Product engagement – what is it and why does it matter? In this complete guide to product engagement, we’ll answer those questions and more.
- What product engagement means
- Why businesses should care
- Engagement vs. experience
- The ROI of product engagement
- How to measure product engagement
- Best practices, tips, and tactics for improving engagement
Among other things.
Let’s start with a few basic concepts that can set the stage.
Product Engagement 101: Key Concepts
First and foremost, we’ll define product engagement.
Product Engagement: A Definition
Product engagement refers to how users – such as customers or software users – interact with a product.
Like other forms of engagement, product engagement can be considered part of the product experience.
Maximizing engagement, as we’ll see, improves key user metrics, such as productivity and value.
User Engagement vs. Product Engagement
Product engagement refers specifically to how a user engages with a product.
User engagement, a related concept, focuses more specifically on users’ engagement with products, services, apps, and so forth.
Similar ideas include:
- Customer engagement. How customers interact with a brand, service, or product, such as a mobile app or SaaS platform. Customer engagement plays a role in other important metrics, such as customer loyalty, satisfaction, and lifetime value.
- Employee engagement. How motivated and enthusiastic workers are when performing their daily work duties. Like customer engagement, employee engagement affects employee satisfaction, retention, and their overall value to an organization.
- User, customer, and employee experiences. The overall experience a person has with a product, a brand, an employer, and so forth. Engagement is often considered to be an important aspect of any of these experiences.
As we will see next, all of these concepts are interrelated … and they are all important for businesses engaged in product development or implementation.
Product Experience vs. User Experience
All forms of engagement, such as those mentioned above, are directly connected to the experience of a product or service.
Commonly used terms include:
- The product experience – How users interact with and are affected by products
- The user experience – A person’s feelings, attitudes, and interactions with a product or service
- The customer experience – Like the user experience, it refers to how people interact with and feel about a product or service, but focuses specifically on the customers of a business
- The employee experience – Employees’ full range of interactions with their employer, throughout the employee life cycle
Typically, engagement is viewed as a component of the total experience.
User engagement, for instance, is only one aspect of the user experience – but a very important one.
Some view the product experience and product engagement as facets of the product adoption process.
Product adoption refers to the process where users purchase, learn, and use a product, such as a software application.
And, like the other concepts covered earlier, we can view adoption through several lenses:
- Product adoption – The process where people begin using a product or service, as mentioned
- User adoption – A term that tends to focus on employee adoption of a technology or service, though it is sometimes used interchangeably with product adoption
- Technology adoption – When users, a group, a business, or a society begins implementing new technology
- Digital adoption – Implementing and adopting new digital technologies, while using those technologies to their fullest extent
The nuances between these definitions may seem irrelevant.
And in some cases people may use the terms interchangeably.
However, it is worth understanding the differences, because each term has a specific meaning and can mean different things depending on the context.
Types of Users
In product adoption, there are typically a few types of users:
- Customers – Customers of a business, often a B2C product developer
- Clients – Clients can also be users, usually in a B2B context
- Employees – Employees who adopt products to use within their organization
Though the scenario differs for each type of user, product adoption and engagement are relevant in each case.
However, now that we have covered product engagement from a variety of angles, the question arises – why does it matter?
Product Engagement FAQ
Here are some frequently asked questions about product engagement and the product experience:
Why should my business care about product engagement?
Product engagement determines how much, how actively, and how enthusiastically people use a product.
As we will see later, this directly affects key user metrics, such as:
- User satisfaction and retention. How satisfied people are with a product and how long they continue to use that product or service.
- User proficiency and productivity. Overall skill levels with a product, and how productive users are with that product or service.
- Time-to-competency. How long it takes users to learn and utilize a product.
- Lifetime value. In the case of customers, product engagement correlates with the bottom-line profit that that person will bring in over his or her lifetime.
Ultimately, product engagement affects a product’s performance, utilization, and its value to the end user.
For product developers, this impacts how well the product is received and how well it performs in the marketplace.
For employers and employees, product engagement impacts user proficiency, productivity, and the overall returns on that product.
How do you measure product engagement?
Product engagement can be measured in a variety of ways, depending on the context.
Software or app developers, for instance, can use metrics such as:
- User churn and user retention. The rate that users abandon a product versus how long they stay with a product or service.
