How to Measure User Engagement For a Real Impact on Growth

north star metric Mar 30, 2019

Time on Site is Not User Engagement

Whenever a visitor enters your website, it is tempting to want them to stick around, spending time clicking around on the site. The intuitive thought behind this goal involves a few assumptions:

  • "Time spent on site means they want to buy."
  • "Time spent on site means they find my site useful and interesting."
  • "Time spent on site is building their loyalty to my brand."

While there are certainly times when each of these scripts is true, there are also a lot of other reasons why people spend more-than-average time on your site: they are researching information that to comparison shop, or they cannot find what they are looking for quickly, or they are still unsure, even after many clicks, of the core value of your product or service. These possibilities are also not always true (thankfully!), but they showcase the fact that time spent on your website doesn't necessarily track the user engagement. You can certainly showcase your excellent time on site stats, but there is a decent chance that these stats won't translate to the growth that you and your company crave.

The Value of User Engagement: Building a Growth Strategy

Even with initial success, it is important to understand what each click or purchase means to your company: user engagement encompasses not only how often they click and how long they stay on site, but also the paths they take through the site, how frequently they abandon shopping carts and at what stage, as well as any other metrics of feedback: surveys, review sites, and engagement with sales and customer service.

This more all-encompassing set of data must be analyzed in a far more complex way, but when you do, you get a better image of what your true value proposition is; many companies may think, for instance, that their product is unique, but when a competitor comes on the field, they discover another way to offer superior value: their customer reps are the friendliest, their shipping is the fastest, or their website is the easiest to navigate.

To make a growth strategy, you have to know what makes your customers do at least three things:

  • What makes them first enter your funnel and encounter your brand? What problem do they need solved?
  • What one feature in the marketing process really solidifies the purchase for them? Hila Qu of Growth Hackers calls this the "magic moment," and it is possible to isolate what it is for a wide swath of your customers by using a variety of user-engagement stats.
  • What long-term product satisfaction aspects make them loyal to the brand, willing to be repeat customers, or willing to share about you with others? This is a higher bar, and it must come from a combination of product excellence and continued customer service/sales strength.

At each of these stages, you can factor in the many site analytics that you've gathered, but they will be easier to interpret if you also combine them with direct feedback, analysis of reviews, and information on when in the purchase process people tend to abandon their carts. One of the first things you can do is figure out what isn't working; when you do this, you take some of the cloudiness out of the data.

Measure Time From Problem to Problem-Solved

Rather than trying to keep people on your site, most usability testing these days shows that the best companies solve customer problems very quickly. As much as possible, you want people to click onto your site, see a link that meets their needs, and immediately be able to participate in your site and service. A great example is OpenTable: their user interface could easily work to keep users evaluating restaurants and options for longer, if that was the metric that mattered to them. Instead, it attempts to find them the perfect place to eat and get them signed up for a reservation as fast as possible, even if that means they then immediately navigate away from the site. OpenTable understands that the quality of user engagement and the satisfaction from user engagement matter much more than how long the person remained on the site.

What Key Actions Should Visitors Perform?

Reviewing user engagement statistics.

You can translate this example into your own product or service online. To understand how to begin your growth strategy, you need to know what problems people are trying to solve on your site and what features of the site can help them get to it as quickly as possible. Another way to think of problems and the way the customer wants to solve them is in terms of JTBD: Jobs to Be Done. If, for instance, the goal of your customer is to get places quickly, easily, without prior planning, and without owning a car, Uber or Lyft can provide the service that helps the person become that mobile, spontaneous, and thrifty person. When you frame your own role as a company, consider how your product or service is part of the process of self-improvement or change for an individual and how you can make the purchase simply the next step in the job they are attempting to complete.

In order to be the vehicle through which they accomplish this job, however, you need to create clear, easy-to-accomplish key actions that fit into their lives. This means that, for instance, Lyft and Uber would be shooting themselves in the foot if they used browser-based rideshare requests, since part of the job to be solved is to be able to call for a ride via a mobile device while on the go. You want finding your company, understanding the value of the company, and purchasing/participating to be easy. Adding many extra key actions, or asking your leads to do many different things while in the sales funnel, risks alienating them or stymieing them on their journey to complete their job. They rarely stick it out, in a world with lots of competition, if they are repeatedly thwarted.

How Can You Measure Engagement for Growth? Find a North Star Metric

As you experience growth in your company, it can be tempting to go straight to the bottom line and see revenue as the indicator of whether you are on your way up or on your way down. After all, dollars are definitely a measure of engagement with your brand! However, the best businesses are interested in anticipating growth: they want to know that they are on their way toward even greater earnings, and revenue is a snapshot, not a trajectory, no matter how much you've grown in the past few quarters.

Excellent companies, according to Hila Qu, determine an indicator that will showcase not only their current successes but also the potential for long-term growth. A good example would be if your company presented near-stagnant revenue numbers between quarters, but showcased growing engagement numbers with, for instance, your e-newsletter, or better social media buzz for an upcoming product launch than for past product launches. Comparative values can showcase that you are on the cusp of a breakthrough. Finding the indicator for your company is what Qu calls a "North Star Metric," the one quantifiable measure that is most deeply connected to the mission and value of your product and its perception by your customers.

An online or mobile subscription-based video game can track revenue, but their active users each day is a better predictor of their long-term success; if there are more active users, it indicates a resurgence in interest, whereas fewer active users may foreshadow a wave of subscription cancellations. Qu uses the example of AirBnB: certainly, one element of the business plan is to get great fees from every sale, but in terms of potential for growth, the number of nights booked is a better predictor of long-term sustainable growth.

While we've mostly steered away from time on app or time on site as a metric, there are definitely business models where this is the important measure! Content sites and publications, especially those relying on advertisements, must be able to demonstrate that there are many eyes on their site for sustained amounts of time in order to create healthy ad revenue streams. The problem is when time on the site doesn't lead clearly to your company's growth; only you can evaluate whether the time spent with your website is truly an indicator or could mean something else.

The Takeaway: Commit to the Growth Strategy Process

Ultimately, user engagement isn't a formula someone else can write for you: it is a formula you write for yourselves based on your unique market, industry, value, and goals. Take some time to carefully consider the following:

  • Are our current metrics, like time spent on site, potential indicators for something other than how we are using them?
  • Is there another analytic measure by which we could more accurately forecast growth, even if it results in more modest projections in the short-term?
  • How can we as a company incentivize accurate measurements of user engagement over convenient measures that make us look good?
  • Where are we already getting great feedback from our satisfied customers? Where can we connect them more quickly with what they need to complete the "job" or solve their problem?

Once you've honestly answered these questions, finding a North Star metric, identifying and simplifying your key actions, and building your long-term growth strategy are your best next steps. These take more work than pulling up website analytics, but they also lead to long-term, sustainable growth for your company.