The importance of customer engagement to your company’s profitability and growth cannot be overemphasized. According to a recent survey, 65% of consumers say that they’ll stay loyal to a business if they get a more personalized experience.
It’s clear that the more engaged your customers are, the more they buy from you and promote your brand to others.
But how can you tell if your customers are engaged? And how do you know what strategies are working? The answer lies in customer engagement metrics.
These metrics give you insights into how your customers relate to your brand, helping you make informed decisions.
Let’s explore 11 of the most useful customer engagement metrics for B2B SaaS companies to track in 2024.
Customer Engagement Metrics for B2B SaaS Companies
You might already be thinking of ways to improve engagement, or score leads with platforms like Breadcrumbs. While that’s a step in the right direction, you need first to know what customer engagement strategies are working and which aren’t.
Here are some metrics you can track to find that out.
Customer Engagement Metrics #1. Net Promoter Score (NPS)
NPS helps you measure your customers’ loyalty. It tells you how much they trust your products and services, and how willing they are to recommend them to people. All on a scale of 0 to 10.
With this metric, you can even measure how much effort you’ve put into your customer service.
A typical NPS question you can use is “On a scale of 1 to 10, how likely are you to recommend our product to your friends?”
This helps you track your customers’ impressions of your company and make informed changes that impact customer loyalty.
Additionally, aside from the rating question, you can also use an open-ended question. Ask customers why they gave a particular rating to one of your products or services.
What’s more?
To calculate your NPS, you need to find the percentage of your customers that are:
- Detractors: These are unhappy customers, and fall in the 0-6 score range.
- Passives: These are customers who are satisfied but indifferent. They fall in the 7-8 score range.
- Promoters: These are loyal customers that are willing to promote your brand. These fall between 9 and 10.
Once you have the figures, subtract the percentage of Detractors from that of Promoters. You should get a score between -100 to +100. A positive score shows you have more loyal customers than otherwise and vice versa.
Customer Engagement Metrics #2. Customer Churn Rate
This metric measures the percentage of customers that have stopped subscribing to your SaaS product in a given period.
According to the Younium guide on subscription billing, you can get reliable metrics by analysing billing data and analytics.
If you have a high churn rate, it means that you need to improve your customer engagement and satisfaction.
Here’s a simple formula for calculating your customer churn rate:
(Total number of customers lost in a given time/total number of customers at the beginning of the period) x 100
For instance, as a B2B SaaS company, say you had 2,000 customers last quarter and lost 55 of them. Your churn rate will be:
(55/2,000) x 100 = 2.75%
Even though this is below the 14% average churn rate for software companies, it shouldn’t be ignored.
Take a look at the median churn rate by industry for reference:
You can reduce this further by improving your customer retention strategies, customer experience, account management, onboarding process, and other areas causing attrition.
Customer Engagement Metrics #3. Product Adoption Rate
As a B2B SaaS company, you can use the effective lead generation strategies highlighted by Attrock to find prospects. But your work doesn’t end there.
You need to ensure that these leads not only subscribe to your SaaS product but also actively use and get value from it. To track this, you need to calculate your product adoption rate.
This metric is a measure of the number of users that engage with all your product’s features. Analyzing this helps you make data-driven decisions that improve your SaaS product and user satisfaction.
More importantly, monitoring your product adoption rate allows you to identify areas where customers may be facing challenges. They could be facing challenges utilizing specific features or maybe their onboarding was not done well.
But how can you calculate it?
Let’s say one of your customers used 3 out of 6 product features last month. This means that their monthly adoption rate would be 50%.
On the other hand, if they used all 6 features, their adoption rate would be 100%.
Another way to calculate this, especially if you just launched a new feature is:
(Number of users that used the new feature/Your total number of users) x 100
This will give you the adoption rate for the new feature you launched.
Customer Engagement Metrics #4. Customer Effort Score (CES)
CES measures how easy it is for customers to achieve their goals using your product. This is a key factor that determines user experience.
A low CES shows that customers find it easy to utilize your product’s features, navigate the platform, and accomplish tasks. That positive experience contributes to a higher customer satisfaction level and can lead to increased customer retention and loyalty.
Conversely, a high CES indicates that customers are facing challenges while using your product. This could lead to dissatisfaction and increased customer churn.
As a B2B SaaS company, this data helps identify pain points in your customer’s journey. It enables you to implement changes that reduce customer effort and improve user experience.
To measure your CES, use surveys that ask your customers to rate their experience after using your product.
Here’s an example of a CES survey:
Based on your survey design, find a way to assign a customer effort score to each response.
Collect all the scores from such surveys, calculate the sum of scores, and divide it by the number of responses to get your average CES.
Customer Engagement Metrics #5. Lead-to-Customer Conversion Rate
Lead-to-customer conversion rate is a measure of the number of leads that ultimately purchase a product or subscribe to your service. This makes it one of the most crucial customer engagement metrics for B2B SaaS companies.
That’s not all!
It also shows how well your B2B sales lead generation efforts are working and how many leads are converted to actual customers.
In addition, tracking this metric allows you to pinpoint areas within your sales funnel that need improvement. So, improving this conversion rate can lead to an enhanced bottom line and significant revenue growth.
