Scroll through the apps on your phone and you’ll see the ones you use every day – and the apps you downloaded months ago and have only opened a couple of times.
What’s the difference between them? Customer engagement.
With so much competition for customers’ attention, it’s more important than ever for businesses to understand customer engagement and how to optimize their products and services to improve engagement.
A customer engagement score gives you a measure of how well you’re engaging your target audience and which customers are most at risk of churn – as well as those most ripe for upselling.
Here’s how to calculate a customer engagement score for your business, including the customer engagement score formula, key customer engagement metrics, and more.
- What is a customer engagement score?
- Why is measuring customer engagement important?
- Understanding customer engagement metrics
- Customer engagement score formula
- Use your customer engagement score for business growth
A customer engagement score (CES) is a metric that’s used to measure how engaged your customers are. Customer engagement scores are typically calculated on a scale of 1 to 100 for every individual customer. The higher the number, the more engaged and happy your customer is.
By calculating your customer engagement score, you can look at just one data point instead of several – it gives you an immediate measurement of an individual customer’s engagement with your company and how your strategies like customer success and content marketing are impacting customer engagement.
Understanding customer engagement is essential to help you track the health of your customers – and your overall business.
It costs 5 to 10 times more to acquire new customers than retaining a current customer – and current customers spend an average of 67% more than new ones. That means investing time into monitoring the health of your customers is a smart move for your bottom line.
Here are a few more stats to keep in mind:
- Repeat customers spend an average of 33% more on every order than new customers.
- Businesses with highly engaged customers beat their competitors by 147%.
- For B2B companies, improved customer engagement led to a 63% drop in customer churn
A customer engagement score lets you identify specific opportunities and risks in your business. For example, customers with a low engagement score are at higher risk of churn – so they’re the people you need to target to increase engagement and help you retain more valuable customers.
On the flip side, a high engagement score indicates the customers who are most likely to be open to potential upselling or reselling opportunities. Happy and healthy customers could be persuaded to upgrade to a higher subscription tier, purchase a new or related product, and refer your services to a friend for example.
Measuring customer engagement lets you track how your customers interact with your products and services – and areas where you need to be doing more to attract and retain them.
Related: 7 SaaS Customer Retention Strategies
Simply put, the success of your business depends on the happiness of your customers. If people don’t want to use your products, your business isn’t going to last long.
Customer engagement is a key indicator of the health of your customers. Engaged customers are more likely to spend more, stick with your brand, and refer you to their network, meaning more profits for you in the long-run.
There’s no one-size-fits-all approach to calculating your customer engagement score. Customer engagement looks different to different businesses, depending on the type, frequency, and form of your customer interactions.
For example, if you have an app that customers interact with daily – like a social media management tool – your customer engagement is going to look very different to a platform that customers use monthly or quarterly – like invoicing software, for example.
So how do you calculate your customer engagement score? First you need to pick your customer engagement metrics.
Your customer engagement score will take a range of customer engagement metrics into consideration. Here are some of the most common metrics for calculating customer engagement.
- Conversion rate: The percentage of people who complete an action that hits your conversion goals such as downloading a template or registering for a free product trial. Divide the total number of conversions by the total number of visitors and multiply the figure by 100 to get your conversion rate.
- Pages per visit: How many pages of your website a user clicks through in one visit – also known as pages per session. A high page-per-session rate means higher customer engagement.
- Time spent: The amount of time a user spends on a page of your website, your product or your app in one visit – also called the average session duration. Long session times indicate higher customer engagement and can give you clues on what your audience is interested in learning about.
- Bounce rate: The number of users who leave your site or product immediately without engaging with any content. The lower the bounce rate, the better for your business.
- Clickstream data: The full path users go through when navigating through your chosen channel – including every click and interaction – like what pages they spend most time on, what items they add or remove from their cart, their preferred method of payment and more.
- Stickiness: The proportion of monthly users who return to your app over a 24-hour period, calculated by dividing the number of daily active users by the number of monthly active users.
- Social media engagement: Likes, comments and shares on social media are all good indicators of customer engagement. Tracking the responses to your posts on social media can tell you a lot about your customers and what they’re interested in.
The metrics you choose to calculate your customer engagement score will depend on your business model, your products or services, and your goals. Identify the metrics that are most relevant to your business.
For example, if you’re interested in tracking customer engagement with your app, you might opt to track daily and weekly active users as part of your customer engagement score.
Once you’ve decided on the metrics for your customer engagement score – use this formula.
|Customer engagement score = Total Event Value #1 + Total Event Value #2 + Total Event Value #3 + Total Event Value #4…|
Here are 5 steps to put this customer engagement score formula into action.
