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Amplitude and HBR Analytic Services shows ‘engagement’ outweighs NPS as a digital metric

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Amplitude and HBR Analytic Services shows ‘engagement’ outweighs NPS as a digital metric

A year or so ago, “engagement” meant web site visits, e-mail open rates and social media shares.

It’s not that customer experience (CX) leaders wouldn’t have cared about that kind of activity, but it represented only part of what was happening across a brand. It was one of several possible tips of the iceberg.

Today, engagement makes up most of the iceberg — including the parts that are still underwater.

According to a study jointly conducted by Harvard Business Review Analytic Services and San Francisco-based product intelligence software vendor Amplitude, engagement now tops the list of areas considered key to long-term success in offering a digital experience.

The two firms surveyed about 300 business leaders for its report, Making The Leap To A Digital-First Enterprise, an advanced copy of which was provided to 360 Magazine.

Fifty-eight per cent of respondents put engagement ahead of metrics you might expect. Net Promoter Score (NPS)? Only 16 per cent saw it as a critical measure. Customer referrals? A measly seven per cent.

Instead, engagement was followed closely by retention rate and lifetime value (LTV) at 36 per cent. Here’s how the report’s authors explained it:

This shift is caused by forces that have fundamentally changed business models, including subscription consumer products and enterprise software, streaming media and connected devices, and freemium models with in-product monetization. (upgrades, in-app purchases, and ads).

“Engagement,” in other words, is no longer isolated to the way customers respond to the overtures made by marketing, or the initial stages of the journey.

Instead, engagement is now an umbrella that covers a large part of the actual experience, whether that’s buying something or using a product or service.

Engagement also matters more now because it’s where people like the CX team can look for signs to improve the experience, the study noted.

“This data is used to understand customer preferences, prioritize digital investments, and personalize user experiences,” the authors wrote. “Retaining engaged customers becomes a flywheel for monetizing digital products.”

This study is obviously more focused on the kinds of companies where digital-first or even digital-only business models are here to stay. The real question will be how CX leaders will study this digital behavioural data to inform the way they continue to (or reintroduce) physical experiences.

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In a virtual summit hosted by Zendesk last week, CNN host and author Fareed Zakaria noted that brands need to figure out how to not only “outperform on digital media but provide the quality of customer experience you were providing when you were engaging physically as well.”

This will vary from one firm to another, Zakaria admitted, but it will likely be the emotional component that in-person experiences often emphasize.

“In the future, the physical experience may become prized because it will be more rare,” he mused.

Prior to COVID-19, though, I don’t think many brands quantified or tracked “engagement” in a physical environment. They might have looked at how many people entered the store, but not how many items they picked up and then put back again, or how many walked out empty-handed.

Digital engagement is inherently easier (though not always easy) to measure. But a longer-term priority will be figuring out what kind of needs and wants are true both online and off.

“Our users’ expectations of physical experiences have never been higher,” 81 per cent of those in the survey said. Perhaps. But I bet their hopes for more opportunity to engage physically again are even higher still.

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