Customer engagement score – quick summary

• Customer engagement refers to all the ongoing meaningful interactions between a brand and its customers across all touchpoints over a customer’s user journey.
• Measure customer engagement and identify different segments of users based on the engagement scores
• Start measuring customer engagement scores by identifying your core product events and assigning a weighted score to each.
• Multiply the weight of a single event by the frequency of these events to get an event value. Finally, add all event values per customer to get the customer engagement score.
• Segment users by scores and nurture users with a low score, look for account expansion opportunities among multiple users with a high engagement, and reach out to users when there is a spike or a drop.
• Build in-app experiences and drive product engagement with a tool like Userpilot.

What is customer engagement in SaaS?

Engagement refers to the ongoing meaningful interactions between a brand and its customers across all touchpoints over a customer’s lifecycle.

Engagement takes place through various channels including email, in-app experiences, live chat, and more. Adopting an omnichannel customer engagement strategy for your SaaS ensures that the messaging and service between the brand and its customers are more seamless.

In addition to that, engagement differs from one company to the next, depending on the frequency and intensity of customer interactions. There is no one-size-fits-all standard for good user engagement. This is why it’s important to measure customers’ interactions with your product and the engagement rate to be able to determine the health of your business.

What is the customer engagement score (CES)?

The customer engagement score (CES) is a key metric that measures how engaged your existing customers and free trial prospects are. Each user’s engagement with your SaaS is reflected through a score based on action or inaction.

Healthy and happy customers usually have a higher score than unhealthy and disengaged customers.

Why should you care about the customer engagement score?

In short, it helps you leverage specific business opportunities by customizing your messaging and in-app experiences to specific segments, based on their needs.

For example, a low engagement score during the trial period can indicate a more urgent need to focus on those specific accounts and test different approaches to drive engagement with key features of your product in order to increase the trial-to-paid conversion rates.

But it’s not just a lack of engagement you can act on. A sudden drop in the number of engaged customers can signal a problem and proactively reaching out to those users can help reduce churn.

CES also helps you identify happy and engaged customers. These customers are likely to upgrade their subscriptions or be persuaded to subscribe to add-ons if you reach out to them in a contextual way, increasing overall company revenue through customer expansion opportunities (upsell or cross-sell).

The score is measured and calculated individually for each customer. This helps you to take meaningful personalized actions to foster loyalty, reduce churn and improve customer retention.

How to calculate the customer engagement score?

To calculate the CES, you need to incorporate a variety of events together to get an accurate number.

You are looking to track engagement events like:

• Frequency of product usage – how often the users access your SaaS application
• What key features do users engage with or not
• Specific actions the user takes in the app
• Customer upgrades and renewals
• Support tickets opened by a customer

The events mentioned above are not cast in stone. They will differ in terms of importance from one SaaS to another. However, once all the relevant events are taken into account, the result is a precise measurement of your customer’s success, health, and engagement.

Let’s look into the exact steps to calculate the CES:

Step 1. Identify key events and define what engagement means for your product

You first need to define what engagement means for your product across the entire user journey.

How?

Start by looking at customer behavior within your app. You want to know how customers engage with your product across the entire user journey.

Once you have this overview, the next step is to find the key events that are most important for your customer’s success. Every stage of the customer journey has one or more important events.

Who is an active user and who is not? And more importantly, what exactly does an individual user need to do in your app to be included in the daily active users’ segment?

For example, a social media scheduling tool like Postfity might consider a customer engaged and active in the first part of their journey based on their activation point key events:

• link social media accounts
• create a social media post
• schedule a social media post

However, activation is only one key stage of the user journey. You need to identify the important events across the whole customer lifecycle that signal the behavior of an engaged user, for each user persona segment.

Think of it like tracking a product engagement score but also add interactions with your teams as relevant key events.

Step 2. Track engagement using event tracking

Tracking how many users interact with your product will require you to set up product analytics to track engagement at every step of the user journey.

It is important to determine what you need from a user engagement tool in terms of analytics. This will help you pick a specific analytics software for your tracking needs.

Most tools will require you to set custom event tracking if you are looking to track product engagement. This is a necessary evil if you need to understand when specific events happen.

For specific in-app user engagement, you can use a tool like Userpilot that not only allows you to track feature engagement without setting up custom events but can also launch in-app guiding experiences to drive product engagement. Simply tag any UI features to ensure better tracking.

Step 3. Assign an engagement score to each event

It is time to assign a score to each key event based on its importance to your product and the user persona.

For example, for an Instagram scheduling tool, successfully scheduling a post weighs more importance than A/B testing hashtags to use on the posts. If a user doesn’t schedule a post, they are not successfully engaged, compared to when they are not A/B testing hashtags.

In such a scenario, you might assign 10 points each time a user schedules a post and 1 point for each time a user A/B tests hashtags.

Once you assign a score for each event, track the number of times an event occurs over a specific period of time.

For instance, in the image below, event #3 which is more important (10 points) happened 11 times over x days while event #1 which is less important (4 points) happened 17 times over the same period.

Each event has a weighted score based on importance, and the number of times the event happened

The last part involves calculating the event value for each event. This is how many times the event happened in the last x days multiplied by the event score.

For example, in the image below, every time a customer performs the most important event #3, they get 10 points. In this case, a customer performed that event 11 times in the last x days, hence making the total event value 110.

