How to Measure and Increase Product Engagement in 2021

measure and increase product engagement

How to Measure and Increase Product Engagement in 2021

Product engagement is a key factor when it comes to a successful SaaS business. It is one of the biggest facets of product-led growth.

Without engagement, you’ll find it really hard to retain your active users and upsell them onto more premium price plans.

In this article, we’re going to teach you everything you need to know about product engagement for SaaS businesses.

If you’d like to skip ahead, you can use the table of contents on the left side of the page as well!

By the end, you’ll be an expert, and you’ll be ready to improve and measure product engagement.

TL;DR

  • Product engagement is the degree to which users interact with your product.
  • A product engagement manager is required to measure engagement, and then tweaking the product to improve feature adoption, and subsequently product adoption.
  • Product engagement is crucial to any SaaS product, as it can mean the difference between retention and churn.
  • Measuring product engagement requires you to set up product analytics and identify any problem areas, before coming up with testable hypotheses.
  • There are many techniques to improve customer engagement and product adoption, including guiding users to the Aha! moment, using in-app marketing and improving your UX writing.
  • Userpilot is the best all-in-one tool to increase and measure product engagement.

What is product engagement?

Essentially, product engagement is precisely what it sounds like: It’s how much engagement your product gets from its active users.

In simpler terms, it’s a measure of how your users interact with your product at the most basic level.

So, measuring user engagement means deciphering the patterns in your product analytics, monitoring your user engagement metric, and seeing what your users are doing. It also means monitoring and observing your active users so you understand how they interact with your product.

As for managing it, that involves taking the learnings from your measurement and then improving upon them. It means that you tweak the product in such a way that your users engage with your product even more and on a deeper level.

So, in a nutshell…

Product engagement is the degree to which users interact with your product. The more user engagement the better, as you’ll soon find out.

Product engagement is an important aspect of building a successful SaaS business. So much so that there’s even a dedicated job role for it. Enter the product engagement manager…

What does a product engagement manager do?

It’s a job role you might not have heard much about, but it’s a crucial position.

A lot of SaaS companies might actually have a product engagement manager without naming them as such. Often product managers in customer success teams will end up taking on the role as part of their responsibilities.

So, what exactly is a product engagement manager?

Well, in the simplest possible terms, it’s somebody that manages product engagement. They’re the ones who measure current levels of product engagement. They’re the ones who then put processes in place to improve it.

Product engagement managers have a pretty big responsibility. They’re essentially in charge of encouraging more users to engage with your product and to do so at a deeper level.

This requires a lot of different skills. You need to be analytical, and comfortable with stats because you’ll need to constantly monitor your product engagement score. You need to be empathetic, and able to put yourself in your users’ shoes. You need to be a creative problem solver and have a thorough understanding of user psychology.

A day in the life of a product engagement manager

A typical day in the life of a product engagement manager might look a little like this:

You’ll start off analyzing the results from your latest A/B test to see how many users engaged with your core product. You find that changing the wording of an empty state provides more value and increases feature adoption by 10%.

Here’s what the analysis process looks like in a feature adoption funnel.

feature adoption funnel

feature adoption funnel

You then write up the results of that test and propose to the product teams that you go ahead with that particular copy.

You then have some user testing interviews lined up. You watch as multiple users interact with certain features your team has built. They all seem to struggle at the same point, especially new users.

You spend the afternoon brainstorming ideas on how to improve engagement with this new feature. You have a couple of different ideas, and so decide the best option is to test them out over the next few weeks.

As you can see, a product engagement manager has to juggle a lot of different tasks and challenges. That’s because product engagement is one of the most important things a SaaS company can invest in.

Let’s take a look at what makes it so important…

Why is product engagement essential for business?

At this point, you might be wondering why we’re droning on about product engagement so much.

Well, it’s because it’s one of the most important things you can invest in when it comes to improving your product and increasing product usage.

That’s not an exaggeration.

If you look at the top SaaS companies out there, the likes of Slack and HubSpot, they all had (and have) massive product engagement.

They made continuous tweaks and improvements, each one making active users interact even more with their product.

As we’re sure you know all too well, users expect the products they use to constantly adapt to their needs. Those needs are always changing, and your product needs to keep up.

But the trouble with an ever-changing product is that users are always having to learn how to use it. Those new features are useless if users don’t know they exist or are unable to figure them out.

And ultimately, if your users don’t figure those key features out, they won’t get any value from them. That’s a surefire way of losing customers.

That’s where product engagement proves itself so useful. A product engagement manager can see where a product is falling short, and learn why the product engagement score is low.

They can then put a process in place to improve the product, and therefore improve the product engagement score.

