Product Engagement

What is product engagement?

Product engagement is a method of gauging how customers interact with a product. Sometimes called user engagement, it is a way of measuring how and why customers are using an item or tool. 

Measuring product engagement is an important way to learn more about the value customers find in a solution. With this in mind, companies can determine strengths and weaknesses in the product and work to improve stickiness. Sticky products are ones that customers return to again and again.

Product management software can be used to collect, measure, and analyze engagement. This can lead to improvements in customer satisfaction and retention. These tools can also enable product managers and their teams to collect new ideas and lay out specific plans to make the ideas into a finished product.

How to measure product engagement

When a company wants to look at the value a product has in the marketplace, it must first implement a system for collecting and measuring engagement. Then individuals can analyze data to quantify how customers are interacting with the product. Often, a Product Engagement Score (PES) metric is created from the following components:

1. Adoption: Which features do the majority of customers use the most? In other words, this is a measurement of the most popular features.  
2. Stickiness: How often are customers returning to the product? Stickiness is often presented as the percentage of users who come back every day or week.
3. Growth (or retention): How many customers have stayed over a period of time? Often the benchmark here is three months, but other time periods can be used. 

Once a company knows the scores for the above components, it can enter them into the PES formula: 

This metric can then be used to track product engagement over time as product features evolve.

Benefits of measuring product engagement

Measuring product engagement can help a company see what features a customer understands and uses and where products fall short. Tracking metrics related to engagement can lead to: 

• Improved sales and returns. When engagement is up, companies see more sales and improved returns on their bottom line. More revenue bolsters an organization’s health and contributes to future growth.
• Increased user satisfaction. Elevated product engagement typically correlates to more user satisfaction. Happier customers are more likely to provide word-of-mouth advertising for a company. 
• Increased customer retention. The more a customer engages with a product, the more likely he or she will continue to subscribe to that solution or service in the long run. This leads to improved brand loyalty and decreased risk of churn.

Basic elements of product engagement

When analyzing product engagement, individuals should keep three essential elements in mind. These elements are also the foundation of the Product Engagement Score:

• Breadth: Breadth is how much of the product that customers interact with. This is a measure of the percentage of features with an 80% or higher click rate.
• Depth: Depth involves how far customers dive into certain product features, which is often a driving force of retention.
• Frequency: Frequency is the measure of how often customers return to a product. Typically this is measured by the percentage of users returning daily. 

Product engagement best practices

To improve product engagement, organizations should consider adopting a number of best practices. By adopting the following strategies, an organization can improve a customer’s experiences and interactions with a product:

• Make products easy to use. Customers must frequently learn how to use new technology. If a solution is easy to use, customers are more likely to engage with it. Look for ways to simplify the user experience, such as dropping unpopular features.
• Onboard and educate customers. Sometimes customers avoid using certain features because they seem confusing or intimidating. Teach customers from the onset how to optimize product usage by offering customer training.
• Continue to modify products. Customers in today’s marketplace expect their products to adapt to their ever-changing needs. Collect and analyze customer feedback, and then apply it by adding new features or strengthening existing ones.
• Improve product marketing strategies. Sometimes users aren’t aware of the full extent of features. Consider amping up marketing efforts, such as including in-app tooltips. 
• Write clear and compelling copy. Confusing copy within an app or software can be off-putting to customers and drive them to use the solution less frequently, or not at all. Strive for focused word choice with an engaging tone. 
• Provide outstanding customer support. When something doesn’t work properly, users want an easy way to reach out to the company for support. Find ways to respond promptly and positively. This will improve customer satisfaction and encourage users to return to the product promptly.