measuring customer engagement

According to a recent Gallup study, fully engaged customers represent a 23% premium in terms of share of wallet, profitability, revenue, and relationship growth over the average customer. They will spend more on bigger ticket items and spread the word about your brand. Understanding rates of customer engagement gives you a more global view of your business that will improve the return on your marketing dollars and increase revenue. This helps you position your brand and offer the right products and services.

Today’s most successful retailers, big or small, are engaged with their customers. They always have a marketing plan in place with a range of activities and specific goals. These goals are centered around return on investment and customer engagement. But, measuring customer engagement can be difficult because the data comes from a wide range of sources.

Basic Ways of Measuring Customer Engagement

Defined as the emotional connection between customers and their brands, customer engagement depends entirely upon making that connection and maintaining it. Engagement includes:

  • Participation
  • Revenue
  • Online Reviews
  • Advocacy

Some of these have a deeper connection than the others, which is why they can’t get lumped together when measuring them. If they do, you’ll never be able to align your marketing goals. Some have statistically lower numbers, while others do little to generate immediate revenue.

Because of these disparities, it’s easier to separate your customer engagement metrics into categories. Here’s a look at each category and how to measure it.

1. Participation Rates

Marketing campaigns involving email, text messaging, and social media provide data for participation rates. For email and text, it’s the open and click-through rates. Your social media will have metrics such as reach, likes, and comments. Traffic to your website is a form of online participation. You can also calculate participation rates for events and special sales. Together, these measure your brand’s reach and how the messaging is motivating customers toward a purchase. Higher participation rates improve brand recognition and recall. These will also reveal deeper connections that include important feedback on products and services.

2. Revenue

Sales and promotions are a superficial way to engage with customers. To build an emotional connection, you need to have a long-term outlook. A great way to see if your engagement rates went up is to look at year-over-year sales in each product category. You can also look at holidays and seasonal revenue, too. The overall goal of any marketing campaign is to boost sales, so any increase or decrease in sales becomes your return on investment.

3. Online Reviews

Much like participation, online reviews show how motivated your customers are to talk about you. A marketing best practice is to encourage your customers to leave a review. Bad reviews mean they are less engaged or have become disengaged with your brand. This indicates a need to improve your products and services. That’s why it’s so important to maintain a higher rating, such as 4 stars or better out of 5.

4. Advocacy

Customers that make referrals or social media recommendations are some of the most engaged with your brand. When you get a referral, you have a customer that’s been sent by a brand advocate. You should keep track of how many recommendations you get through social media or a loyalty program. A shared social media post, email, or text is also a form of advocacy.

Connections Will Vary

One thing to always keep in mind, too, is that emotional connections vary between the message and the media. Some of your customers may form deeper connections through social media, while others will appreciate text messages. The key to engagement is to keep your brand in front of them as much as possible with the content and offers they want.

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