What to Measure: Customer Engagement or Customer Satisfaction?

Many business owners and marketing experts make a common mistake not to differentiate between customer satisfaction and customer engagement.

Although customer engagement and customer satisfaction are often intertwined, they do measure different things and should not be used to for one and the same purpose when drafting a an analysis of your customer base.

Moreover, these indicators are measured in different stages of service lifecycle and can provide misleading results if you assess them during an improper phase.

You must clearly differentiate between customer engagement and customer satisfaction in order to get the best possible results from both of these indicators.

For instance, it might be wrong to measure user engagement at the early stages of customer onboarding, since a customer might be engaged in exploring your product but still not be satisfied with the features available or the produced service outcome. For its part, an existing customer might be quite satisfied by the product or the service but not to be engaged in exploring the product and seeking new features or improvements.

In this article, we provide you with an overview and analysis of some best practices that will allow you to take advantage of both customer engagement and customer satisfaction assessment.

Customer Engagement Measures How Customers Respond To Your Offer

User or customer engagement is a tool and indicator that represents more of an objective that can be measured by indicators and is usually used to assess how your existing and prospect customers respond to your product or service offering.

This indicator does not measure customer satisfaction, which can be measured more accurately after a purchase is made or a customer starts using a service. Nevertheless, you can use customer engagement as an indication of future intentions of your customers, which in turn is related to customer satisfaction.

Customer engagement is useful in measuring your product value proposition and how it influences conversion rates among prospective customers.

In fact, customer engagement is directly related to conversion rates since engagement is more likely to occur at the early stages of the customer onboarding, when a customer is yet to purchase your service, while customer satisfaction can be better measured after the service has been used for a longer period.

Actually, what you measure by applying the user engagement metrics is the user response to your offering and available features.

You can both observe the user behaviors or try to engage your clients in taking specific actions in order to assess their level of engagement. For instance, if you introduce additional services around your core services, which is common for most SaaS services, then you can measure how many clicks requesting more info these additional services are getting from users of your main service.

Customer Satisfaction Requires Active Feedback

Overall, user satisfaction is an indicator that you should use to evaluate how your customers rate your service against their expectations.

Ideal experience is what you try to achieve building your web service, but the customer experience is rarely an ideal one, so try to measure how your customers perceive your service compared to their initial expectations.

For instance, you might be developing a Kanban-style project management tool in the cloud and might have incorporated features you think are useful e.g. right-click functions. However, your customer might expect drag-and-drop functionality, not right-button mouse clicks; therefore, you should measure not only the overall customer satisfaction but also their experience compared to their expectations.

Your sales indicators are in relation with the customer satisfaction levels you achieve as well. If your customers lack intention to make repeat purchases, then it is very likely that they are not satisfied with your service.

Another important indicator of good customer satisfaction is the likelihood your clients to recommend your service to a friend or colleague.

That said, customer satisfaction is a multifaceted indicator that cannot be measured using only one method or one-sidedly. Moreover, satisfaction among your customers is changing over time, so you must constantly study your customers to have an idea how your service is performing in terms of user satisfaction.

Engagement and Satisfaction Are Assessed In Different Ways

You cannot measure customer engagement and satisfaction in the same way or using the same methods.

For instance, you can track specific hot areas of your service website to assess the level of engagement of your users. If you have introduced a new feature or tweaked existing features and there is a lot of interest, then you probably enjoy an acceptable level of customer engagement. This does not mean your customers are satisfied, though. This is an indication that there is interest in these new features and prospect customers could be converted into buyers.

For its part, customer satisfaction requires a more direct response by your customers, prospect and existing ones alike. You need direct interaction to gauge customer satisfaction, using tools like online surveys, direct emails asking for feedback, online polls, and any other method to obtain reasonable personal feedback (read our guide : 5 ways to get qualitative feedback from your users). On the other hand, the response rate to your feedback queries is another aspect of customer engagement, showing the level of interest in your customers to improve or tweak the service. Actually, a low response rate could indicate poorly designed online survey form that does not inspire your customers to provide feedback.

You Should Measure Both Indicators But Independently

You should measure both indicators, also known as KPIs (Key Performance Indicators) but at different stages of customer relationships and using different methods.

Any online service provider should take advantage of assessing both customer engagement and satisfaction in order to improve its service, making it more user friendly and more appealing to both new and existing customers.

These two indicators provide valuable information how to improve the service, the interface, and any other service component in order to get higher conversion rates.

Nonetheless, you should measure customer engagement at the early stages of customer onboarding and when you introduce new features and services, while customer satisfaction should be assessed at any stage of the sales funnel and throughout the entire process of service development and maintenance. It is a bit tricky when to measure engagement and when to measure satisfaction, but you should bear in mind that engagement is easier to track since customer satisfaction requires active feedback.

Use a combination of both KPIs to gain knowledge about which service proposals and features provoke strongest interest among your users, then make every effort to obtain feedback on these particular features or about the service as a whole.

This way, you can collect complex information on how to improve your service and boost conversions by utilizing both customer engagement and user satisfaction indicators.