Multiply the score of one event by the number of events to get the total event value for each event

When an important event hasn’t happened in the specific period of time you are calculating the score for, you can add rules to deduct points. This can lead to a negative score and should trigger a potential churn warning signal to you.

Step 4. Use this formula to calculate your customer engagement score

Adding all the event values together gives you the CES for each active or disengaged user.

There are engagement tools that calculate the score automatically so you don’t have to do it manually. This is the formula they use:

CES = total event value #1 + total event value #2 + total event value #3 +…

Customer engagement metrics

Engagement metrics refer to the data that you can actually measure when tracking engagement.

A recent survey conducted by Userpilot showed that 80% of product managers used product usage as their key metric to measure engagement.

However, there are several other user engagement metrics you can track to measure engagement including:

• Onboarding engagement: the process of continuously educating your users about your product.
• User activation rate: the number of users who reach the activation point in their journey.
• Stickiness: measures the proportion of monthly users that are returning to your app over a 24-hour period.

• NPS: The Net Promoter Score (NPS) measures customer loyalty and satisfaction by asking customers how likely they are to recommend your product to others on a scale of 0-10.
• Product adoption rate: the percentage of your users that engage with all your features.

How to use the customer engagement score and segmentation?

You can segment your user base and free trial accounts based on their scores in order to target them with different messages, relevant to their behavior and product engagement.

First, you should categorize your active users based on their scores:

• a negative score= risk of churn
• a score between 1-40 = very disengaged
• a score between 41-70 = somewhat engaged
• a score between 71-100 = highly engaged
• a score above 100= power users

With the segments you have created above, you can then determine specific actions you should take

• Implement gamification, checklists, and interactive walkthroughs on the low customer engagement scores segment to increase engagement until they get into the 41-70 group.
• Reach out to the 41-70 segment to find out their pain points and help them achieve their goals faster.
• Target users in the 70-100 segment with upgrades and add-ons to increase revenue.

Here are some examples of how you should use the CES based on segmentation:

Nurture users with a low CES

When you measure customer engagement score, you are bound to find users with low scores. These are called disengaged users. They will need your help if their score is to improve and get better.

Reach out to help them achieve value and increase engagement with your SaaS product.

Here are some engagement strategies that can be useful to nurture users and increase engagement:

1. Personalize onboarding with in-app marketing

Users with a low score need a more targeted approach using personalized onboarding with in-app marketing. A checklist will help guide new customers inside your product and build a great customer experience while driving up the product engagement score during a trial for example.

You can include the key actions a new customer needs to take to reach the activation point and experience all the benefits of your product.

2. In-app gamification to increase engagement

You can identify customer segments with a low score and use an in-app gamification engagement model. Implementing gamification adds interactive elements like badges, levels, discount coupons, and leaderboards into the product experience. This can incentivize interactions with your product and drive repeated actions due to our psychological need of reacting to rewards and being driven by competition.

Asana’s milestone unicorn is a great example of how to make in-app achievements feel truly rewarding — not to mention exciting!

3. Gather feedback using micro-surveys and act on them

Implement micro-surveys to collect quantitative and qualitative feedback. You can use CSAT, CES, or NPS surveys, for example, among other types of customer satisfaction surveys. Customer satisfaction surveys help your customer success teams understand how the product helps.

With a tool like Userpilot, alongside measuring customer satisfaction score, you can also include score-based follow-up questions in your surveys to uncover actionable insights into what is causing dissatisfaction.

Look for account expansion opportunities among users with a high customer engagement score

High product engagement is a great opportunity for account expansion. Identify customers that are highly engaged and are receiving continuous value from your product using customer engagement scores.

Then use the following customer expansion strategies to prompt them to spend more in the app:

1. Remove upgrade friction

When users need to upgrade at any stage of their user journey, they should be able to do that smoothly—contextually prompt users to upgrade by explaining the benefits they might be missing out on.

Intercom uses a tooltip for this and adds an upgrade button when a certain functionality of their tools is only available on a different subscription plan. The trick is to show the tooltip in context, while someone is engaging with a specific feature only.

2. Offer premium feature trials

Freemium users might still need to want to upgrade, you just need to give them a good enough reason. They can be engaged but still use your freemium product. Allowing them to trial new premium features that you just launched might be exactly what’s needed for them to decide it’s worth paying for your product.

This is why it’s worth tracking customer engagement scores among freemium users too.

Check out how Asana does it.

3. Use contextual journey touchpoints automation

This helps to ask users to upgrade just when they might need to. For example, Loom, a video messaging app, prompts users to try out a tool that removes filler words from their videos immediately when users finish recording.

Reach out to users when there is a spike or a drop in customer engagement score

Track and review the scores at the account level over time so that when there is a spike, you can act.

Analyzing engagement metrics will help to determine the cause of it.

You can segment and ask for reviews from customers with a good customer engagement score. Highly engaged users are a sign of customer satisfaction and increased customer loyalty. There’s a high chance they will be willing to give your company a positive review.

Using product analytics and segmentation, you can also proactively reach out and offer help to customers with a drop in customer engagement scores. You can segment users with low NPSs, disengaged behaviors, and incomplete onboarding processes and ask them to identify friction and areas for improvement.

Conclusion

Now you know how to calculate and use engagement scores to keep your business on the right path to success.

Ready to start engaging with your customers and driving the engagement scores up? Book a Userpilot demo and start engaging with your customers in-app!

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