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The 10 best metrics for customer engagement

Published 2 months ago
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Why use metrics for customer engagement?

Customer engagement is a critical aspect of any business strategy. It allows companies to understand how actively customers are interacting with their brand, products, or services. By measuring customer engagement, businesses can glean insights into customer satisfaction, loyalty, and overall experience, helping to improve strategies and foster long-term relationships. Effective customer engagement metrics ensure that businesses are responsive to customer needs, fostering a customer-centric culture that drives growth and innovation.

The top 10 metrics for customer engagement

1. Customer Satisfaction Score (CSAT)

Measuring customer satisfaction is fundamental for determining how happy customers are with a company's products, services, or experiences. High CSAT scores indicate positive customer experiences, while low scores suggest areas requiring improvement.

How CSAT is calculated

Customers are typically asked to rate their satisfaction on a scale of 1-5. The CSAT score is then calculated by dividing the number of satisfied customers (ratings of 4 or 5) by the total number of respondents and multiplying by 100 to get a percentage.

What tools can be used to get CSAT data

What average, good, and best in class look like for CSAT

  • Average: 70-79%
  • Good: 80-89%
  • Best in class: 90-100%

2. Net Promoter Score (NPS)

NPS measures customer willingness to recommend a company's products or services to others, thereby indicating overall customer loyalty and satisfaction.

How NPS is calculated

Customers are asked to rate their likelihood of recommending the product/service on a scale of 0-10. Scores of 9-10 are promoters, 7-8 are passives, and 0-6 are detractors. NPS is calculated by subtracting the percentage of detractors from the percentage of promoters.

What tools can be used to get NPS data

What average, good, and best in class look like for NPS

  • Average: 0-30
  • Good: 30-50
  • Best in class: 50-70+

3. Customer Effort Score (CES)

CES measures how easy it is for customers to interact with a company, whether through purchasing, seeking support, or other transactions. Lower effort scores correlate with higher loyalty.

How CES is calculated

Customers are asked to rate their ease of interaction on a scale, usually from 1 (very difficult) to 7 (very easy). The score averages out the ratings to give a single customer effort score.

What tools can be used to get CES data

What average, good, and best in class look like for CES

  • Average: 3-4
  • Good: 5-6
  • Best in class: 6-7

4. Churn Rate

Churn rate measures the percentage of customers who stop using a company's products or services within a specific period. Lower churn rates indicate higher customer retention and satisfaction.

How churn rate is calculated

The churn rate is calculated by dividing the number of customers lost during a period by the number of customers at the start of that period, and then multiplying by 100 to get a percentage.

What tools can be used to get churn rate data

What average, good, and best in class look like for churn rate

  • Average: 5-10%
  • Good: 3-5%
  • Best in class: 1-2%

5. Customer Lifetime Value (CLV)

CLV estimates the total revenue a business can generate from a single customer account over the entire duration of their relationship. A higher CLV indicates a stronger, more profitable customer relationship.

How CLV is calculated

CLV is calculated by multiplying the average purchase value, purchase frequency, and customer lifespan. (Average purchase value x Purchase frequency) x Customer lifespan = CLV.

What tools can be used to get CLV data

What average, good, and best in class look like for CLV

  • Average: Varies by industry; generally calculated against profit margins
  • Good: Increasing month-over-month
  • Best in class: High-value annual contracts/memberships

6. Engagement Rate

Engagement rate measures the level of interaction that customers have with a brand's content, such as likes, shares, comments, and other forms of engagement on social media or web platforms.

How engagement rate is calculated

Engagement rate is calculated by dividing the total engagement (e.g., likes, shares, comments) by the total number of followers or views, then multiplying by 100 to get a percentage.

What tools can be used to get engagement rate data

What average, good, and best in class look like for engagement rate

  • Average: 1-2%
  • Good: 2-4%
  • Best in class: 5%+

7. Active Users

Active users refer to the number of unique users engaging with a product or service within a specific time frame. Higher numbers of active users indicate strong customer interest and usage.

How active users are calculated

The metric is typically categorized as daily active users (DAU) or monthly active users (MAU) based on the number of unique users in those periods.

What tools can be used to get active users data

What average, good, and best in class look like for active users

  • Average: Varies by business type and industry
  • Good: Consistently growing user base
  • Best in class: DAU/MAU ratio of 20%+

8. Time on Site

Time on site measures the average amount of time users spend on a website or digital platform. Higher time on site indicates better content engagement and likely interest in products/services.

How time on site is calculated

This metric is usually recorded through analytics tools that track user sessions from entry to exit on the site, giving an average duration based on total session time divided by the number of sessions.

What tools can be used to get time on site data

What average, good, and best in class look like for time on site

  • Average: 2-3 minutes
  • Good: 3-5 minutes
  • Best in class: 5+ minutes

9. Page Views per Session

Page views per session indicates the average number of pages a user views during a single session on a website. Higher page views per session suggest better engagement with content.

How page views per session is calculated

Divide the total number of page views by the total number of sessions within a specific period.

What tools can be used to get page views per session data

What average, good, and best in class look like for page views per session

  • Average: 1-2 pages
  • Good: 3-4 pages
  • Best in class: 5+ pages

10. Email Click-Through Rate (CTR)

Email CTR measures the percentage of email recipients who clicked on one or more links in an email. Higher CTRs indicate more engaging and relevant email content.

How email CTR is calculated

The email CTR is calculated by dividing the number of unique clicks by the number of delivered emails, then multiplying by 100 to get a percentage.

What tools can be used to get email CTR data

What average, good, and best in class look like for email CTR

  • Average: 2-3%
  • Good: 3-5%
  • Best in class: 5%+

How to track metrics for customer engagement

Tracking customer engagement metrics can be time-consuming but is essential for making data-driven decisions. Using a goal-tracking tool like Tability can save time and help teams stay focused on the right metrics to improve. Tability supports tracking multiple KPIs, visualising progress, and ensuring that teams stay aligned towards their goals.

FAQ

Why are customer engagement metrics important?

Customer engagement metrics give businesses insight into customer behaviour, satisfaction, and loyalty, helping to identify areas for improvement and growth.

How often should customer engagement metrics be reviewed?

It depends on the metric. Some can be reviewed daily or weekly (e.g., active users, time on site), while others might be better suited for monthly or quarterly evaluations (e.g., NPS, CLV).

Can these metrics be applied to all business types?

Yes, although the specific benchmarks and importance may vary, customer engagement metrics can be universally applied across different industries and business models.

What should be done if a metric shows poor performance?

Identify the root causes, formulate a strategy to tackle the issues, and regularly monitor the impact of implemented changes to improve performance.

By consistently monitoring and optimising these 10 customer engagement metrics, businesses can better understand their customers and create more effective strategies to enhance the customer experience.

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