Customer Engagement Is Measurable

In a recent post, Avinash claims that engagement is not a metric, and writes:

Engagement is not a metric that anyone understands and even when used it rarely drives the action/improvement on the website….It is nearly impossible to define engagement in a standard way that can be applied across the board.”

My take: I think Avinash is taking an uncharacteristically narrow view of the term engagement, and the ability to measure it.

The biggest issue with the way the term engagement is used in the marketing community is its narrow connection to websites and the online channel. When marketers think of “customer engagement”, they should be thinking about how engaged the customer is with the company, product, or brand. The level of involvement with the website — or with a particular ad (online or offline) — is just one dimension of a customer’s engagement.

Customer engagement encompasses a number of dimensions:

  1. Product involvement. A customer who doesn’t care about the product, is likely to be less committed or emotionally attached to the firm providing the product.
  2. Frequency of purchase. A customer who purchases more frequently may be more engaged than other customers.
  3. Frequency of service interactions. Branding experts like to say that repeated, positive interactions lead to brand affinity. And they’re right to a certain extent, but….
  4. Types of interactions. …not all types of interactions are created equally. Checking account balances is a very different type of interaction than a request to help choose between product or service options.
  5. Online behavior. Time spent on a site might be very important. But, like types of interactions, not all web pages are created equally.
  6. Referral behavior/intention. Customer who are likely to refer a firm to friends/family might be more engaged — a customer who actually does refer the firm, even more engaged.
  7. Velocity. The rate of change in the indicators listed above may be a signal of engagement.

Avinash is on the right track, however when he says that it is nearly impossible to define engagement in a standard way. I would suggest, though, that a standard definition is feasible — but that measuring it in a universally standard way is what’s impossible.

And that’s good.

Who said we need a standard way of measuring engagement? This insistence on a standard definition and approach is to measurement is silly. You don’t hear anyone getting all worked up about the fact that market share can be calculated any number of ways, and that the denominator in that metric is hardly consistent or easily measured.

Measuring engagement needs to be done in the context of a firm’s strategy and it’s own theory of the customer — that is, what behaviors the firm believes constitutes an engaged customer.

Measured correctly, engagement meets one of Avinash’s golden rules — to me instantly useful. Using market research data, I measured customer engagement with their banks using the attributes described above.

I then segmented the respondents into four categories, based on their level of engagement, and the breadth of their relationship with their banks (based on the number of products owned). The result: A metric that is immediately useful in helping marketers address some strategic questions about their marketing and customer strategy.

engagement2.jpg

Marketers need to stop getting their knickers in a knot trying to boil engagement down to a single metric that relates to a web site or the online channel. It’s a descriptor of a customer’s attitudes, not a channel’s performance.

A metric, when used appropriately, can help execs make decisions and manage. But considering the way engagement is being defined and measured today, it’s no wonder Avinash has come to the conclusions that he has.

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