To get an accurate lead-to-customer conversion rate, you should take note of these crucial touchpoints:
- Trials to premium rate
- Product-quality leads (PQL) to customer rate
- Sign-up-to-PQL rate
- Visitor sign-up rate
Customer Engagement Metrics #6. Customer Lifetime Value (CLV)
CLV represents the total revenue your company can expect to earn from a customer throughout their association with your company. Here’s what it looks like:
By tracking this metric, you can see how satisfied different segments of your customer base are.
What’s more, your CLV allows you to:
- Forecast long-term revenue
- Optimize customer acquisition costs
- Implement strategies to retain existing clients
- Create and prioritize an ideal customer profile
- Identify upselling and cross-selling opportunities
You can calculate your CLV by multiplying your average revenue per user (ARPU) by the average customer lifespan. This gives you an overview of the growth potential of your company, helping you distribute resources effectively.
However, to calculate this accurately, you need to get information on:
- Average revenue per customer
- Renewal rates
- Purchase history
Customer Engagement Metrics #7. Customer Retention Rate (CRR)
According to research, companies lose over $29 for every new customer they acquire. So, retaining customers and employing effective customer retention strategies, such as implementing a robust ticketing system, are crucial to any company.
With CRR, you can measure the percentage of customers who turn into repeat buyers over a specific period. This gives you insights into the overall health of your customer relationships.
More so, you get an overview of the effectiveness of your customer engagement strategies and client satisfaction.
By monitoring your CRR, you can identify areas for improvement and solve customer issues, allowing you to provide more robust, customer-centric offerings.
If you have a high CRR, it means a significant portion of your existing customers are renewing their subscriptions.
Even better, it shows that you are efficiently managing customer relationships. This reduces the need for constant acquisition efforts and the associated costs.
A low CRR, on the other hand, means there are issues with customer satisfaction. This shows there’s a need for improvement to increase customer retention.
With the help of the right help desk ticketing software, live chats, chatbots and customer service apps, you can increase customer satisfaction which helps you increase CRR.
To calculate your CRR, you need to know:
- The number of customers at the beginning of a period
- The number of customers that stayed active at the end of that period
Here’s a simple formula you can use:
(Total number of paying customers at the end of a period/Total number of paying customers at the beginning of that period) x 100
Here are the customer retention rates, by industry, for your reference:
Customer Engagement Metrics #8. Social Media Metrics
With social media, you get a channel for monitoring and facilitating customer engagement.
You can even monitor brand mentions and analyze neutral, negative, or positive sentiments. Tracking comments and reviews also give you insights into how customers perceive your brand. This allows you to address customer pain and pleasure to boost customer retention.
This way, you understand how satisfied and engaged your customers are. Plus, you can address any concerns easily.
Moreover, these metrics show you the conversion rates from social media campaigns. You can see how effective these channels are in driving business growth and how effective your contactless marketing strategies are.
Here’s a simple formula for calculating your social media engagement:
Customer Engagement Metrics #9. User Session Duration
User session duration, or session time, measures how long your customers stay engaged on your website or app. It helps you identify what content, services, products, or features your users are most interested in.
Look at it this way:
If your platform has complex functionalities, a longer session duration suggests that customers are actively exploring features.
This metric gives you insights into whether users are spending sufficient time during onboarding sessions. This shows a commitment to learning and understanding your product.
For a B2B SaaS company, the average user session duration is 1 minute 17 seconds. So, you should aim for something above that.
However, you can choose an ideal session time depending on your products and services. Then, monitor how often customers reach that duration.
A simple formula for calculating this is Total Session Duration/Number of Sessions.
Customer Engagement Metrics #10. Bounce Rate
Bounce rate shows you how many people visited your website or app and left almost immediately, without any engagement.
A lower bounce rate is a good thing, though.
A low bounce rate shows that users are engaging with your website or app. It tells you that your content catches your visitor’s attention, making them stay long on your platform.
Alternatively, a high bounce rate means that visitors are not engaging with your content. Or, your content is attracting the wrong audience.
It might suggest that visitors are not finding the information, content, or feature they are looking for.
Either way, analyzing bounce rates at different stages of your customer journey helps you optimize your conversion funnel.
There’s more!
This metric also gives you insights into the effectiveness of your landing pages’ messaging, calls-to-action, and design. It lets you make proper changes to optimize your landing pages for better customer engagement.
For reference, here are the average bounce rates for different websites:
Customer Engagement Metrics #11. Monthly and Daily Active Users
The Monthly and Daily Active Users (MAU and DAU) metrics give you insight into the number of active users using your platform at specific times.
You can track the usage patterns and behaviors over time.
One thing, though: you need to carefully analyze your DAU to MAU ratio. The closer the figures, the better.
When you pair a low MAU with a high DAU, it means that you have many daily users with a low overall monthly engagement.
However, a steady increase in active users over time shows effective product adoption and onboarding.
In addition, this metric provides vital information on what platform features are most frequently used. This allows you to optimize your product-led growth strategies with a focus on improving the most valuable aspects of the platform.
What’s more, monitoring changes in your MAU and DAU helps identify changes in user retention. Growing or consistent numbers show ongoing value offered to customers and a positive user experience.
Customer Engagement Metrics: Wrapping It Up
Creating strong relationships with your customers is vital to the growth of your business. Track these 11 customer engagement metrics for B2B SaaS companies to understand the current situation and make improvements to foster better customer relationships.
From bounce rates to customer retention rates, these metrics analyze user behaviors to show you what channels and strategies are working. By monitoring these metrics, you can optimize your products and services for better user experience and engagement. Good luck!