After looking at the latest trends in the SaaS industry, we’ve discovered that user engagement is the new marketing. What does successful user engagement look like nowadays? 

At first glance, this may seem like an easy transition, but users’ needs have become increasingly demanding as industries become more and more competitive. Nowadays, customers demand more personalized services, proactive support, and satisfying customer experiences. In other words, it’s not enough for customers to simply enjoy your products or services: they’re asking for more.

Because of the SaaS industry’s competitive landscape, engaging your customers is make or break. Plus, it can lead your company to a more effective product-led growth model. But how exactly can SaaS companies increase their engaged user base? What are some best practices that you can easily implement today? Let’s dive in!

Let’s explore everything you need to know about user engagement in the current market, from the basics to the current best practices: 

  • What is user engagement
  • How to measure user engagement
  • Tips for achieving better user engagement
  • Tools to use to increase user engagement
  • Engaged users are the key to SaaS success

What is User Engagement?

Broadly speaking, user engagement is any interaction your users have with your product or service. It can be as simple as logging in, downloading a specific feature, or sharing information about your product with others. It measures if your audience values your product or service. 

More user interactions = more company value.  According to Neil Patel’s blog post, Paul Schmidt says, “Once people start using your product, SaaS companies need to focus on making that product as sticky as possible. Your customers need to be using it in their day-to-day workflows.” We 100% agree. 

User engagement is important because highly engaged users are likelier to try, buy, or voice their opinion about your product. So product and marketing teams should focus on executing accurate product analytics to identify the factors that lead to higher user engagement. The most common way companies measure engagement is by tracking their users’ clicks, downloads, and shares.

The typical behavior of an engaged user is one who: 

  • Spends time with your product or service
  • Shares information about your company with others
  • Recommends your products to others
  • Highly values your product/service

More engaged users can generate more profits and are surer to be active and provide feedback to help you improve the overall experience. Analyzing your user engagement can provide benefits such as: 

  • Improving your customer loyalty
  • Giving you the data to redefine your marketing and sales strategies
  • Improving your products based on user feedback
  • Providing a better product experience
  • Prioritizing sales efforts 

How to measure User Engagement

To measure the user engagement of your SaaS company, you need to use different metrics. The most common ones are: 

  1. Engagement rate

Engagement rate is one of the easiest metrics to measure how active your users are within your website or application. Here’s a super easy way to calculate the engagement rates of your users:

(Number of active users in a time period / the number of total users = engagement rate)

  1. Conversion rate

A conversion rate is when a customer completes an action, buys your product, or uses your service. With SaaS, it’s usually when a customer subscribes to your service and starts using your software on their daily tasks or the percentage of trial users who become paying customers. You can calculate it by following the formula below:

(Conversion Rate = Total attributed conversions / number of visitors) x 100                     

  1. Bounce rate

Bounce rate is the percentage of users that leave your website after visiting only 1 page. That means your website isn’t engaging or converting (to put it bluntly). When a bounce rate is high, focus on developing a better website or app according to the user’s needs or customer’s feedback. Here is the formula to calculate the bounce rate: 

(Bounce Rate = Total visitors to the webpage that leave without interactions) x 100

  1. Retention rate

Retention rate refers to the number of customers who choose to stay with your company because of your services, customer service, or many other factors. You’ve likely heard of the retention rate because it’s the crux for many SaaS companies–especially when acquiring new customers is more expensive than maintaining existing ones. If you’re looking for how to calculate your retention rate,  here is the correct formula:

(Number of active customers across a period/ Total number of active customers in the previous period of time) x 100 

Are you interested in how to achieve better customer retention? Check our blog post and discover if your team is focusing enough on it. Got room to improve? FROGED offers a specific retention feature to ensure customers stay engaged and upgrade their subscription to your product. 

