How to Define an Engaged User? Actionable Advice on Improving User Engagement
You’ll struggle to boost user engagement and retention if you don’t clearly define what an engaged user is. And there’s no standard definition because every company is different.
That is why this article will give you guidelines for defining engaged users and strategies for your company and increasing your engagement rates. You’ll also learn how to calculate user engagement for your SaaS.
- An engaged user is someone who actively uses your product to solve their problems.
Enhanced user engagement helps to:
- Increase your base of loyal customers.
- Increase customer retention rate.
- Improve overall profitability.
- How to measure user engagement? Use feature tags, Heatmaps, and NPS.
- User engagement metrics to track: product stickiness, user activation rate, and feature adoption rate.
How to improve user engagement in SaaS:
- Use live demos to showcase your product.
- Guide users with interactive walkthroughs.
- Use an onboarding checklist to engage new customers.
- Offer self-service options.
- Drive feature discovery with contextual tooltips.
- Connect with active and engaged users on a social media app.
- Celebrate customer success.
- Reward loyal customers.
- Userpilot can help you track user engagement, create real-time in-app experiences, and build in-app surveys. Book a demo to see it in action!
What is an engaged user in SaaS?
An engaged user is someone who actively uses your product.
Engagement is a broad term referring to any action that your customers perform—from account logins to activities tied to specific business outcomes. This makes it tricky to quantify user engagement. Thus, a better approach is to define engaged users per user persona and JTBD.
Why engaged users are important?
The key to SaaS success is having a good number of customers that keep renewing their subscriptions. And user engagement is the bedrock of that.
Engaged users help to:
- Increase your base of loyal customers: A loyal user is someone who sticks to your brand no matter what. They also actively spread the word about you. A high level of engagement is essential to creating loyal customers.
- Increase customer retention rate: Satisfied and engaged customers are more likely to continue renewing their subscriptions. They’re also the most likely to upgrade their accounts and enjoy everything your app offers.
- Improve overall profitability: Engaged users on the freemium plan are more likely to become paying customers, increasing your overall profitability.
How do you measure user engagement?
To improve something, you need to measure it first. That’s the only way to:
- Identify improvement areas.
- Know if you’re making progress with your efforts.
We’ll discuss ways to improve customer engagement shortly. But before that, it’s important to know how to measure engagement for your SaaS.
Three ways to do it:
Tag different UI elements to see how users interact with them. (Userpilot helps you do this code-free!)
Most tracking platforms only allow you to measure clicks. But with Userpilot, you can go beyond clicks to identify hovers, form fills, and the like. This enables you to determine where the user is directing their attention and whether they’re engaging properly.
Heatmaps use colors to graphically represent data so you can look at a glance and know what’s happening. You can couple feature tagging with heatmaps to learn about customer behavior toward a specific feature.
NPS is a tool for sentiment analysis that gives you insights into customer engagement levels.
Conduct NPS surveys and pay attention to low-score responses that showcase the reasons that slow down engagement.
User engagement metrics to track
Below are some metrics to track regularly to get the overall picture of your user engagement:
Stickiness is a metric that calculates the tendency of users to return to your product on a regular basis. It’s equal to the ratio of daily active users (DAUs) to monthly active users (MAUs).
For example, if you have 500 daily active users and 1,000 monthly active users, your stickiness rate is 0.5 or 50%.
Guidelines when measuring DAUs and MAUs:
- Focus on unique visits when calculating your daily or monthly active user. In other words, record it as a one-time occurrence if someone visits your app several times a day.
- As discussed earlier, pay more attention to the depth of usage than mere account logins.
- Acknowledge that the value varies for every company. For instance, TurboTax can’t expect the same frequency of visits as Twitter because people don’t need the former every day.
- Building on the previous point, a low product stickiness value doesn’t necessarily mean your product isn’t performing well. It could just be that your tool is a low-frequency usage app. You may have to segment users and conduct an in-depth cohort analysis to get the full picture.
User activation rate
The user activation rate is the number of users that reached your activation milestone divided by the number that signed up. Multiply the result by 100 to get the percentage.
Example: Your user activation rate is 80% if 500 customers sign up for your tool and 400 reach the activation milestone.
A high activation rate indicates your product is engaging and your onboarding flows are easy to follow.
Feature adoption rate
The feature adoption rate tells you how many customers have adopted a specific feature, and you can use it to identify the engagement level of different segments.
It’s calculated by dividing the number of monthly active users for that feature by the total logins in your chosen period. Multiply the ratio by 100.
Example: Imagine the MAUs for your desired feature is 2000 users. And there were a total of 8000 logins in Q1 2023.
