A Practical Guide To Understanding and Measuring Customer Engagement in eCommerce
At your eCommerce company, the ability to measure customer engagement is essential for improving your understanding of how well you're doing in your respective market.
What do I mean?
For instance, if a competitor has a higher level of customer engagement than yours, it can imply that they might be better positioned than you are when it comes to providing value for their customers and increasing eCommerce sales.
So, how do you compete? You’re in luck.
This Substack will discuss how you can measure customer engagement and what metrics you should include to increase your competitive advantage.
Customer engagement is the interaction between a brand and its customers
There are several ways to measure customer engagement, but here's one way: Take time to understand how many customers have interacted with your brand in some way over a specific period (like one year).
For instance, suppose you sell shoes online.
So, this could be as straightforward as knowing how many people have visited your site during that year--or even better yet--how many people have bought from you during that same time.
Let's say you want to see if your business has increased sales over the last year based on numbers you’ve gathered from Google Analytics.
If there was an increase in traffic, but not necessarily sales, then this might mean you need more targeted ads showing up when people search for products explicitly related to shoes since they're looking for something more specific rather than general keywords like "shoes" without any additional qualifiers like "men” or “blue.”
Measuring customer engagement aims to improve your understanding of how well you're doing in your market.
Measuring customer engagement aims to improve your understanding of how well you're doing in your respective market.
If you can better understand your customers' needs and wants, then it's easier to figure out what products they might want to purchase from your eCommerce store and how best to deliver it.
This leads directly to another benefit: Knowing which marketing strategies are working and which aren't.
If something doesn't work, then why not? What should you adjust or change so that your marketing strategy does work? Are there other options available for reaching out more effectively?
Answering these questions will give you the insight you need to make better business decisions.
Use several metrics to measure customer engagement, including social media statistics, website traffic metrics, and customer satisfaction ratings.
To measure customer engagement, you have to clearly understand what you want to achieve and what metrics indicate success.
If your goal is simply to increase awareness of your brand or product line--for example, launching a new product or doing some promotional campaign--then social media activity might be an appropriate metric for tracking success (or failure).
Suppose your objective is more focused on building relationships with individual customers over time. In that case, website traffic may make more sense as a measure of engagement because it gives insight into how much interaction each visitor had had with your site before they left it again (i.e., did they go after viewing only one page? Five pages?).
Here are some examples of eCommerce sites with good customer engagement:
Crate & Barrel has high customer engagement because they engage their customers daily through Facebook likes and comments. They also send monthly emails with tips on using products in different ways, encouraging their target audience to shop more frequently when they see something new that might be useful for them.
Sephora has very high customer engagement because it allows users to leave reviews on all products sold by the company. This helps shoppers who need clarification on certain shades or scents (or other aspects) of something before making a purchase online.
Another way to measure customer engagement is through a Net Promoter Score (NPS), which asks customers to rate their satisfaction on a scale of 1 to 10.
Define what you want to measure.
Don't worry about other eCommerce store's goals or whether they're ambitious enough for your business.
Be ambitious, but stay realistic.
Say you're looking at customer retention or acquisition rates to measure success and growth. So, I would recommend six months as an appropriate time frame for achieving some tangible, measurable results.
Track how long shoppers stay on your website
Which pages do they visit?
Do they add items to their shopping carts and then abandon them without purchasing anything, or do they return later to make a purchase?
Tracking these metrics will help you understand the overall engagement of your eCommerce business, which you can use as an indicator of growth and success.
Monitor any negative comments from customers on social media or in reviews about your products, services, or brand.
While you may not want to hear it, these comments can be helpful if you use them correctly.
Why?
Well, they let you learn more about what people say about your business and what they like (or don't like) about it so that you can make improvements over time.
Understand what your target audience wants
There are still more ways to measure customer engagement.
An effective tactic is to start measuring your online store's customer engagement by reading social media posts. What are people saying about your brand? Are they talking about your brand on Twitter or Facebook? If so, what are they saying?
Are there any negative comments, or reviews, that you should address right away?
If the answer is yes--and it probably will be--then it's time to take action.
To summarize
So, if you're looking to improve your customer engagement, the first step is to define what you want to measure. Once you have your answer, it's time for some analytics.
You can use any number of tools that will help track these metrics for you--I recommend starting with Google Analytics or HubSpot Sales.
The critical thing is that by measuring your customer engagement levels over time (and comparing them against your competitors'), you get to see where you need to make improvements to stay competitive in your industry and keep growing solid profits year after year.
Until next time, your friend Parrotfish. 🤝