Strong customer engagement strategies can have a direct impact on business goals tied to activation, monetisation, and retention, but only if brands define and measure the appropriate metrics. Without the right metrics, marketers will struggle to quantify the effectiveness of their engagement against company goals.
The recently published 2021 Global Customer Engagement Review at Braze found that 88% of marketers believe their teams have excellent or good customer engagement practices, but 74% still worry their metrics don’t translate into tangible business outcomes. The problem mostly lies in organizations’ inability to agree on the definition of success.
According to the review, only 26% of marketing leaders say their firms have a shared, company-wide definition of success when it comes to their customer engagement campaigns.
Following these results, I would suggest the use of new metrics for customer engagement around the mentioned three worth levers: activation, monetisation, and retention. Let’s explore each one of them in detail and see how they apply to the real world.
Once brands acquire new customers, the challenge of engaging them awaits. How do they get customers to act? What metrics can inform their action plans? Depending on your business, this can range from basic onboarding actions like building out a profile to recommending content based on that person’s interests. Here is important to follow the customer’s likelihood to make a purchase and session frequency as the two most essential activation metrics.
The likelihood to make a purchase skews more towards retail and e-commerce but also applies to any business that sells a product, such as a newsletter subscription. Session frequency will display how important your brand is in a customer’s life.
Let’s see a real-world example. GetYourGuide, a Berlin-based online travel platform, was hit hard at the start of the pandemic as restrictions on travel were put in place. After experiencing a massive decrease in customer engagement, the company realized a shift toward the new situation is crucial. Therefore, steps were made towards delivering value to a customer base that was stuck at home and unable to travel.
Soon enough, GetYourGuide made sure to communicate with customers and provide the new types of content they needed, including online cooking, yoga, and dance classes. There was also plenty of important travel information for the post-pandemic time. In the end, all of this helped the brand engage with existing subscribers and generate new leads. The business quickly saw a 45% open rate for action-based messages!
Now, once you have an active customer, how do you inspire that person to contribute to the bottom line? There are many ways a brand can encourage customers to make a purchase. Here I recommend using three metrics essential for monetisation: customer lifetime value (e.g. average revenue per user), repeat buyers, and purchases per user.
Our example for this section is Rosetta Stone, the language-learning platform. The company was looking for ways to bolster its engagement amongst existing users. This was achieved through the promotion of a new Live Lessons program, where language coaches offered streaming video lessons on conversation, grammar, and pronunciation. By creating campaigns and sending cross-channel class-reminder messages, the company managed to drive more subscriptions among their highly engaged users, seeing a 25% increase in revenue from this key segment.
Over the past year, one of the biggest customer engagement trends has been the decline in customer brand loyalty. According to “The Future of Retail Report” by Braze, customers acquired during the pandemic have an 82% lower retention rate than those acquired beforehand. This means retention will be the new growth strategy for all businesses this year. If brands want to follow the trend and succeed, they will need to focus on their industry standard for days of retention and average user lifetime.
PureGym, the UK’s largest chain of gyms, has done this very well. The company delivered a targeted campaign encouraging former members to re-join. This resulted in a 69% increase in email open rates, an 89% rise in click-through rates and a 206% higher conversion rate, compared with emails sent to all users. How did they do it? PureGym used a cross-channel campaign that involved sending personalised content to former members, including targeted offers such as 50% off memberships for the first month and a £0 joining fee.
Redesigning your strategies
To conclude, with the right customer engagement metrics in place, brands will be able to create better strategies and campaigns for real business value. If your brand doesn’t have adequate ones in place right now, it’s not too late to redesign the strategies and implement the new practices. No matter when you decide to use them, the right customer engagement metrics will help your company and your customers prepare for the great acceleration as life returns to normal this summer.