bottom-line harm here is severe: 60% of consumers say they are heavily influenced by negative reviews, 49% of consumers insist on at least a 4-star rating before they feel safe choosing a business for the first time.
An effective way for brands to improve NPS is to categorize activities along their customers’ value chain into one of three categories: value-creating activities, value-charging (monetizing) activities, and value-eroding activities. Brands can then identify and leverage “wow” moments — which typically happen in the immediate aftermath of value-creating activities — to foster customer engagement, while they minimize (and ideally eliminate) activities that lead to disengagement.
Customer engagement metrics for websites
As we have all experienced — especially since the emergence of COVID-19 — the business landscape is becoming increasingly digital. This has amplified the need for brands to meaningfully connect with current and future customers through their website, by delivering content such as:
- Thought leadership articles
- Blog posts
- Buyer’s guides, checklists, and other top-of-funnel (TOFU) collateral
- Videos (on-demand and live streaming)
The importance and value of delivering excellent content — which means content that is accurate, compelling, and relevant — cannot be underestimated, given that it now takes an average of 6-8 marketing touches to generate a single viable sales lead. And in the B2B space, the customer journey can last for several months, or even years. As such, it is necessary to provide various customer personas (e.g. executive, technical, operational, risk, security, etc.) with dozens, if not hundreds of pieces of unique content to keep the relationship fresh, dynamic, and moving forward.
Below, we highlight some of the most useful website metrics, which help brands measure, track, and optimize their flagship digital property for driving customer engagement:
It is said that “the classics never go out of style,” and pageviews is one of the oldest — but still among the most important and valuable — content-specific metrics.
As the label suggests, pageviews captures how many times a web page is viewed during a period of time (e.g. day, week, month, quarter, etc.). Surprisingly to some folks outside of the digital marketing world, strong pageview performance — which should be measured by comparing against past performance, as well as industry/marketplace benchmarks — does not in itself mean good news. On the contrary, it could indicate the presence of some significant problems.
For example, imagine that an organization invests significantly to improve its visibility in search engine results. After several months, key webpages start appearing in the coveted “top 3” Google results. The organization is delighted with its SEO investments and efforts, and their enthusiasm is buoyed by a sustained spike in webpage traffic. In the past, their homepage was visited an average of 1,200 times per month, and now it is welcoming an average of 4,000 visitors per month. Viewed in isolation, this is clearly a positive development.
However, if many or most of those 4,000 visitors are not entering into a relationship — i.e. they are choosing not to engage — then the organization has to dig deeper and determine why. For example, it may come to light that the page is riddled with functionality problems (e.g. buttons that don’t work, scripts that don’t run, etc.). Or it could be that visitors simply aren’t impressed by what they see and experience, and instead of moving forward into a relationship, they click their browser’s back arrow. There are many potential reasons for under-performing webpages. Rooting them out and resolving is critical. Otherwise, customer engagement cannot happen.
Conversion rate measures the percentage of visitors who complete an action that moves them forward on the customer journey. Examples include:
- Downloading an ebook, report, buyer’s guide, whitepaper, checklist, or any other asset
- Subscribing to an email newsletter (or any other kind of email/mobile communications)
- Submitting a form to request a demo, speak with a sales rep, etc.
- Signing up to access premium content
Measuring, monitoring, and optimizing conversion rate involves establishing baselines, and running experiments like A/B testing (also referred to as split testing and bucket testing) to identify methods that are driving conversions, as well as those that are impeding conversions and contributing to bounce rate (which we look at next).
If conversions bring joy to digital marketers’ hearts, then bounce rate fills them with anxiety — especially since visitors who leave (i.e. “bounce away”) may never come back.
Measuring bounce rate is straightforward: calculate the percentage of visitors who exit a website after only viewing the page on which they arrived, such as the homepage, a product page, a landing page associated with a pay-per-click ad, etc. What’s more, the majority of visitors who ultimately bounce away make that fateful decision within 15 seconds. We have heard that first impressions are important. On the web, it is critical.
