Often marketers ignore tracking an individual customer engagement score because their focus is on customer metrics such as overall customer lifetime value or customer satisfaction.
But in truth these other metrics don’t predict what a customer might do next. In many ways they are lagging indicators. (Unless you turn them into a rate that you trend.) A customer may have bought a lot from you last year and be really happy about it. But will they continue to buy?
If instead we focus on a customer’s behavior, we may be better able to gage what they may do next. And importantly, take actions to influence future behavior.
Customer engagement might shed light on opportunity you don’t see easily
To me the biggest outcome of focusing on customer engagement is the realization of opportunity you didn’t know you had.
Often we notice and dwell on opportunities we lost. Churn. Empty carts. Leads lost through unsubscribes. Complaints. We go after squeaky wheels all the time.
Rarely do we notice the loyal customers that engage with us faithfully? How do we recognize someone that might buy from us, or buy more from us, if only we encouraged them a little bit more?
People sometimes shy away from tracking customer engagement because they think it takes a lot of effort to set it up. There isn’t a magic formula for every seller and every customer. It’s something you usually tailor, which can seem overwhelming.
Doing it well is about running an ongoing program.
Doing it is a program.
Certainly, with associated startup investment costs. And ongoing costs of time and tools used. As well, it can be hard to predict the ROI of the program, making it difficult to get buy-in internally. Moreover, outcomes aren’t overnight, its an investment in future revenues and customer stickiness. And you may or may not factor it into revenue attribution.
At the same time the cost of not setting up such a program is in lost future revenues and higher churn. Or worse, the continuation of low revenue analytics.
It’s hard to measure opportunity lost that you weren’t aware of the opportunity. It may not be obvious when looking at wanting to improve growth that setting up a program to measure and act on customer engagement encourages growth. Yet, that is the tangible outcome of the investment.
How do you begin a customer engagement encouragement program?
Probe. Sense. Iterate and innovate.
There are marketing and customer success tools that help with running customer engagement programs. But you don’t’ have to start there if that’s too big an investment to start with. For initial steps, make it a part of your CRM. And then use it in your segmentation of your customers.
You can begin with small efforts. Even if all you do at first is reframe open and click rates in your subscriber list in terms of giving the customer an engagement score. And then take a nurture action if the score is lower than you like.
If you see impacts than you can grow it into a bigger program.
A program becomes a practice.
The magic is that it is that it really is a practice area that you can grow in your business.
Typically, to setup tracking an engagement score people first map out a series of customer touchpoints in the customer journey. They give each individual action a score value that is a measurement weighted by when it happened. (That way you also emphasize recent engagement.)
People track all sorts of touchpoints. List subscription. Website logins. Trials. Purchases. Inquiries. Demos. Engagement with the product. Support cases. As mentioned, it really depends on your business. And what you determine by iteration as being an important engagement indicator. The individual score is than normalized to 100.
The beauty is that with most of these touchpoints, the calculation of its impact into the engagement score can be automated.
Given the score and where the customer is in their lifetime feeds into segmentation. Segmentation that can be used in your marketing automations as well as sales and customer success staff interactions.
You might send a discount coupon to mid-score existing customer. Or have sales and customer success call them ahead of a renewal date to make sure they renew.
Typically, your energy goes into the middle range. Customers fully engaged already receive the benefits of that ongoing engagement. Customers below a range may be pruned in your list hygiene.
Ongoing list hygiene, nurture sequences, surveys, and offers would use the score when building appropriate segments.
It becomes an ongoing tactical practice that you review strategically on a regular basis.
To sum up
Tracking customer engagement gives you visibility into where your customer is now and helps predict what they might do in the future. So that you can encourage and nurture even more engagement.
It can seem overwhelming to undertake the investment if you aren’t doing anything right now. But if you start small and iterate on what is working, it can develop into a ongoing practice that has positive outcomes to your business. And most importantly, positive outcomes for the customer.