What Customer Engagement Metrics Actually Matter?

Customer engagement is a vital piece of the modern marketing puzzle. Still, with so much consumer data available these days, it can be difficult to pinpoint the customer engagement metrics that are worth tracking and analyzing. 

Blog Post

9 minute read

Jan 17, 2024

When thinking about a customer engagement strategy, I always start by reflecting on my own experiences as a customer. By shifting my mindset, I can draw from my past experiences as a customer, both those that I’ve loved (like getting no-cost same-day delivery in a pinch) and those that left me wanting more (like when my food got delivered to the wrong apartment building), to inform the development of the customer engagement strategy.  

Once the strategy is in place, though, it needs to be monitored so adjustments and improvements can be made that are rooted in hard data. The metrics you choose to track will provide that data, making it crucial that you’re not just tracking CEM, but you’re tracking the right data points for your specific customer experience strategy.  

The following sections explore some of the most popular metrics that organizations track and how they can add value to your customer engagement strategy.  

Customers have more choices than ever before in the modern market, making it all that much more important to be unique and interesting. Learn more about defining your brand perception in Impact’s webinar, Attract, Engage Stand Out – Building Effective Marketing Campaigns.   

Why Track Customer Engagement Metrics?

Tracking customer engagement metrics is a great way to gain another level of understanding into your customer base because of the story they tell. These numbers reflect the experience your customers have throughout the buyer’s journey.  

At this point, it’s important to note that customer engagement metrics do an excellent job of highlighting what you’re doing right for your buyers, and where there’s room for improvement. These insights can then be used to improve your overall offerings and in turn, actually grow your market share. 

When looking at customer engagement metrics specifically, we’re zooming in on the bottom of your funnel, rather than looking at the entire picture. By doing this, we can learn about the customer’s values, pain points, and purchase behaviors in order to better serve the modern market and any future customers.  

The ability to decipher and act on customer data and feedback are strategic advantages in a hyper-competitive market. Customer engagement metrics empower organizations to identify areas for improvement, optimize marketing strategies, and foster relationships with prospects and existing customers. 

Customer engagement benefits

The 7 Best Customer Engagement Metrics to Track

It can be a little overwhelming to look into the sea of data that floats through the ether and figure out which metrics are worth tracking for your customer engagement strategy. To make matters more complex, different metrics matter more in different industries and most organizations only focus on a handful.  

For example, a retailer might want to focus on annual revenue as a customer engagement indicator, while restaurants would be better served (pun intended) by looking at the volume of visits/month.

However, here are seven of the best customer engagement metrics to track right now that stay relevant across industries:  

1. Net Promoter Score (NPS)  

2. Customer Satisfaction Score (CSAT)

3. Customer Retention Rate

4. Churn Rate

5. Conversion Rate

6. Customer Lifetime Value and Customer Acquisition Cost (CLV and CAC)

7. Website Metrics

1. Net Promoter Score (NPS)

Net promoter score (NPS) is a fundamental metric for businesses aiming to comprehend the loyalty and satisfaction levels of their customer base. It operates on a simple premise: customers are asked a single, crucial question that uses a scale of 0-10: "How likely are you to recommend our product or service to a friend or colleague?"  

Based on their responses, customers are categorized as promoters (9’s and 10’s), passives (7’s and 8’s), or detractors (anyone who answered between 0 and 6). The score is then calculated by subtracting the percentage of detractors from the percentage of promoters, which should leave you with a score ranging between –100 and 100.  

The resulting NPS not only serves as a numerical indicator but also provides qualitative insights into the factors influencing customer recommendations. A high NPS suggests a strong likelihood of positive word-of-mouth referrals, while a low score signals potential areas for improvement. 

2. Customer Satisfaction (CSAT) Score

Customer satisfaction (CSAT) score is a cornerstone of customer feedback mechanisms, offering businesses a direct channel to measure and assess customer contentment. Typically measured on a scale from 1-5, the CSAT is derived from post-interaction surveys that inquire about the customer's satisfaction with a specific product, service, or overall experience.

High CSAT scores can represent successful interactions, confirming whether or not a company is meeting or exceeding customer expectations. Conversely, lower scores indicate areas that may need attention, prompting businesses to fine-tune their strategies to enhance overall satisfaction. 

