What is Customer Engagement?

What is Customer Engagement?

Customer engagement is the key to sustaining growth for SaaS companies. SaaS businesses must aim to educate and entertain their users to boost satisfaction and retention. You want customers to feel compelled to login to your platform in the morning, during lunchtime, and even before bedtime. You want the stickiness factor. Not only does this help boost user satisfaction, but it can also help your company improve customer retention.

More and more SaaS companies are recognizing the amazing value that product-led growth provides. As a result, user engagement tools have become increasingly important. The goal of a SaaS CEO should be to increase the profit they make from each customer (LTV), and lower the costs in sales and marketing that it takes to acquire each customer (CAC). Measuring Customer Engagement is a key tool that will help you achieve that goal, as it will allow you to increase your trial conversion rates, which directly reduces CAC. And it will help you lower your churn rates, which directly increases LTV.

What is Customer Engagement?

Customer engagement is all about interactions between your customer and your brand. As a result, the interactions that you qualify as an engagement will be just as unique as your business. When you let your customers choose how they’d like to engage with you, you’ll be more likely to uncover the type of interactions that they find valuable. By making it easier for customers to engage in ways they find valuable, you’ll strengthen their emotional investment in your brand.

What is customer engagement?
What is customer engagement?

Some customers will have a deeper level of engagement than others. For example, a new shopper might engage by following your brand on social media and placing an order, but this level of engagement is very different than someone who’s placed 10 orders in the last year and also referred their friends. Finding ways to add value to your customer experience can help you drive more valuable engagements more often. When customers feel like they have just as much to gain from engaging with your brand as you do, you’ll foster a sense of reciprocity that keeps them emotionally connected to your brand.

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Why is Customer Engagement Important?

The digital marketplace offers customers a greater range of options than they’ve previously experienced. Now, the majority of value is gathered over time through a continuing cycle of commitment and re-commitment. To maintain a customer’s interest, enterprises need to be responsive to change, alert to a customer’s day-to-day needs, and in frequent contact. Customer engagement helps to continually demonstrate your commitment to the customer and allows you to deliver value in every phase of the customer journey.
The importance of great customer engagement can’t be emphasized enough, as it builds and fosters:

  • Trust
  • Commitment to excellent service
  • Better communication
  • Healthy customer relationships
  • Valuable customer knowledge
  • Customer loyalty

Customer engagement is the proof you provide to your customers that you value their success and are always working to deliver more. Remember, friendships endure while acquaintances come and go. With the right engagement strategy, you can foster long-term, mutually beneficial relationships with all your customers.

How to measure Customer Engagement?

You can’t improve customer engagement if you don’t know how to measure it. There are a number of different ways you can calculate engagement, which is why we’re giving you a head start by highlighting the most important metrics to start with. Measuring customer engagement requires that you do the following:

  • Identify the key events that you would like to track.
  • Track the number of customers who complete a purchase without making an account
  • Assign engagement scores to each action in a way that can be changed as your company evolves
  • Keep an eye on how often your customers make a purchase
  • Find the average amount a customer spends when they make a purchase
  • Create a database to store this information, ideally in a form that allows for fast querying, and easy cube-style, cross tabulated analyses.
  • Connect this database with other data sources that contain additional customer attributes that are relevant for understanding segmentation
  • Compute an engagement score for each user that can be used by sales and support.
  • Customer Engagement Score = (w1*n1) + (w2 * n2) + … + (w# + n#) where w is the weight given to a random event and n is the number of times the event occurred.

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Some Promising Customer Engagement Strategies

Send Triggered Messaging

Communication plays an integral role in customer relationships. You’re already emailing customers welcome messages, product updates, and the occasional thank you note. Real-time triggered emails get good results because they respond to subscriber actions and are relevant to them, so they benefit from current high engagement. Whereas routine marketing emails can be more like interruptions and are sometimes rejected as irrelevant.

