Online Customer Engagement: Methods and Calculations

Every business owner knows customer engagement is important to their enterprise. It helps establish a customer base, and improve and expand their brand. But how do you improve customer engagement? There are several steps and options involved. You need to know how to measure customer engagement before you can improve it. Here are some of the most important metrics to help you analyze online customer engagement.

Guest checkout rates

Customers who created an account tend to be more likely to return to your site and make another purchase, so knowing how many people buy from your site as guests could give you an insight on that probability. Guest checkout rates are measured by dividing the number of orders completed by guests over the total number of orders.

Purchase frequency (PF)

To help you understand how engaged your customers are, you must know how often they purchase from you and the length of time between each purchase. This is calculated by dividing the number of orders in the last year (365 days) over the number of unique customers over the same period.

Repeat purchase rate (RPR)

You can tell how many customers were engaged enough to make several purchases at your store by measuring your RPR. It is measured by dividing the number of customers who purchased from your store more than once over the total number of customers.

Average order value (AOV). The AOV tells you how much money your average customer spends per purchase. Generally, repeat customers spend around seven times more than those who make one-time purchases. For this, you have to divide your total revenue over the last year (365 days) over the total number of orders placed in that period.

Offering promotional stuff to your customers is a tested way to maintain customer engagement. You can offer them free gift cards or items on their first purchase, if they buy from you within a certain period of time, or when they have completed several purchases. Many businesses (such as Stokes Badges, The Pin Factory, and the Neon Republic) offer customized products that you can give away to select customers. Take note that the best custom promo items maybe those that your customers could regularly use.

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Customers generally do not want to feel like they are missing out on something. An effective way to take advantage of this, while adding value to every engagement they have with your brand, is to have a loyalty program. It creates a bond between you and your customers and motivates more frequent buying while discouraging shifting to your competitors.

You can reward their loyalty by awarding them points for each purchase or for each time they refer someone to buy from your shop. You could also keep them engaged by keeping them connected with you on social media and offering exclusive rewards.

Two-thirds of the profits of any brand may rely on how effectively they engage their customers. However, it is not only about increasing profits. Better customer engagement could also improve brand loyalty and have positive effects on your brand image.