Customer engagement vs customer experience
Customer experience (CX) is more passive than customer engagement (CE). With CX, the customer is the recipient of what your company offers - it's all about their perception of your brand.
On the other hand, CE requires active participation from your customers. You create the channels and content, while your users interact by sending emails, engaging with your social media posts, and more.
Think of CX as the customer's perception of you, while CE is how you interact with your customers. And the best part? CX and CE work together - the more positive experiences your customers have with your brand, the more they engage with you, and the better their overall experience becomes.
i. How To Measure User Engagement?
Key metrics to measure user engagement in B2B SaaS
Customer Effort Score (CES)
Customer Effort Score (CES) is a measure of how much effort a customer had to exert to get their issue resolved or their need met. It is typically measured on a scale of 1-5 or 1-7, with higher scores indicating lower effort.
sum of effort ratings
CES = ____________________
total number of responses
To calculate the customer effort score,
you can ask customers a simple question, such as "How easy was it for you to solve this problem/complete this action?" or use a statement like "[Company] made it easy for me to resolve my issue."
Customers are then asked to rate their level of agreement or disagreement with the statement using a numeric scale.
The scores are added up and divided by the total number of responses to get the overall customer effort score. This score helps businesses measure how much effort customers have to exert to get their needs met and can help identify areas for improvement.
Churn rate is a metric that tracks the number of customers who discontinue using your software within a specific time frame.
This metric should be used as a starting point for further analysis and experimentation.
In the event of a high churn rate, it's important to identify the reasons behind it and determine what changes need to be made. It may also be helpful to compare your churn rate with industry benchmarks, as SaaS churn rates can vary significantly, ranging from 1% to 17%.
Customer Lifetime Value (LTV)
LTV measures the total potential revenue you can expect to earn from a customer throughout their lifetime. Use LTV as a benchmark for deciding how much to spend on customer acquisition and retention while maintaining a decent profit. A good rule of thumb is to spend no more than one-third of LTV on customer acquisition.
Daily/Monthly Active Users (DAU/MAU)
The active users metric measures the number of unique users that engage with your software in a day or month.
To gain more insights, it's helpful to segment your users to understand how many are new and returning customers. This metric becomes even more valuable when you establish a minimum threshold for what constitutes "active" use.
For example, if you have a time-tracking app, you might consider a user active if they not only log in but also track time for at least one activity during the day. Focusing on this metric can help you better understand and improve customer engagement with your software.
Week 1 Engagement
In the highly competitive world of SaaS, offering upfront pricing, free trials, and freemium models is now the norm. As a result, customers may churn quickly if they have a poor onboarding experience or fail to see the value of your software. You can identify these customers by monitoring their engagement during the first week.
To measure engagement, you don't need a complex formula. Simply track how often users log in or complete specific actions during the first week. You can also measure the length of each session to gain further insights.
By focusing on this metric, you can identify areas for improvement in your onboarding process and ensure that customers see the value of your software from the outset. This can ultimately lead to greater customer satisfaction and retention over the long term.
Time Spent in the Product
This is self explanatory and can be measured in a number of ways like Avg sessions per user, Monthly/ daily active sessions , usage metrics etc.
Sessions per day (Activation) This is one of the key metrics that can give insights on product engagement.
Tells you how many users interact with specific features over a given period. This is a crucial metric as it validates new features along with helping in understanding overall engagement level.
ii. Strategies for improving user engagement in B2B SaaS
#1. Measure engagement at the beginning
It's not uncommon for SaaS founders to have a vague idea of how well their products are engaging customers. They may jump straight into trying to improve engagement without a deeper understanding of their product's performance. This can lead to a lack of benchmarks to evaluate success, no data to highlight engagement gaps, and a lack of insights to launch meaningful communication strategies to remind customers of their product's existence.
To avoid this mistake, it's crucial to measure and analyze engagement metrics first. This can help identify areas of the product that may be leaving customers disengaged, and allow for the creation of a plan to turn the situation around.
Taking the time to gather and analyze data can provide valuable insights into customer behavior and help make informed decisions to improve engagement, customer satisfaction, and retention. So, before rushing into any changes, be sure to first understand your product's engagement metrics and identify areas for improvement.
#2. Make a solid first impression with the product
It's important to keep in mind that those who sign up for your free trial or account likely haven't seen your product before, and may not be familiar with its interface or the process of setting up similar products.
However, this presents an opportunity to ensure that users quickly understand the value of your app and how to use it effectively.
To achieve this, consider implementing these ideas:
- Firstly, focus on creating an exceptional user onboarding experience that guides users through the product and its features.
- Provide clear explanations of the interface through tooltips, in-app notifications, and other relevant resources to help first-time users navigate the product with ease.
- Guide users towards the activation point and aim to get them to reach this milestone as quickly as possible by providing tutorials or other useful strategies.
- By taking these steps, you can create a positive first impression of your product and help users understand its value right from the start.
#3. Market advanced features to more experienced users
It can be easy to assume that long-time users of your product are familiar with all of its features. However, there may be many experienced users who have never even tried some of the more advanced features.
The truth is that these advanced features can provide additional value to users and enhance their engagement with your product. To help users discover and make use of these features, it's important to conduct a proper analysis of their features, advantages, and benefits.
Once you have a clear understanding of what features to highlight, you can use in-app notifications or email campaigns to encourage existing customers to try out these advanced features.
#4. Always announce new features in the product
Email campaigns are a popular way to notify users about new features, but they do have limitations. When users receive these emails, they are often out of context and may not be in the app at the time to try out the new feature. Additionally, if they don't plan on logging in for some time, they may miss the feature announcement altogether.
However, this doesn't mean that you should stop emailing users about new features. Instead, consider complementing your email messages with in-app announcements.