A high bounce rate could indicate problems with a page, such as poor navigation, slow-loading images, boring or confusing messaging, and so on. Why do we say “could indicate problems with a page” instead of “absolutely indicates problems with a page”? Because in some cases, the problem is not with the arrival/landing page itself; it is rooted in the referring page.
For example, consider an organization that launches a pay-per-click advertising campaign, which entices visitors to click-through and download an insightful infographic. However, if the landing page fails to provide the infographic, or fails to clearly provide agreeable steps to get this asset, then visitors will rapidly head for the exit. This will not necessarily be because they were irritated or unimpressed with what they saw after clicking the ad, but because the ad promised them something that the landing page (which in itself might be great) did not deliver.
Top exit pages
As discussed above, bounce rate captures the percentage of visitors who exit after viewing one page. But what about visitors who navigate to at least one other page, and then decide to leave? By tracking top exit pages, brands can see where and how frequently visitors are terminating the session, so they can make adjustments that make the relationship “stickier.”
Some pages will always have a high bounce rate, such as a “thank you” page after a visitor completes a significant conversion action (e.g. makes a purchase, requests a demo, etc.). Obviously, brands would like to keep visitors on their site for as long as possible. To that end, they wisely invite post-conversion visitors to re-ignite their engagement by, for example, watching a video, reading an article, exploring other products and services, etc.
The bad news is that many visitors will still leave, simply because they sense that the task they wanted to accomplish has been completed. The good news is that unlike their exiting counterparts who are captured by the bounce metric, the vast majority of folks who leave “thank you” (and other confirmation/closure-type pages) are neither frustrated nor racing to a competitor. They remain engaged and will resume the journey when they deem it desirable or necessary.
Time-on-page and time-on-site
Time-on-page and time-on-site are separate metrics, but they are often paired because they are both concerned with duration — which is a key indicator of customer engagement (or lack thereof).
While these metrics are valuable, they can also be misleading for a rather strange reason. In the distant past when the web was younger and browsing was still in its relative infancy, most people closed their browser tabs when they were finished with a webpage or a site. Why? Well, there were a few basic reasons, any or all of which could apply: it was the logical thing to do, it was a habit, and/or it freed up precious RAM.
These days things are quite different, especially among business users who have ample RAM on their device and find it convenient to leave tabs open for hours, or sometimes even days and weeks. Naturally, this common practice dramatically skews time-on-page and time-on-site numbers, and creates the false impression that visitors are spending far more time interacting with a page or site than they actually are.
To help clean up the data and give brands a more accurate picture of what is really going on, site monitoring tools can be configured to filter out visitors who do not perform a micro-conversion within a certain period of time (e.g. 30 minutes).
Unique visitors, new visitors, and returning visitors
While brands want to lay the digital welcome mat for absolutely everyone who arrives on their website, for customer engagement measuring and optimizing it is important to distinguish between three types of visitors: unique, new, and returning.
- Unique visitors are individuals who visit a website at least once during a specific reporting period.
- New visitors are accessing a website for the first time, or for the first time on a certain device.
- Returning visitors have previously visited a website.
There are a couple of important things to note about this trio of customer engagement metrics. The first is that “individual” does not necessarily mean a B2C visitor. It could certainly refer to an employee who is accessing a site on behalf of her or his employer.
The second thing to note is that determining who is — and who is not — a unique, new, or returning visitor is not an exact science. This is because the determination is based on “cookies,” which are small blocks of data that download in the background to a visitor’s browser and (among other things) distinguish visitor A from visitor B from visitor C, and so on. At least, that is how it works in theory.
In practice, things can be rather different — and far messier. Some visitors have instructed their browser to block cookies from being downloaded in the first place. In addition, some visitors may access the same site from two different devices; for example, from their home office PC, and then half an hour later from their smartphone. Since each device will have its own cookie (presuming of course that cookies are not blocked), this single visitor will be measured as two visitors. And if that was not complicated enough, many households share devices. If three people who use the same computer visit the same site three different times, but use the same browser with the same cookie, then it will be tracked as a single returning visitor instead of three unique visitors.