Your feature adoption rate for Q1 is:
2000/8000 X 100
How to improve user engagement in SaaS
It’s important to engage users at every stage of their journey. In the strategies below, you’ll learn how to drive engagement for both new and existing customers.
Use live demos to showcase your product
Product demos drive engagement because they showcase your software’s value while establishing credibility. A good demo leaves the user convinced that your software can solve their problems.
You can share pre-recorded demos with prospects, but it’s more effective doing it live. In a live demo, the customer will schedule an appointment and have a subject matter expert from your company jump on a call or webinar to explain how everything works. Another advantage of live demos is that customers can ask questions and get quick answers.
You can also use in-person demos if it works for you.
Guide users with interactive walkthroughs
When users are new, it’s hard for them to engage with your product because they don’t know what feature does what. Leaving them to figure everything out on their own often leads to reduced product engagement and confusion.
So, use interactive walkthroughs to show users around and help them get started.
Here’s an example of what that looks like:
Use an onboarding checklist to engage new customers
At the activation stage, customers are beginning to interact with your tool and experience value. Sustain the momentum by using checklists to showcase product value and keep users engaged.
Your onboarding checklist is a gamification element that motivates users to finish the process. We have an innate drive to finish what we’ve started, and a checklist showing what’s left undone is the kind of push your users need.
Offer self-service options
Self-service portals let users engage with products and explore different use cases, answer arising questions, and much more.
A good self-service option can be a knowledge base with different formats that suit different user personas and their JTBD. Ensure to add as much useful information as possible to your knowledge base. Also, update it regularly as your product grows.
Drive feature discovery with contextual tooltips
Users often create personalized product usage patterns and stick to them.
This, of course, increases their productivity on your app. But it also means they’ll neglect other features that could be important to accomplishing their goals.
If you don’t point users to critical features they’re missing, they’ll never find out. And engagement rates might drop as they aren’t fully maximizing the app.
Use tooltips to showcase features contextually. Example:
Connect with active and engaged users on a social media app
Don’t underestimate the power of social media groups and forums. Wonders happen when you give customers a place to meet and share ideas with fellow users of your product.
Such digital communities will attract new customers and increase engagement among existing users.
Userpilot’s Facebook group is a good example of this:
Celebrate customer success
We all want our efforts to be noticed; the same is true for your users.
Use in-app messages and gamification to trigger celebrations when users complete a milestone. It’s your way of patting customers on the back for a job well done, and the celebration will give them an extra boost to continue engaging.
Reward loyal customers
Imagine this scenario: there are two department stores in the area you just moved to, and you visit both regularly depending on your mood.
You finished shopping in one of the stores on a particular day. Got to checkout as usual, and the person behind the desk tells you everything you bought for the day was free—your reward for being a loyal customer.
How would you feel?
You’ll definitely want to keep visiting because the reward was unexpected. Plus, you’ll be glad they took notice.
Your loyal customers will feel the same way when you reward them for being consistent.
But how can you do this when you have hundreds or thousands of customers?
Simple: segment your highly engaged users. Here’s an example created with Userpilot:
Next, trigger an in-app celebration to keep the engaged user and turn them into brand advocates.
You can also accompany your in-app celebration with discounts or free credits.
Increase the number of engaged users with Userpilot
We’ve hinted at how Userpilot can help increase your engaged user count. This section goes into the details:
Track user engagement
Userpilot allows you to tag features and events to see how users are interacting with your tool. You can also pair this with heat maps to get a clearer picture.
In addition, our platform allows you to track page activity for specific user segments. This is important when you want to know which pages on your app are more useful to customers. The page analytics is equally useful for identifying spikes and drops in page visits—that way, you can address underlying issues before users churn.
Create real-time in-app experiences
Userpilot grants you access to UI patterns like modals, banners, tooltips, slideouts, etc. You can use these to build in-app experiences that will be delivered contextually to boost user engagement.
For example, you could create notification banners for announcements, build tooltips to prompt feature discovery, etc.
Collect customer feedback
Want to collect feedback to know what users think about your app or features? Or maybe you just want to ask why they aren’t engaging?
Userpilot has you covered. From NPS to CSAT and everything in between, our platform lets you create in-app surveys in minutes!
If there’s a SaaS version of the deadly sins, leaving customer engagement to chance will be top on the list.
Your revenue won’t grow until you intentionally engage users and ensure they keep finding value in your tool. Go ahead and implement the strategies discussed in this piece. Remember to regularly track your results and make improvements.
The first step is always to define who an engaged user is for your SaaS. After you’ve done that, Userpilot can help you apply the points mentioned in this article. Book a demo with our team to discuss more.