Let’s imagine that new users who don’t take a significant action on your platform within 2 days of signing up are more likely to churn. You can set up a triggered message to nudge these users to login to their accounts. Below is a triggered message from Buffer. Their system automatically emailed when social media post surpassed a specific audience reach.

Triggered messaging
Triggered messaging

While routine marketing emails may seem interruptive because they may be irrelevant, triggered email messages tend to have a more positive impact on customers. Since the messages are triggered by specific actions that the customer did or did not take, these messages are more relevant and thus, more beneficial to the customer and more likely to promote engagement.

Award points when a customer makes a purchase

Showing your customers that you appreciate their investment in your brand can be as simple as awarding them points each time they place an order. Polaroid Originals adds value to every order their customers place, making each of them more likely to return to make another order in the future.

Award points for a purchase
Award points for a purchase

By showing their customers they have just as much to gain from each purchase as they do, they’ve fostered feelings of reciprocity that will give them every reason to order from you again.

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Engage customers through the in-app chat feature.

After working in SaaS marketing for years, it can be easy to forget how challenging it can be for a new user to navigate your company’s platform. Many customers may not be familiar with SaaS technology and may have a hard time successfully using the platform or getting the most out of its features. This frustration can often cause users to give up or move on to another SaaS product they may believe is easier to use. In addition to sending triggered messages with helpful tips, tutorials, and advice, you can also engage these users through in-app messaging to help provide ongoing assistance.

In-app chat feature
In-app chat feature

Simply establishing the fact that you are available makes your customers feel better. It makes them not just view the product as some pixels on the screen, but as an extension of the people behind its creation: you. In-app messaging is effective because it allows you to speak with your customers one-on-one, helping them solve their greatest challenges. In addition to providing direct assistance to customers, you can also use the chat feature to find out which features new users are finding most difficult or asking specific questions about their experience. You can then use the information that you gather through these conversations to create interesting and relevant content that is helpful for users who are having similar issues.

Encourage your best customers to share your brand with referrals

RUNGUM Give 5 Get 5 Explainer Page
RUNGUM Give 5 Get 5 Explainer Page

Driving engagement also doesn’t have to be solely between your customers and your brand, it can also be between customers. Empowering your best customers to easily share your brand with their friends and family can not only help you acquire a new one, but also engage the customers you have. RunGum’s Give $5 get $5 simultaneously adds value to the friend that’s been referred to their brand and the customer that referred their friend. It’s this value that will make both customers more likely to re-engage again in the future.

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Develop educational tutorial videos.

Continuing education is a vital part of SaaS customer engagement. In addition to free trainings and webinars, you can also create video tutorials as part of your SaaS marketing strategy. While you will still want to provide the typical educational assets such as blogs, e-books, and guides, you can also use video tutorials to engage your audience. Videos are stimulating and allow you to clearly and simply communicate your message to users faster than you can in text. Videos are also easier to consume on mobile devices, allowing users to quickly and conveniently access your training videos on demand.
Basecamp, a project management company came up with a series of tutorial videos to educate prospects.

Educational tutorial and videos
Educational tutorial and videos

If you want to produce video tutorials that are engaging, you need to think about what your customers most want to learn about your software. Consider what your customers greatest challenges typically are when they start to use the platform. Also, think about which features your customers will find most useful and create content around these topics. In addition to the topics that you choose for your video tutorials, it’s also important to consider how you plan to structure the content. To keep users interested, use storytelling methods that will help draw them in and make your content interesting and helpful.


Customers are the lifeblood of your business. To retain your users, experiment with different engagement strategies to improve retention. In the end, it’s important to remember that engagement = retention. If people aren’t using your platform, it could be because they are not engaged.

It’s essential that SaaS marketers try out different user engagement strategies to find the most effective tactics for improving customer retention. You can use the SaaS marketing strategies above as a starting point for experimentation. Choose one or two of the strategies above and watch as your engagement rates steadily improve over time. Also, please let us know if this article helps you in any way.

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