4 Rules for Measuring Customer Engagement

. February 22, 2019

Marketers love to use customer engagement as a key metric. These days, nearly everyone sees it as a critical measure of customer value and brand strength.

But while there’s widespread agreement that engagement should be measured (who doesn’t want to know how well customers are receiving your message and interacting with your brand?), agreement about how to best go about it usually ends right there. Ask brand marketers how they measure engagement – or for that matter, how they even define it – and answers will vary greatly.

Sure, using engagement as a strategic marketing pillar makes sense. As with nearly all areas of marketing measurement, however, the approach must be framed in the right context in order to deliver useful insights you can combine with other data to improve outcomes.

First recognize there are two generally accepted engagement types: emotional engagement and behavioral engagement. The emotional variety is more popular among marketers, but behavioral is more important (the accompanying sidebar lists 15 different types of behavioral engagement).

Most marketers will do best by staying focused on evolving the behavioral relationship between customer and company, not just the emotional attachment one has to the other.

Keep in mind that creating and measuring links between marketing activities and customer actions is not a linear, one-time process. The complex relationships between many online and offline channels, and their collective impact on a customer’s purchase decision, are far more difficult to gauge and influence than they once were.

4 Rules of Engagement

Engagement-focused marketers must develop effective methods for tracking how individual customers or segments move down one or more desired paths toward a closer commercial relationship with a product or brand. The goal is to quantifiably justify spending in areas that will influence behaviors that lead to desired outcomes such as more referrals, more prospects or more purchases.

There’s no set formula for an engagement measurement methodology. But there are specific steps marketers can take to develop a more comprehensive view of engagement and a process for capturing the most relevant insights from customer behaviors. Here are four “rules of engagement.”

Rule #1: Develop a Vision

Don’t even attempt to measure engagement until you determine the outcomes you hope to achieve. The objectives you set will influence how you design your campaigns and make important allocation decisions.

For example, are you trying to sell more of product X to customer segment A? Are you trying to retain more customers from segment B? The more granular your initial focus, the less daunting your task will seem.

With objectives defined, map out the different components of the purchase “funnel” (in quotes, because that’s no longer a nice neat path, but a complex mix of engagements) and the non-linear pathways that customers or prospects take to reach a given point where economic value (such as a sale or signup) is created.

How do customers find your website? What steps do they take to download a whitepaper or other collateral? At what point does the sales team begin to interact either directly or indirectly with customers or prospects? What role do channel partners play in all this?

Asking such questions will shed light on how different behaviors influence one another and lead to value-creating engagement activities.

To probe more deeply into these engagement drivers, your next step is to identify the places where you have good data and where you don’t. Look beyond traditional customer survey type data, brand tracking studies and CRM system information. For example, what web analytics are you capturing that might provide insights? Do you have access to point-of-sale data or call center transcripts?

Rule #2: Create a Methodical Testing Process

If there are areas you have little or no data, make experience-based assumptions. Then test those assumptions by constructing experimental designs. Understanding the engagement chain better can provide insights into the value of specific activities.

Armed with this information, you can begin validating previously fuzzy relationships between, for example, word-of-mouth referrals and sales, among others. Focus your tests on one or two areas at a time, replacing assumptions with facts as you go along to plug holes in your approach.

Applying increasingly disciplined, scientific techniques will help you and your team understand the net impact of specific interactions, and thus determine which levers are the most beneficial to pull.

Rule #3: Tap the Predictive Qualities of Upstream Behaviors

As data gaps begin to disappear, you’ll be in a better position to add more rigor to your predictive modeling. This might include such things as multivariate, linear or non-linear regression techniques.

For example, prospects that download whitepapers might give us 80% confidence that they will speak positively to someone else who is considering our brand. And if a customer speaks positively to three people, there’s a 75% likelihood (for example) that one of those people will engage with our brand.

But take care not to blow your measurement credibility by holding up small, isolated pieces of the engagement puzzle and declaring them predictive. Predictive models must encompass all of the drivers of engagement and, importantly, the interrelationships between them.

Trying to draw a straight line between awareness and sales, for example, make marketing (and you) more vulnerable to stakeholders who may question your allocation decisions. Finance, for one, will certainly know that awareness alone doesn’t pay the rent. (Also see Making Your Measurement Story More Compelling on the DAC site.)

Rule #4: Leverage Your Engagement Drivers

After you identify correlations between upstream behaviors and economic value, you can begin to isolate the likely drivers of even more economic behavior and focus you marketing on extending or leveraging those drivers.

For example, if you see that social media references actually make the referrer 60% more likely to repurchase, then you might want to invest more in promoting referrals among your existing customer base. Or if ecommerce activity at your website spikes when certain influencers post news about you, you might want to amp up your influencer marketing efforts.

The goal is not just to find the engagement behaviors that lead to profitable outcomes. You also want to build marketing programs that can stimulate more of those behaviors.

What it all Means

There’s no question that developing a set of useful metrics around a tricky measurement topic such as customer engagement is a challenge for any organization. That’s why it’s best to break down this measurement monster into a series of smaller, less scary components that are more easily tackled.

By nature, engagement is dynamic; change will be constant. So you’ll need ways to test, learn and adapt quickly and use insights to build the foundation for a broader engagement strategy. Guided by a solid vision to start, this type of learning approach might mean the difference between distinguished success and momentum-killing mediocrity for your marketing programs.

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Category: Articles, CMO Briefings, Definitions, Engagement, How-To, Strategy

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