  1. Churn rate

SaaS churn is the percentage of customers who cancel a recurring software-as-a-service subscription within a defined period. As SaaS companies depend on recurring revenue, churn rate is one of the key SaaS metrics and a vital barometer for a company’s continual growth or decline. If you’re interested in learning more about churn rate, check out our churn rate blog posts. To o calculate it, use the following formula: 

(Lost customers / Total customers at the start of a time period) x 100

With all of the above formulas, you’ll have a pretty accurate understanding of how your users engage with your product. Also, you can create strategies to improve your product and level up your company through all that information. There are some key areas of your product that you should focus on when applying these strategies. Let’s take a look at those best practices now! 

Tips on achieving better User Engagement

Companies should focus on user engagement for a better conversion rate, increased profits, and improved metrics. Here is a list of effective ways to increase user engagement for your business:

Focus on product experiences

When SaaS companies put their efforts into developing innovative product experiences, they gain user engagement. Think about it. If everyone has similar software products, value-added product experiences stand out the most in a competitive environment. If your users have positive product experiences, they’ll feel more attached to your company. Some examples of innovative product experiences include creative product onboarding, proactive customer support, or gamification of different features

Personalize communication channels

Personalizing communication with customers is a sure way to show how much you appreciate them. For example, remembering the customer’s name and information in every message, marketing campaign, chatbot encounter, or personalizing their features and onboarding experience. According to Slideshare, 80% of consumers are likelier to buy from a company that provides a personalized experience. Now you can’t argue with that! 

Implement an omnichannel approach

Many SaaS companies have recently begun implementing the omnichannel approach to customer support. For those who haven’t heard about it, the omnichannel approach delivers a consistent brand experience requiring streamlining all customer interactions across multiple touchpoints. It’s a combination of technology and customer experience, and it leads to empowering customers to interact with a company through any channel. A good example is when a company offers video chat support but has already looked at your profile and studied when and why you use the product, and, as a result, it can provide better informative support.

Include live chat support

Did you know that 79% of users prefer live chat support for its instant responses? Companies that offer live chat support differentiate themselves from those that don’t. This type of customer service is one of the best ways to increase user engagement because it provides quick answers to customers’ questions. Having some sort of live support goes a long way, so consider aspects like providing a more human experience with video live chat support, collecting customer feedback after a live chat session, and integrating different options to your live chat, such as sharing screenshots or screen recordings.

The strategies above can increase engagement with your users and help you retain your customer base more effectively. Although it may sound like a lot of work, there are actually tons of tools out there that can make these strategies easy as pie. Let’s discover these different tools to help increase user engagement. 

Tools to use to increase User Engagement

There is a tool that provides all the features you need for user engagement in one – Product Success Platforms (PSP). PSPs offer a variety of features that can guide you to implement all the strategies we’ve listed above. Let’s get to know them! 

  • Product Flows: product flows help you guide your customer when using your product. They’re designed to be interactive and proactive based on how your customer interacts within your platform. 
  • Integrations: Using different integrations, you can handle user onboarding, self-serve customer support, and the engagement needs of your customers. Some of the most popular integrations are WhatsApp, Slack, Zapier, Segment, Jira, Twilio, Google Meet, and Facebook. 
  • Knowledge base: A Knowledge Base feature stores information about your product or service. Users can find all help articles and explanations about the product through it. 

In fact, FROGED is a PSP that contains all of the above features and more to achieve product success. Discover FROGED’s product flows, knowledge base, and 2k+ integrations for customer engagement here.

Engaged users are the key to SaaS success

Marketing today is all about engaging users. When user engagement is successful, your customers share information about our company, purchase your products, and trust your services. However, in today’s market, customers’ needs are changing, as you probably noticed. 

Especially in the SaaS industry, where many competitors offer similar software services, engaging your customers is the only way to build a strong customer base for your business. Our top strategies to level up user engagement are: focusing on product experiences, including live chat support in multiple ways, implementing an omnichannel approach, and personalized customer communications. 

Not sure where to start? Book a demo to learn more about how FROGED can help increase user engagement and retention.

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