It truly is the difference between user retention and customer churn. If that’s not important, then what is?

Now let’s move on to the part you’ve been waiting for. Here’s how you can start measuring product engagement for your own product…

How to measure product engagement

For this section, we’re going to assume you haven’t set up any product analytics at all.

If you have, then feel free to skip ahead to the next bit where we cover the more advanced aspects of measuring product engagement.

Step 1: Set up product analytics

product engagement user funnel analytics

Much like any good marketer will use analytics to measure the impact of their campaigns, any good product manager or product team will use analytics to understand their active users.

The first thing you need to do is choose your tool. While Google Analytics has the monopoly when it comes to measuring engagement score and customer success, product analytics has a few contenders.

The main product analytics products that we love are Heap and Mixpanel.

Here’s what it looks like to measure product analytics with Heap.

measuring product analytics with heap

measuring product analytics with heap

Both Heap and Mixpanel offer largely the same functionality. They enable you to track an active user across your entire SaaS business model and create segments based on their engagement activities. You can also use Userpilot to track user engagement.

user engagement tracking with userpilot

user engagement tracking with userpilot

This means you can either dig down into individual users or bracket them together into key user segments, like daily active users, weekly active users, and monthly active users. Chances are you’ll want to do both.

In our experience, while the functionality is largely the same, Heap is easier to implement. The tracking is set up mostly automatically, compared to the code-heavy installation needed for Mixpanel.

Either way, your first step is to integrate a product analytics tool.

Step 2: Identify problem areas

The great thing about analytics is that you can immediately start to see where active users are struggling to engage with your product.

If you’re looking at user flows and you find that nearly every user stops using your product at stage 2 of your onboarding, then you have a problem there.

If you launched a new feature but only 5% of your user base are actually using it, then you have a problem there.

Before you work to improve product engagement, you need to know what needs improving, right?

That’s why analytics are so important.

You need to identify any patterns in your data. Look for areas of high drop-offs, or completely underused features. Essentially, any major anomalies in your data are cause for concern.

Step 3: Create your hypotheses

The key to measuring user engagement is to focus your customer success effort. Simply looking at your analytics with no end goal in mind won’t help you.

Those anomalies that you spotted when you delved into your analytics are where you should focus your efforts.

You now need to think like a scientist. When a scientist conducts an experiment, they first come up with a hypothesis. This is a short statement that explains what they expect to find.

For the purposes of product engagement, this will generally be along the lines of:

“Doing X will improve engagement of Feature Y.”

X is an action that you’re going to take. This could be changing the copy, adding some tooltips, even altering the design of the product completely.

Y is the feature that people aren’t using. This is the anomaly you identified.

It’s important to create a hypothesis because you now know exactly what you’re measuring. You can measure your product engagement score before the change, and then again after the change. You then know what impact that change had.

Step 4: Measure the results

Once you’ve measured your baseline user engagement metric, it’s time to make the improvement.

Then it’s a matter of waiting. The length of time depends on the nature of the changes. For major changes like a complete UI overhaul, you can probably expect results fairly quickly. For more subtle changes, like microcopy, you might have to wait several weeks to get enough data.

Once you feel you’ve got enough data to make a decision, you can measure your product engagement score again.

Then all you need to do is compare the user engagement before the change with the user engagement after it.

If your engagement score improves, then great! You’ve done your job!

If it doesn’t, then you have to go back to the drawing board. A product engagement manager’s job is never over!

Of course, measuring your product engagement score is only one part of the job. You also have to put improvements in place.

Let’s take a look at what those improvements might look like…

How to increase product engagement for your SaaS product

There are several techniques you can use to increase engagement. Choosing the right one is largely dependent on your product, your user base, and why engagement is low.

Having said that, the following 3 techniques will generally help increase product engagement no matter what…

Product engagement tip #1 — Get users to the Aha! moment as soon as possible

“Don’t bury the lede!” is a common piece of advice given to budding journalists. It basically means, “Don’t hide the best information further down the article. Hit readers with it right away!”

The same can be said for your product’s Aha! Moment. If you wait too long to provide that key moment to your users, they might not stick around long enough to upgrade to paid accounts and become power users.

Here’s what the onboarding process should look like.

user onboarding process

user onboarding process

 

When a user first signs up to your product, they need to reach the initial Aha! moment as soon as possible. When your users experience the immediate value of your product, you can increase engagement.

The best way to help them get there is to guide them to it step-by-step. This is what your initial onboarding flow should do to keep the user engaged with your product.

Assuming you know what your product’s Aha! moment is, you need to figure out the quickest way to get there.

Break the current user journey down into steps in your onboarding process. Then have a think about each step, and whether it’s needed.

