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Aug 11, 2017

What You Need to Know about Measuring Customer Engagement

Categories:
Reporting & Analytics

measuring tape showing how to measure customer engagement

[Estimated read time: 6 minutes]

Measuring customer engagement should not be limited to "traditional" marketing metrics. Measurement should include customer service metrics such as accessibility, quality, and voice of the customer (VOC).

When marketers think about measuring customer engagement, they often think about email open rates, social media interactions, site traffic, and purchases. While all of these are indicators of how engaged your customer base is with your brand, marketers often overlook service metrics, failing to recognize their impact. So, with this in mind, how do you measure engagement?

Understanding customer engagement metrics

Having a complete, holistic view of customer engagement is extremely important; in fact, a Gallup study found that fully engaged customers represent a premium of 23% when it comes to share of wallet, revenue, profitability, and relationship growth when compared to average customers. On the other hand, actively disengaged customers represent a 13% discount in the same metrics. In addition, PeopleMetrics found that companies focusing on customer engagement have revenue 13% higher than average. Contrast that with the 36% revenue penalty for those companies with poor customer engagement.

So, what is customer engagement? Here's one definition: The willingness of customers to spend their time on the company for mutual benefit, often through brand advocacy or other involvement. Companies reviewing their engagement analytics might consider looking at customer referrals, advocacy on social media, reviews, and/or participation on customer advisory boards.

Service metrics that affect customer engagement

In addition to measuring customer activities (such as social interactions and site visits) and advocacy (such as referrals), it would behoove brands to incorporate some key service metrics into their customer engagement analytics. These could include measurements of service accessibility and quality, as well as voice of the customer (VOC) and staff engagement metrics. More details about each can be found below.

Service accessibility metrics

Non-contact rate: The percentage of customers who encountered big problems but either 1) did not bother to contact you or 2) tried, and eventually gave up. This data could be obtained in an annual survey of customers. A high non-contact rate could signify that it is difficult for customers to contact you, so you may consider adding more communication channels or making contact information easier to find. It could also mean that your service is not perceived as effective or helpful, so customers don't even try.

Percent of wait times that are "unreasonably" long: Customers have high expectations for the speed of responses. Here are some benchmarks for how quickly customers expect to be served using various interaction types:

  • Phone calls: 2 minutes
  • Emails: 4 hours
  • Standing in line: 4 minutes
  • Social media: 1 hour
  • Live chat: 30 seconds

If a large percentage of your wait times exceed these benchmarks, you may need to evaluate your service scalability. For instance, if your current human staff can't handle the volume of incoming web chat questions, you might consider implementing chatbots to bear some of the burden.

Percent abandoning contact attempt: This includes all interactions that customers might abandon, such as social media conversations, phone calls, live chat, and email. Similar to high non-contact rates, a high contact abandonment rate could mean your current service organization is not equipped to deliver quick, effective service. 

Why do these metrics matter for customer engagement? Long wait times and ineffective service cause customers a great deal of frustration, which often leads them to defect to competitors. Considering that customers now regard service as more important than the product, a poor service experience leads to a ripple effect of frustration, attrition, and negative word of mouth. 

Service quality and VOC metrics

Number of customer complaints: Nobody likes hearing bad news, but when it comes to customer satisfaction, ignorance is definitely not bliss. It's important for brands to proactively solicit feedback from customers instead of waiting for customers to take the initiative. In fact, 96% of unhappy customers won't tell you how they feel, and 91% of that group will leave and never return. These "silent sufferers" seem to defect to your competition for no reason at all -- which is why it's so crucial to seek out feedback.

Satisfaction surveys: These measures of customer satisfaction should be performed consistently throughout the year with a simple one or two question survey, such as a basic rating scale and an open-ended text field where customers can explain why they gave that rating. It's also recommended to perform a more in-depth satisfaction study on an annual basis to understand the end-to-end customer experience. 

Operational data: Information about missed deliveries, returns, service charges, and other operational metrics are often the most reliable of service measurements. Alarmingly high rates of any of these operational metrics should be addressed as a top priority, as they represent some of the highest-stakes moments along the customer journey.

Employee input: Your front-line people have some of the best insight into issues because they talk to customers every day. It would be wise to implement a weekly or monthly meeting to talk through the most pressing issues that contact center employees and store employees are seeing.

Social listening: Although social media conversations might reflect a smaller segment of your customer population, it's a very vocal segment! Influencers and power users can be valuable sources of VOC insights within social channels, providing guidance for strategic planning.

Why do these metrics matter for customer engagement? These measurements provide both leading and lagging indicators of how engaged and loyal your customers are likely to be. They also highlight urgent issues and areas of improvement, allowing you to properly prioritize the actions you'll take to improve the customer experience.

Staff empowerment and connection metrics

It's widely accepted that more engaged and empowered employees provide better service. And the concept of staff empowerment is a crucial one when dealing with customers. Every customer is different; they have different needs, different reactions, and often require agents to think on their feet. Empowered agents feel they can do what it takes to serve their customers well, without fear of penalties from above. 

Customer feedback about staff: Asking customers simple questions such as, "Did the agent care about your issue?" or "What one word would you use to describe us?" can be incredibly informative, soliciting both positive and negative feedback about how agents are performing. However, many companies that have implemented a system of consistently gathering customer input have found the feedback to be more positive than negative.

Number of (and reasons for) escalations: How often are customers choosing to escalate from self-service to a live agent? If it's happening too often, you may need to evaluate the efficacy of your self-service options. The better measure of agent empowerment, however, is how often front-line staff are escalating issues to their managers. If too many of these kind of escalations are taking place, it could be a sign that agents do not feel trusted or empowered enough to solve real customer problems. If too few, agents could be taking too many liberties, even convincing customers to give up on trying to find a solution.

Why do these metrics matter for customer engagement? Low employee engagement will cause customer engagement to suffer. Unhappy service staff can't provide a happy service experience! The fact is, front-line staff are responsible for maintaining a consistent brand experience. With every interaction, they are either helping or hurting customers' perceptions of your brand. For more on the effects of service interactions on brand loyalty, read our article Customer Engagement Marketing: 3 Principles to Live By.

Don't make the mistake of thinking "traditional" customer engagement analytics are the only numbers that matter. Monitoring and improving each of the service metrics above will result in better customer engagement, improved long-term loyalty, and higher revenue for your brand. Learn how customer engagement software can help you measure your performance in the areas presented here and increase your chances of CX success.

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Source: John A. Goodman, Customer Experience 3.0

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