Customers make your business go round. They’re the best indicator of where the business should be headed and they’re the reason you have a bottom line. But to continually ensure that you’re growing your customer base — and not doing anything that’ll drive them away — you need data. That’s where customer engagement metrics in.
Understanding these metrics is crucial to knowing how different business decisions can impact your customers and, eventually, your bottom line. Tracking and reviewing these metrics should be part of your business strategy across all teams but especially customer support, marketing, and sales.
Here are the 10 essential customer engagement metrics your business should be tracking.
Click-through rate (CTR)
Click-through rate (or CTR) is a customer engagement metric metric used in a variety of marketing and sales initiatives — and even the occasional customer support effort. This metric tracks how often people click on specific links or calls to action (CTAs), using the following formula:
clicks ÷ impressions = CTR
“Impressions” is a word that refers to how many times a link or CTA is shown to your customers.
A high CTR means that your message, content, or initiative, is relevant, compelling, and closely matched to your audience. By tracking this metric, you can determine how successful these initiatives are, and correct them as needed.
Conversion rate is a metric that measures how many website visitors, app users, or another audience takes a desired action. That action can be anything from clicking a link in an email, signing up for an account, filling out a contact form, or buying a specific product. This metric might be the most closely related to customer engagement, since it often directly tracks how many potential customers become actual customers — in other cases it’ll track how engaged they are with specific content or products after they become customers.
This is one of the most essential customer engagement metrics for a wide range of initiatives. Content marketers might use conversion rates to see how effective different content channels are for turning visitors into customers. Customer support teams might use this metric to measure the effectiveness of a chat bot, and sales teams might use it to track the results of specific reach-out campaigns.
Net promoter score (NPS)
Net promoter score (NPS) measures how likely it is that a specific customer will recommend your company’s product or service to others. This score is often measured on a scale from -100 to +100. Data for this metric is usually collected based on a survey sent to customers that asks them how likely they are to recommend your business using a scale from 0 to 10. If a customer gives a score of 0-6, they’re known as detractors, while customers who give scores of 9 or 10 are promoters. After this data is collected, the company’s NPS score is calculated using this formula:
% of promoters – % of detractors = NPS
These percentages are, of course, calculated from your overall customer base. For instance, you’d find the % of promoters by dividing the total number of promoters by your total customer base and multiplying the result by 100.
Customer lifetime value (CLV)
Customer lifetime value (CLV) is crucial for determining how well your business is meeting your customer’s needs. It measures the total amount of revenue a customer will generate over the entire time they’ll spend using your products or services. A high CLV usually indicates that your customers are generally more engaged with your product or service — and that your customer retention initiatives are successful.
A low CLV means that they’re overall less engaged, and will generally spend less on your product or service. Now it’s important to note that these values can be overall lower for some industries when compared to others, so be sure to use benchmark values from your industry.
Social media engagement
Social media engagement is a crucial metric that measures the number of likes, comments, shares, and other interactions received on a business’s social media content. This metric is essential for judging how effective your social media channels are at keeping customers — and potential customers — engaged with your brand. That’s crucial for marketers who might otherwise spend a ton of time working on social content that isn’t really driving any business goals.
Engagement can be measured in different ways, but usually includes every kind of action a visitor can take on social media, from commenting to liking and sharing content.
Email open rate and click-through rate
Email open rate and click-through rate are essential metrics for measuring the success of your email campaigns. Open rate refers to how many recipients actually open your email while click-through rate is how many of these people click on a link or call to action within that email. With these metrics, you get the information you need to adjust your email campaigns for maximum impact instead of just sending them out into the aether and hoping they’ll work.
Low open rates usually mean that your email’s subject line isn’t engaging enough, while a low click-through rate means the actual content in the email isn’t engaging enough for its recipients.
Customer satisfaction (CSAT) score
Customer satisfaction (CSAT) is a vital metric that gauges how satisfied customers are with a business’s products, services, or interactions. This metric will tell you how likely customers are to leave positive reviews and advocate for the business to other potential customers. With these numbers, businesses can track the impact of various customer support initiatives and other strategic choices.
Customer satisfaction can be measured through surveys, reviews, feedback, and customer support interactions. By analyzing this data, businesses can identify any trends or areas where they could improve their customer’s experience.
Retention rate is a vital metric that measures how well a business can keep its customers over time. A high retention rate indicates that businesses are providing value to its customers and retaining customers through effective engagement. Because it’s cheaper to keep existing customers than to acquire new ones. By understanding their retention rate, businesses can evaluate their customer base’s health and identify areas for improvement in their customer engagement strategy.
High retention rates mean customers are satisfied with the business’s products, services, and customer support, potentially leading to greater customer loyalty and referrals.
The churn rate measures how many customers are leaving or discontinuing their relationship with a business over a given period. Think of it as the opposite of a retention rate. A high churn rate indicates that customers are not satisfied with the business’s products, services, or customer support, and are choosing to leave. This metric reflects how effective a business’s customer engagement strategy, the quality of the product or services provided, and the overall health of the customer base.
Tracking churn rate can ring alarm bells and lead businesses to investigate why customers are abandoning a business. From there, you can identify areas of the business causing these losses, and find ways to improve them.
Average response time (for customer inquiries)
Average response time measures how long it takes for a business to respond to a customer’s request or query. A high average response time indicates slow customer support and can negatively impact customer satisfaction and engagement. Businesses that prioritize quick and efficient responses to customer messaging create better customer experiences and foster customer loyalty. By monitoring average response time, businesses can identify areas where they can improve their customer engagement strategy, and optimize communication systems to improve response time.
Tracking customer engagement metrics gives you a better picture of how effective your business’s initiatives are. Whether it’s improving the customer support team’s response time, fine-tuning your marketing efforts, or tailoring your sales team’s approach, tracking these metrics will give you the information you need to make better decisions.