For example, you might have users enter their credit card details before they’ve experienced the Aha! Moment. Is there really any reason for that? Does that help them get value from your product? Probably not.

(In fact, chances are that’s seriously harming your overall engagement!)

Any steps that add unnecessary friction before the Aha! moment should be taken out to streamline your engagement model.

EDITOR’S NOTE: We’ve written a guide that covers everything you need to know about the Aha! Moment. Take a look here.

When you make it easier for your users to reach the Aha! Moment, more of them will stick around long-term and become power users.

An example…

product engagement example adroll

AdRoll enables you to create, launch, and measure your ad campaigns. The Aha! moment is clearly when you create your first ad campaign and realize how easy it is.

Rather than letting you figure that out yourself, AdRoll immediately prompts you with a guide. The guide then walks you through your first ad campaign step by step.

By the end, you have your first campaign ready to launch. More importantly, you’ve experienced AdRoll’s Aha! moment, and you’re hooked.

Product engagement tip #2 — Market new features from within your product

Sometimes the problem isn’t actually with your product, it’s with your marketing.

While most product engagement managers won’t have control over marketing campaigns, they can control what happens inside their product.

Fortunately, there are a lot of in-app marketing techniques you can use to create essential visibility and for driving engagement.

One of these is a changelog. This is essentially a list of changes you make to your product. That can include new features, key features, other existing features, minor updates, and even bug fixes.

You can then provide notification whenever you release an update or even display your changelog automatically. Your users will then see the update about your new feature and can go and check it out for themselves, which will increase feature adoption and product usage.

Another technique is to present users with a pop-up modal when they log in for the first time after you’ve released a new feature.

The modal can sell the benefits of your new feature and include a CTA that directs users to try it out. Here’s how Asana uses pop-up modals to announce new features in-app.

asana popup modal for new feature

asana popup modal for a new feature

Do use these modals sparingly, however, as they’re often seen as intrusive and aggressive by your users.

To beat this obstacle, Asana uses another subtler, but very effective, way to highlight new product features and improvements in-app. Here’s an example:

Another example of a company that doesn’t use big modals to market new features in-app is Slack. In this case, Slack uses clear messaging that accompanies the UI elements to let users know about the new feature. This messaging explains what the feature does.

slack announcing a new feature

slack announcing a new feature

The beauty of in-app marketing is that your marketing is happening where your users actually go. Your users might not read that email announcement or the behind-the-scenes blog post. But they will log in to your product.

EDITOR’S NOTE: Want to learn more about in-app marketing techniques? Then check out our guide here.

Used correctly, in-app marketing can boost your feature adoption and product engagement.

An example…

product engagement example mailchimp

This modal from Mailchimp perfectly introduces a new improvement to the product. It explains what the improvement is, and how it benefits you.

It also includes a CTA so you can go and see the improvements for yourself.

Product engagement tip #3 — Improve your UX writing

Many software businesses focus on building a product that looks beautiful. This focus on UI often results in them overlooking an equally important component: UX writing.

UX writing refers to any copy inside your product. It’s the words that your users see when they interact with your product.

The copy inside your product can make or break your engagement.

If your copy is confusing and unclear, then your users might not know what to do, and instead of becoming engaged users, they might end up frustrated with your product.

If your copy is full of errors and typos, then your users might no longer trust your product.

If your copy sounds like it was written by a robot, then your users might switch off and customer engagement will fall.

On the flip side, good UX writing will grab the attention of new users, give them a better understanding of your product, answer any queries they have, and drive product engagement.

The best advice we can give you when it comes to improving your UX writing is to actually hire a writer to do it. Writing is a skill of its own and isn’t something that anyone can do.

If you are going to write it yourself, then create a tone of voice for your product, write copy that matches that voice, make sure it has no mistakes, and ensure that it’s clear and easy to understand.

EDITOR’S NOTE: We covered some of the best practices for UX writing in our blog post here.

Do all of that, and you’re well on your way to having an engaging product.

Conclusion

Increasing product engagement is the core prerequisite for increased product adoption. As a SaaS business, the number of features your product has does not matter if your users don’t engage with those features. Measuring and monitoring product engagement provides you with insights to continue releasing and improving on product features that satisfy your customers.

Implementing the three tips we elaborated on above will help you increase customer engagement, helping your users to get continuous value from your product.

Userpilot is designed to help you improve product engagement and the number of engaged users by providing the best possible onboarding experience for your users.

Why not get started today and book a free demo?

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Joe is a UX and content writer, with several years of experience working with SaaS startups. He's been working with SaaS startups that are focused towards product management and customer success for the past couple of years.