Many marketing professionals believe that driving deeper engagement across the ecosystems –customers, channel partners, direct sales and employees- is the key to achieving and even accelerating customer acquisition and retention.
The point of view has established engagement as a key marketing performance indicator.
However, measuring engagement is difficult for several reasons. First, there isn't a standard definition of engagement. Second, there is the potential for a slew of metrics for measuring it. Some marketers define engagement as simply a prospective customer's response to a call to action. Others believe engagement must include an element of advocacy. So the first question to answer is, "How will define and measure engagement?"
We recommend using behavioral metrics for measuring engagement because it is typically easier to capture and track behavioral measurements. The research suggests that meaningful changes in behaviors are indicators of changes in engagement. But not all types of behaviors are profitable.
For example, someone browsing your store to do price checking or product specification research but then purchasing the product elsewhere is not profitable for your company. It is also possible that there comes a point in time when you've optimized engagement as much as possible and additional investment to increase engagement will not improve the return. So the second question is to answer is, "Which behaviors are linked to profitability?"
It's probably not realistic to have just one behavioral measure as the basis of your engagement metric. Too many attributes affect engagement. This means you need to be able to identify all the behaviors that are indicative of engagement and then determine which ones or combination affect profitability.
For example, tracking how many times a person comes to your site and downloads something may indicate engagement. But what if this person never makes a purchase? So while you may have created engagement you have not created consumption and the investment associated with creating engagement is not profitable.
In fact, you may want to consider whether this is a behavior you want to continue to encourage with people sharing the characteristics of this person. The same is true for channel partners who may sell a tremendous amount of one of your products. They are engaged. But what if they make these sales at the expense of up-selling higher margin products or services? This is why it is important to selecting the behaviors that reflect engagement that have the greatest impact on profitability.
Even though there are challenges associated with defining and measuring engagement, our discipline has concluded that engagement is a critical measure. The bottom line - deploy these three steps if you want to use engagement as a metric.
1.Identify behaviorally based metrics associated with engagement
2.Consider the impact of each behavior on profitability (if possible create a model)
3.Select two-three behavioral measures to create your engagement metric
Laura Patterson is president and co-founder of VisionEdge Marketing, Inc., a recognized leader in enabling organizations to leverage data and analytics to facilitate marketing accountability. Laura's newest book, Marketing Metrics in Action: Creating a Performance-Driven Marketing Organization (Racom: www.racombooks.com ), is a useful primer for improving marketing measurement and performance.
www.visionedgemarketing.com
Disclaimer: Any VEM information or reference to VEM that is to be used in advertising, press releases or promotional materials requires prior written approval from VEM. For permission requests, contact VEM at 512-681-8800 or info@visionedgemarketing.com. Translation and/or localization of this document requires an additional license from VEM. Note: All content within this website is property of VisionEdge Marketing. Any use of materials, including reproduction, modification, distribution or republication, without the prior written consent of VisionEdge Marketing is strictly prohibited. Reprinted with permission. 