By doing so, users not only learn about the new feature but can also click and see it immediately, allowing them to try out the feature in-context and maximize their understanding and engagement with your product.
Using both email and in-app announcements can help you ensure that your users are aware of new features and can use them to their fullest potential, even if they are not currently logged in.
#5. Educate users about the best ways to use your product
A great way to help users achieve success and reach the activation point with your product is by educating them on the best ways to use it.
Customers often begin using a product with a specific objective in mind, but may lack the necessary expertise or experience to achieve success right away. Additionally, they may not realize the full potential of your product and how it can help them reach other goals.
To address these challenges, product-led content can be an effective strategy. This can include articles, walkthrough videos, how-to guides and courses, tutorials, use cases, and other resources that help customers learn how to use your product to achieve their goals.
By providing users with valuable information and resources, you can help them achieve success with your product and naturally increase their engagement over time.
#6. Offer high-touch help to customers
While product-led content can be a great start for customers, some may require more personalized assistance to get the most out of your product.
This is where customer success can play a critical role. By offering customers the option to book a session with a customer success manager or having managers proactively reach out to potential customers, you can provide more targeted and personalized support.
To make this process more efficient, you could automate the booking process with a calendar link in a behavior-based campaign. This can help ensure that customers receive the assistance they need at the right time, and ultimately lead to higher engagement and satisfaction with your product.
Tips for improving user onboarding and activation
Keep it simple:
Keep the onboarding process as simple as possible. Avoid overwhelming users with too many options or too much information at once.
Focus on the value:
Clearly communicate the value of your product and how it can solve your user's problems. This will motivate users to complete the onboarding process and activate their account.
Use progressive profiling:
Collect user information gradually, over time. This helps to avoid overwhelming users with too many requests upfront.
Provide interactive guidance:
Use interactive tutorials, tooltips, and walkthroughs to guide users through the onboarding process and help them understand how to use your product.
Offer incentives, such as discounts or exclusive content, to users who complete the onboarding process and activate their accounts.
Track user behavior:
Use analytics to track user behavior during the onboarding process. This will help you identify areas where users are getting stuck and make improvements to the process.
Test and iterate:
Continuously test and iterate the onboarding process to make improvements and ensure that it is as effective as possible.
Best practices for optimizing user interfaces and user experience design
Use clear and concise messaging to guide users through the product. Avoid using technical jargon or complicated language that could confuse users.
Conduct user testing to gain valuable feedback on the product's UI/UX. This can help you identify pain points and make improvements.
Optimize your product for mobile devices, as more and more users are accessing products from their mobile devices.
Use personalization to create a tailored experience for users. This can help increase engagement and create a more memorable experience.
Feedback and support:
Provide users with easy ways to provide feedback and get support. This can help improve the product and increase user satisfaction.
Use data to inform design decisions:
Use data to inform design decisions. This can include analytics data, user feedback, and user testing results. Data-driven design can help you make informed decisions and optimize your product's UI/UX.
Design for usability:
Ensure that your product is easy to use and understand. Use intuitive navigation, clear messaging, and visual cues to guide users through the product.
Create a seamless user journey:
Create a seamless user journey that takes users from onboarding to activation and beyond. Ensure that each step in the journey is clearly defined and provides value to the user.
Use visual design to enhance the user experience:
Use visual design to enhance the user experience. This can include using color, typography, and layout to create a cohesive and visually appealing design.
Focus on micro-interactions:
Micro-interactions are small interactions that users have with your product. These can include animations, button feedback, and progress indicators. Micro-interactions can enhance the user experience and make your product feel more polished.
Iterate and improve:
Continuously iterate and improve your product's UI/UX based on user feedback, data, and best practices. This can help you stay ahead of the competition and provide a great user experience for your customers.
iii. Building a user engagement culture in a B2B SaaS organization
How to foster a user-centric mindset throughout the organization
Lead by example:
Leaders should model a user-centric mindset and prioritize the user experience in decision-making.
Share user feedback:
Share user feedback and insights throughout the organization. This can include customer service feedback, analytics data, and user research findings. This helps employees understand the needs and pain points of customers.
Encourage employees to put themselves in the shoes of the user. This can include asking questions like "How would I feel if I were the user?" or "What would make this product more valuable to me?"
Incorporate user feedback into the product development process:
Incorporate user feedback into the product development process to ensure that the product meets the needs of your customers. This can include user testing, surveys, and feedback loops.
Provide training on user-centered design principles and methodologies. This helps employees understand how to create products that meet the needs of users.
Create cross-functional teams:
Create cross-functional teams that include representatives from product development, customer service, and marketing. This helps ensure that everyone is working towards a common goal of creating a user-centered product.
Celebrate successes and recognize employees who prioritize the user experience. This helps create a culture that values the user and encourages others to do the same.
Best practices for incentivizing and rewarding employees for driving user engagement
Tie incentives to user engagement metrics:
Tie incentives and rewards to user engagement metrics, such as daily active users or customer retention. This helps ensure that employees are focused on the metrics that matter most to the business.
Make incentives achievable:
Make incentives achievable, so employees feel motivated to work towards them. Unrealistic or unattainable incentives can demotivate employees.
Offer non-monetary incentives:
Offer non-monetary incentives, such as recognition or additional vacation time. These incentives can be just as motivating as monetary incentives.
Encourage collaboration among employees to drive user engagement. Reward teams that work together to create a better user experience.
Provide ongoing feedback:
Provide ongoing feedback on employee performance and how it contributes to user engagement metrics. This helps employees understand how their work impacts the business.
If you feel like you have nailed your engagement optimization from a product standpoint and now need to boost engagement and acquisition through marketing, then let’s talk!