Four steps for creating a User Engagement Score for your Product
User Engagement is an essential metric for any and all modern software businesses. Maybe the most important metric — in many ways. There is probably no greater predictor of future success of a software product than how engaged its users are. This is because engaged users stay longer, grow their accounts, try all your awesome new features, drive referrals, and have the highest lifetime value — everything important to a software business today.
But the reality is — most software businesses have no idea how engaged their user base is — now or over time. Certainly not from a quantitative perspective. They don’t know how engaged users are at a global level (meaning an overall engagement level for the product measured over time) and certainly not down at the user-level (where it can be most insightful and actionable).
Even though it’s super important.
In this post, we will layout a framework for creating a essential user engagement score for your users.
*Full disclosure — we built our product, Sherlock, to enable product teams to build, track and analyze this engagement score quickly and easily. You can check it out here.
Active vs Engaged Users
A quick note about active vs engaged users. In his e-book, 19 Tips for Driving User Engagement, SaaS thought-leader Lincoln Murphy lays our the importance of understanding the distinction between an Active user and an Engaged user. In it he says:
“Very often, I see people using the terms ‘active’ and ‘engaged’ interchangeably when talking about user engagement. I think this is a mistake. These terms are related…but do not mean the same thing. You want “engaged” users…not just active users.
A common definition for engagement for many SaaS apps is: number of logins. Seriously. This is a lot more common than I wish it were (I see it ALL THE TIME), but this is how a lot of SaaS providers measure ‘engagement.’”
Which leads us to the first step in creating an Engagement Score for your product —going beyond just logins.
STEP 1: Define Engagement for your Product
This first step for creating an engagement score is a strategic step. In this step you need to think about what engagement means for your specific product.
We don’t believe in a formulaic approach to engagement scoring. This is because every product is unique. Every product has it’s own nuances which define successful engagement. So…it’s important to define — specifically — what it means to be “engaged” with your product.
For example, a B2B SaaS application could define “engagement” as a certain number of documents uploaded; tasks completed; reports generated; team members added; emails opened; deals closed; time saved; etc.
A Social Networking application could define “engagement” as a certain number of connections made; number of posts/week; number of comments; etc.
A B2C Marketplace could define “engagement” as a certain number of products uploaded; number of purchases made; number of recommendations in last 30 days; etc.
The point is — no matter what Hollywood tells you, when it comes to defining engagement for your product — your product IS a unique and special snowflake.
But how do I even get started honing in on this definition of engagement?
Good question. The first step is always the hardest, but don’t be dismayed. You’ll get there!
If you are part of the product team, you probably already have a really good sense for what “engagement” means. In fact, you’ve probably already given it a good deal of thought.
But even if you have, we recommend starting with a quick survey of your team. Ask everyone a very simple question:
“What is an engaged customer of [our product]?”
They should answer with something like, “An engaged user of [our product] does X, Y, Z.”
You will receive some very interesting answers. Undoubtedly, some will be very qualitative while others will be more quantitative. None will be “right” (there is no “right”), but these responses from your team will give you a great starting point for defining engagement and maybe help you think about things you haven’t already.
At this point, you should formalize this input from the team into a list of ‘engagement’ activities that a user can take in your product (or even outside of your product). It could look something like this:
ENGAGEMENT ACTIVITIES
- Logged in
- Added photo
- Shared photo
- Invited friend
- Commented on photo
- Edited photo
- Posted to Facebook
- Posted to Twitter
- Opened email
- Clicked on email
- Etc.
Once you have this list created (and don’t worry — things can change — you will be iterating and refining this over time and as your product evolves)…you can move on to Step 2, which is a more technical, but necessary step.
STEP 2: Start tracking these product activities (ie — events)
Once you have a good sense for what kind of user behavior and activity ‘define’ engagement for your product, you need to start tracking that activity. Technically, each specific activity is called an ‘event’.
So when a user starts a new project or makes a comment or uploads a photo — these are all specific user ‘events’. They need to be “tagged” in your product so that you can track whenever any user takes any of those actions.
Most of this should be pretty straight forward for your dev team. There are many ways to track events, but we always recommend using a product such as Segment which allows you to do one integration for your events and have them delivered to many other services that allow you to use those events for analysis or other actions — like triggering emails, or push notifications, etc.
You will need to use one of these tools (again…we recommend Sherlock) or build your own in order to access the events needed for your engagement score. Once you have this in place, you can move on to Step 3…
STEP 3: Score each ‘engagement’ event
Once you start tracking these engagement events, you need to then rate each event based on its impact, or its importance, to overall engagement. This is because:
All activity is not created equal.
Certainly the act of inviting a new user to your product is a more engaging act than simply logging in (as Lincoln Murphy argues). Writing a long post is more engaging than simply liking a post. Creating a project is a more engaging simply completing a task. Etc.
So you need to weigh these activities accordingly. You should have a table that looks like this:
You can have a score range of 1–10, 1–100, 1–1000…whatever you want. The point is you should give each event a point value that is in line with its value to overall engagement. As a general rule, more common, higher-frequency events should have lower point values. Less common, lower-frequency events — those used by “power users” — should have higher values.
Then, you can combine your point values with the number of times a user has taken each one of those engagement activities (in a time frame). Simply multiple the point value by the frequency and you get a total score for each activity (over a certain period of time).
Then you simply add up that Total Score/Event column and you have a total engagement score for that user.
If you do this for every one of your users, you can aggregate up all of those scores and get a total engagement for your product.
Voila! You have an user engagement score for each individual user as well as your product as a whole.
Easy right? 😀
STEP 4: Give it Context
While this step isn’t necessary for creating an engagement score for your product, it’s an essential step for making that score valuable for your business. There are a few ways you can give this score context so that it can help you make decisions:
- RANK YOUR USERS
When every one of your users has an engagement score, that gives you the opportunity to do something amazing — actually rank your users based on their engagement. This allows you to surface your power users, prioritize sales and support efforts, drive personalized marketing programs, identify churn threats and much more.
This kind of user ranking can help you understand your users in the context of their actual engagement with your product — which is incredibly powerful.
2. TRACK ENGAGEMENT OVER TIME
Ranking your users is a great way to give context to your engagement data, but so is comparing this score over time — for individual users, such as:
But also for your product as a whole.
Understanding the ebbs and flows of your engagement score over time is essential to understanding how the work you are doing — either on the product side or the marketing side — is affecting engagement with the product.
3. COMPARE POPULATIONS OR COHORTS
A User Engagement metric becomes tremendously helpful when comparing different populations of your of users. You can compare the engagement of new users vs older users; users on a free plan vs those on a paid plan; users with different access-levels; etc.
The opportunities to gain insights by comparing engagement across segments are endless.
4. CORRELATE WITH OTHER BUSINESS METRICS
Ultimately, a good User Engagement score is an essential business metric — not just a product metric — for any software business. So, comparing the levels of user engagement to other business metrics — like sales, retention, growth, LTV, etc is a great way to ultimately predict and forecast business progress based on engagement levels.
And if you don’t think user engagement is tied to the value of your business…read this (it cost Twitter over $1B in market cap): Morgan Stanley downgrades Twitter
Keep improving
Peter Drucker is famous for saying,
“You can’t improve what you don’t measure.”
This is certainly true when it comes to User Engagement. It’s an essential metric for every software business — so you need a way to measure it and make it actionable. We hope this post helps offer a framework for getting a quantitative handle on engagement. As always, let us know if you have any questions or comments!
Originally published at blog.knowtify.io on April 22, 2016.