Despite these limitations and complexities, for customer engagement it is nevertheless valuable to capture and track unique, returning, and new visitors. For example, a significant stream of returning visitors suggests (and this view can be augmented with other metrics/data) that a brand has a strong, loyal following. Conversely, an apparent dearth of returning visitors could trigger the need to create and deliver new, better content.
7 best practices for boosting customer engagement
Getting customer engagement right is not just a priority — considering the enormous benefits and advantages, it is an imperative. Here are seven best practices that could mean the difference between succeeding and struggling:
1. Start by focusing on customer needs
It can be tempting for brands to build and shape their customer engagement strategy and plan around their products — simply because they are intimately familiar with them, and have ready access to various subject matter experts (e.g. developers, designers, engineers, sales reps, etc.).
As mentioned earlier, products do indeed play a central role in the overall customer engagement ecosystem. But to foster a lasting, loyal relationship that will ideally last for several years or even decades — it is necessary to focus on their values, aspirations, challenges, goals, and pain points. Addressing customer needs is the key to mapping out customer journeys that generate engagement and drive business results.
2. Get personal — but not invasive
Personalization is another pillar of customer engagement that was discussed earlier — and is worth a deeper look because of a mistake that even some of the most well-intentioned brands can make: they cross the line between personal and invasive.
For example, interaction data might reveal that a certain customer prefers gluten-free products. A brand can effectively and appropriately leverage this insight by presenting the customer with recommendations for gluten-free recipes. If the customer wishes, she can explore those recipes. Otherwise, she can ignore them. She remains in control at all times and does not feel as if her experience is being manipulated, or that “Big Brother” is watching her every move.
3. Establish a baseline for content
We are all familiar with the saying “you cannot manage what you cannot measure.” Well, there is another axiom that is worth highlighting in this discussion on customer engagement best practices: “if you do not know where you have been or where you are, then you will not know where you are going.”
Simply put, this means that brands should establish a baseline for all content assets — including but certainly not limited to their website — so they can piece together a 360-degree view of their customers.
4. Volume matters — but value matters even more
Brands need to create and distribute content, content, and yet more content. Indeed, while in the distant past it was fine for brands to churn out a few blog posts a month, and perhaps a guide or whitepaper each quarter, these days there must be a steady stream of relevant and compelling content across the entire journey.
However, while volume surely matters, value is even more important. Two out of three consumers care more about experience than price. Brands that excel in creating human connections through exceptional content will enjoy strong customer engagement, and reap ongoing rewards.
5. Reduce friction across customer journeys — but don’t eliminate it
Confusing forms, dysfunctional websites, hidden buttons, and other pitfalls create friction across customer journeys — and trigger customer frustration. Obviously, these threats need to be addressed and removed.
However, a minimal amount of friction — which results from strategically designed and deployed micro-interactions and micro-conversions — is neither a distraction nor a disruption. Rather, it is an agreeable (at best) or unnoticeable (at worst) invitation to interact, which is beneficial for both customers and brands alike.
6. Collaborate with the sales team
Marketers should implement workflows to supply the sales team with customer interaction insights, which they can leverage to create thoughtful messaging and choose specific content that supports outreach objectives. While they each have their respective mandate and responsibilities, marketing and sales need to work as a cohesive team: marketing is responsible for delivering timely and personalized content that educates and creates qualified leads, while sales nurtures and engages customers across a variety of channels to establish business relationships and increase close rates.
7. Choose the right CX platform
The right customer experience platform powers personalized experiences across channels and touchpoints through:
- Comprehensive digital marketing tools
- A holistic view of customer data
- Machine-learning generated insights
Brands that fully optimize a superior customer experience platform and exploit all of the benefits — from proactively recommending content to accelerating new product speed-to-market — no longer have customers in the conventional sense. Instead, they have dynamic communities that are populated by a growing roster of enthusiastic and fiercely loyal ambassadors. Indeed, in the hearts and minds of those they serve, such brands are no longer perceived as “sellers,” but rather as “partners.” They do not administer transactions — they unleash transformations!
To learn more about how Sitecore can help you with customer engagement, read how Chick-fil-A saw a big revenue increase by improving online customer engagement or get in contact with one of our experts.