Customer online engagement level

Customer online engagement is the degree to which customers invest attention, participation and effort in interactions with one another, an organisation or a brand through digital channels. It helps management understand whether online activity is building a meaningful relationship or merely generating traffic.

When to use it

• Answer the key performance question: “How well are we engaging our customers online?”
• Assess this KPI within the Marketing and sales perspective.
• Plan data collection, formula use, reporting frequency, and data-source requirements for this KPI.
• Compare results against the targets, benchmarks, examples, or trend guidance available for this KPI.

Origins

Online-engagement measurement developed alongside commercial websites and later expanded with social platforms and online communities. Early web analytics emphasised visits, page views and clicks; richer event tracking added duration, depth, contribution and repeat behaviour. Because platforms define interactions differently, no universal engagement formula emerged. A useful metric must therefore connect a clearly defined customer action to a stated relationship or journey outcome.

What it is

Perspective: Marketing and sales perspective.

Key performance question: How well are we engaging our customers online?

Customer engagement combines four related ideas.

1. It is a social phenomenon made possible by widespread digital participation.
2. It describes how customers behave in online communities organised directly or indirectly around product categories and consumption interests, including the process and behaviours associated with stronger positive engagement.
3. It includes marketing practices intended to create, stimulate or influence engagement. Those practices should be coherent across online and offline channels even though digital interaction is the primary measurement environment.
4. It also refers to the metrics used to assess whether those practices are working.

An individual customer can be positioned on a continuum according to the strength of their investment in the company. Repeated positive experiences can deepen that investment. Richard Sedley captures the idea as repeated interaction that strengthens a customer’s emotional, psychological or physical investment in a brand.

Engagement matters because it can act as a leading indicator of loyalty and commercial performance. Gallup reported that organisations which optimised engagement outperformed competitors by 26% in gross margin and 85% in sales growth. Engaged customers tend to buy more, return more often and sustain the relationship longer. Amazon reflected this emphasis when it described its ambition as serving the world’s largest engaged online community.

Highly engaged customers:

• Tend to be more loyal, so stronger engagement among target customers can support retention.
• Are more likely to provide credible word-of-mouth advocacy at no direct media cost to the company.
• May raise problems directly with the organisation rather than complain first to other customers.
• Can supply useful recommendations for improving the offer.

How to use it

Measurement