3. Customer Retention Rate

The customer retention rate is a critical metric that sheds light on a business's ability to increase the average frequency of purchase their customers make in any given timeframe.  

Calculated by comparing the number of customers at the beginning and end of a period, divided by the number of new customers acquired, a high retention rate signifies customer satisfaction and a strong connection to the brand.  

Successful customer retention not only secures a steady revenue stream but also fosters brand awareness which helps with the ultimate goal of increasing your total market share. Understanding and optimizing the factors that contribute to high retention rates are key to long-term success. 

4. Churn Rate

Churn rate is essentially the inverse of retention rate. Rather than representing the percentage of customers who make purchases in a given timeframe, the churn rate gives insight into the number of customers who discontinue using a product or service during a given period.  

This is an incredibly helpful metric for organizations investigating the reasons that customers aren’t returning and can help you create tactics that solve customer pain points.  

High churn rates can be indicative of product dissatisfaction, poor customer service, or competitive market forces. Monitoring and analyzing churn rates are crucial for businesses to implement proactive strategies, ensuring customer satisfaction and loyalty, and ultimately reducing the negative impact on revenue. 

5. Conversion Rate

Conversion rate measures the percentage of website visitors who take a desired action, such as making a purchase, filling out a form, or signing up for a newsletter. This metric is integral for businesses seeking to evaluate the effectiveness of their marketing campaigns.  

A high conversion rate indicates that the content you’re producing, the user experience you deliver, and your overall value proposition resonate well with the target audience. Conversely, a low conversion rate tells you there’s work to be done in aligning your offerings with the needs of your target audience.

Tracking the conversion rate is also helpful when looking at the entire marketing funnel and how it impacts your market share. 

6. Customer Lifetime Value and Customer Acquisition Cost (CLV and CAC)

Customer lifetime value (CLV) and customer acquisition cost (CAC) are long-term metrics that organizations track to understand the financial relationship between marketing efforts and customer spending.

CLV estimates the total value a customer is expected to bring to the business over the entire duration of their relationship. This encompasses factors such as returning low-purchase-frequency customers, upsells, referrals, one-time buys, regular high-purchase-frequency customers, and everything in between.  

On the other hand, CAC calculates the cost associated with acquiring a new customer, encompassing marketing, advertising, and sales expenses. The delicate balance between the customer lifetime value and the customer acquisition cost is pivotal for businesses looking at the financial efficacy of their marketing campaigns and customer acquisition strategies.

A positive CLV-to-CAC ratio ensures that the revenue generated from a customer surpasses the cost of acquiring and retaining them, contributing to sustainable profitability and market share growth. 

7. Looking at Website Metrics

Another great way that modern businesses can keep tabs on the success of their customer experience strategy is with website metrics.  

There’s a bundle of different data points that can be pulled from the website directly that can help paint the broader picture of customer engagement. User data is specifically helpful in pinpointing where your audience is finding the most value, spending the most time, and consuming the most content.  

Metrics like engagement rate, pages per session, and session duration give you deeper insights into the behaviors of your customers when they’re actually on your site. With this information in hand, you can pinpoint which sections of your website are performing well in addition to the touchpoints that could use a little tender-love-and-care.  

Not only that but through continual monitoring, you’ll be able to see the results of the adjustments you make and how they’re impacting the customer experience overall.  

Final Thoughts on Tracking the Right Customer Engagement Metrics

If you were lost in the middle of the jungle without any survival training, you wouldn’t have any way to know which plants were safe to eat and which weren’t. You wouldn’t even know where to start looking. With survival training, on the other hand, you’ll be able to identify edible plants, avoid the poisonous ones, and find your way home.  

The same is true of your customer engagement strategy. If you don’t take the time to understand what different metrics or data points mean, you won’t even know how to start measuring customer engagement accurately, let alone which metrics are worth tracking for your organization.  

There are a lot of ways to make your brand pop so it’s not lost in the sea of competitors. Learn how to create a unique experience for your consumers in Impact’s webinar, Attract, Engage Stand Out – Building Effective Marketing Campaigns. 


MarketingCustomer ExperienceBrand Reputation Management


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