Identify your key engagement metrics
Your customer engagement score is individual to your business. There are no hard and fast rules for which engagement metrics to use, which means that you choose the customer engagement metrics that matter most to your business.
Define what engagement looks like for your product or service – and what key events or activities are most important to customer success.
Assign weights to each event
When you’ve decided on the metrics you’ll use to measure customer engagement and the events that are key indicators of user engagement, go through the list and assign weights to each of those events.
Events with more significance – like upgrading from a free trial to a paid subscription – should carry more weight than low impact events such as opening a marketing email or sharing a post on social media.
Assign weights based on the importance of each event to your product and your ideal customer. Again, the weighting will be unique to your business and the types of engagement you’re tracking.
Find the Total Event Values
Now you have your key events and their weight or score, it’s time to track those events within a set period of time.
Use event tracking tools to get detailed analytics on user engagement and see how often an individual user engages in specific events – like linking their social media accounts within your platform or adding other users and admins.
To calculate the weighted average, times the number of times a user engages in a specific action by the score you gave to that event.
Here’s the formula:
Total Event Value = Event weight x Number of events
Let’s take a look at an example:
Say your key event #1 is linking your product to a social media account.
You give this event a weighted score of 10.
And this event takes place 4 times over a set time period – e.g. 30 days.
Your Total Event Value will be: 10 x 4 = 40
Repeat this process for every event.
Calculate your customer engagement score
Armed with your total event values, you can now calculate your customer engagement score.
Many customer engagement tools will calculate a customer engagement score automatically so you don’t need to worry about doing the math yourself.
This is the customer engagement score formula they’ll use:
|Customer engagement score = |
Total Event Value #1 + Total Event Value #2 + Total Event Value #3 + Total Event Value #4…
Evaluate the results
The customer engagement score formula will give you a numerical result. Use this score to gauge the health of your customers.
Here’s a rough idea of how to evaluate your customer engagement score:
- Negative CES – high risk of customer churn
- CES between 1-40 – very disengaged customers
- CES between 41-70 – somewhat engaged customers
- CES between 71-100 – very engaged customers
- CES above 100 – highly engaged users
A good customer engagement score is 71 and above.
Anything below 70 is an indication of poor customer engagement. These are the customers who are most at risk of churn and who need more attention.
Use your customer engagement scores to segment your customers and inform your customer success strategy. For example, if you have a subscription-based product, you could try the following:
- Engage with 40-70 group 1-3 months before their subscription renewal – like a call or one-to-one meeting – to give them more attention, identify any areas of concern, and potential for improvement that would help them get more from your product.
- Target customers in the 1-70 group with a dedicated email marketing campaign, targeted messaging, and feedback surveys to combat churn.
- Dedicate the least time to the 71-100 customer group as they’re the healthiest and have the highest chance of renewing their subscription – these are the customers you can target with re-conversion campaigns.
Still not clear on how the customer engagement score formula works? Here’s a basic example of the formula in action.
Imagine you’re a SaaS business offering a free trial of your software product and you want to measure the engagement of your customers during the free trial period.
You decide to use 4 key events to calculate your customer engagement score:
- Log in
- Team member added
- Project added
- Upgrade to paid subscription
For each of these events, you assign a weight. Here’s an example.
|Event||Weight||Number of activities||Event score|
|Team member added||10||4||40|
|Upgrade to paid subscript||50||1||50|
Choose an engagement period – like 30 days – and track the number of events through that period, using the weight of each engagement activity to assign a customer engagement score.
In this example, adding team members has more weight than simply logging in to the product. Upgrading to a paid subscription has the highest score.
Customer Engagement Score = (Log in + Team member added + Project added + Upgrade)
This customer engagement score can be combined with other scores to get a more in-depth picture of customer engagement and satisfaction during a free trial.
For example, the company might also choose to measure feature adoption, interaction with support, customer feedback and reviews, and more.
Calculating your customer engagement score for different users is an essential tool to help you measure and understand customer interactions with your products and services. By using a combination of different metrics – like conversion rate, stickiness, and social media engagement – you can get a clearer picture of the overall customer experience with your brand and opportunities for improvement.
A customer engagement score isn’t just a number – it’s a guide to building stronger, longer-lasting relationships with customers to drive business growth.
Thinkific Plus is built to deliver learning experiences that keep customers engaged.
Our solutions team specializes in crafting bespoke strategies, harnessing Thinkific Plus to elevate your training programs, foster engagement, and streamline operations.
Build a plan that is tailored to your unique needs and experience the advantage of custom pricing—flexible solutions that align with your budget and scale with your growth. Start unlocking the potential of online learning at scale—request a call with our solutions team today.