Lesser-Known Benchmarks That Will Improve Your Customer Engagement
The article lists down multiple factors that impact customer engagement and how it can be measured.
Customer engagement, followed by good customer experience, acts as the fuel of your business growth. This keeps customers returning and makes them loyal to your brand. A good customer engagement strategy would spur referrals and word-of-mouth marketing for your brand.
There is no doubt that engaged customers are more responsive to your marketing campaigns, more likely to convert, and less likely to churn. Having stated the benefits of customer engagement, the next step is - how do we weigh a good customer strategy? The answer is ‘customer engagement metrics.’
Customer engagement metrics give you a critical view of how well your current strategies are working and provide insight into how you can improve.
As a SaaS company, you know many industry metrics that help you analyze business performance. However, in the long term, you may need to be precise about benchmarks specific to the vertical.
The benchmark will help you improve key performing metrics such as customer acquisition cost, retention rate, and churn rate. Analyzing them will help you optimize the performance of your SaaS organization.
What is a Customer Engagement Benchmark?
Customer engagement plays a crucial role in the growth and success of any business.
Primarily, customer engagement is a combination of three different metrics:
A well-designed SaaS company will analyze these three metrics and take action to improve them promptly.
What Constitutes the Lesser-Known Customer Engagement Benchmark?
Below is a list of the lesser-known benchmarks that we have found helpful:
1. Customer Lifetime Value (CLV) per CapEx Dollar Spent (Retention Rate)
CLV is a standard indicator representing how much profit a customer will bring to your business. The retention rate acts as a testament to CLV. It shows how much profit you can derive from a customer's lifetime with your company.
If customers are churning at a higher rate or leaving immediately after buying, lower CLV is available in revenue per customer.
2. Net Promoter Score
This benchmark tells you how likely your customers are to recommend your company to a friend or colleague. In addition, it's an excellent way to measure whether your product delivers value above and beyond the competition.
This one number can help you understand how likely your customers are to repurchase, recommend and remain loyal to your product in the future.
It's calculated by taking the percentage of promoters' customers (those who answer 9 or 10 on a 10-point scale) and subtracting the percentage of detractors (those who give answers lower than 6).
3. Customer Effort Score
This metric measures how difficult it is for customers to do business with your brand. It is a comprehensive and holistic view of just asking them if they will likely recommend you.
The CES measures the ease or difficulty of contacting a company, and it's based on three factors:
Contact channel — how customers can reach you — like a phone call or webchat
Wait time — how long a customer has to wait to speak with an operator, and
Satisfaction with the resolution process—or how likely a customer is to return to do business in the future
4. Customer Experience Index (CXI)
The CXI goes beyond traditional customer satisfaction surveys to gauge how customers feel about the entire experience with a company, including interactions with sales reps, technical support, and online self-service tools.
Besides customer experience, it also assesses customer loyalty and determines the factors that influence customer satisfaction significantly.
Simply put, the Customer Experience Index (CXI) is a new benchmark measuring the quality of customer interactions. CXI has four major components:
5. Average Time on Site
This metric is a good indication of how much time consumers spend on your site. A higher average time on site is better, implying customers are engaged with your website content and UX.
For example, if ten unique visitors spent on average 20 minutes on-site during a given month, the average time on site is 20 minutes.
What are the Recommendations for Enhancing the Customer Engagement Benchmark?
Recommendations for benchmarking customer engagement include:
- Provide a high-quality experience with your product. Customer experience includes everything from the quality of your product to how you handle customer service issues and measure up against competitors.
- Find the right balance between customer service and sales. It is necessary to talk to customers about their requirements. At the same time, pay attention to sales efforts that could bring in new revenue.
- You should measure your results consistently if you want to be on top of your game. Multiple tools are available that determine which aspects contribute to revenue growth and what could be improved.
- The majority of the audience is present on social media. This is a two-way channel to interact with them and find the persona and the language they prefer. The information will act as a foundation for creating enticing content in the long term.
What's a Customer Engagement KPI and How to Analyze it?
Customer engagement KPI, also known as customer retention rate, is a term that describes how often your customers are active in your app. It's a substantial number to monitor because it directly affects your business. The higher the customer engagement KPI, the more likely your app will continue to grow in popularity and profitability.
You've got employees to manage, customers to serve, and many other priorities. But to grow your business, you must keep customer engagement benchmarks in mind. These are some of the most important metrics to analyze as you strive toward better customer engagement:
Purchase pattern is one of the best ways to gauge how well you meet customers' needs. If they're buying more from you over time, that means they like what they see on your website or in your store. And if you can boost these purchases, your revenue will also grow.
Types of Transactions
When you analyze different transactions, you can analyze which ones significantly impact revenue and customer engagement KPI. For example, if customers buy more frequently but spend less per transaction, that could be a sign that they're getting bored with your offerings or finding cheaper options elsewhere.
We can all learn something from these lesser-known benchmarks for customer engagement. While measuring what your customers have to say isn't a new concept, each of these benchmarks will take your customer engagement to a new level.
By becoming aware of these trends and implementing them, you will be on the path toward better engagement.