- User satisfaction. How happy, delighted, or satisfied people are with a product.
- Number of active users in a time period, such as monthly active users (MAUs). The number of users that actively engage with a platform and use it during a given time period.
- Cost of user acquisition. How much it costs on average to convert prospects and leads into customers, or users. Different stages in the adoption cycle, such as sales or onboarding, can impact user acquisition costs.
As well as more specific, in-app analytics that offer insight into how users interact with the product.
Enterprises that adopt a new product for use by employees may focus on metrics such as:
- Employee proficiency and productivity. The general skill level an employee has with a product and how effectively they use that product, respectively.
- Time-to-competency and time-to-productivity. How long it takes employees to achieve basic competency and productivity.
- Employee satisfaction and engagement. How happy employees are with a product and how actively they use a product.
Ultimately, the metrics used should be based on the situation and the goals of a particular adoption program.
What is the ROI of improving product engagement?
As we will see below, there are a number of benefits to improving product engagement.
A few of these include:
- Higher returns on the product itself. When the end users are more engaged, that engagement ultimately translates into greater bottom-line returns on the product itself.
- Improved user satisfaction. More engaged users are more satisfied. And more satisfied users, in turn, add more value through increased longevity, loyalty, and so forth.
- Improved product performance in the marketplace. Engagement is a key focus for many businesses, because it is often directly correlated to how well the product performs in the market.
To truly determine the ROI of improved product engagement, it is necessary to analyze current engagement rates.
This will help businesses gain deeper insight into engagement problems, as well as solutions.
With that insight, it is possible to more accurately calculate potential ROI.
How do you improve product engagement?
Below, we will cover ways to improve engagement in more detail.
But here are a few examples:
- Simplify the user experience. Today, people are overwhelmed by information. Software users, whether they are B2C customers or in-house employees, must constantly learn how to use new apps and tools. Simplifying this complexity is key to improving engagement.
- Design products that are usable. Usability is a design concept that focuses on making products as easy to use as possible. The most usable products are easy to learn, easy to remember, and easy to navigate. The less effort people have to make when learning and using a product, the greater their engagement.
- Develop products that have real utility. In other words, design products that help people solve their actual problems. This will ensure that the product is relevant and actually useful. One result: improved product engagement.
- Onboard and train efficiently. A user’s first impression of a product can mean the difference between abandonment and retention. Good onboarding streamlines the experience, shortens learning curves, and improves engagement rates.
As with metrics and goal-setting, the methods used to improve engagement will depend on the situation.
An organization should first examine engagement in detail, determine where the problems lie, then design solutions for those problems.
What are the challenges to product engagement?
Product engagement can run into many challenges, again depending on the situation.
Here are a few challenges that product developers face:
- Keeping users interested and motivated during onboarding. Software developers face a dizzying array of competition and noise. As mentioned, onboarding is a crucial phase of the adoption process that can make a big difference in engagement, retention, and other important metrics.
- Keeping users engaged over the long term. Many things affect long-term user engagement, as we will see below. These factors can range from product design to customer service, among many other things.
- Keeping the user experience simple and straightforward. The complexity of the digital world makes it difficult to keep people interested and engaged. Once that interest is lost, it may never return. This makes product engagement a very important part of the overall product experience.
Maximizing product engagement is certainly no easy feat. And it is a top concern for any business that develops or implements new products or tools.
Next, let’s look at a few essential strategies for maximizing engagement.
3 Ways to Improve Product Engagement
Below are a few disciplines and areas to focus on that can maximize product engagement, regardless of who the end users are.
User Experience (UX) Design
UX is a design field that covers every aspect of the user experience.
It can include:
- Graphic design
- User interface design
- Sensory design
- Interaction design
In software, UX design focuses on delivering experiences that are relevant, meaningful, and useful.
Effective design plays a major role in how engaged users are with their products.
Product Design and Product Experience Design
Product development and design also play a key role in engagement.
Generally speaking, well-designed products are:
- Functional and relevant
- Simple and straightforward
Among other things.
Product Adoption and Implementation
The product adoption cycle covers many aspects of the end user’s experience, including:
- Marketing and sales
- Customer service
- Onboarding and product training
- Technical support
It is important to note here that these stages of product adoption aren’t related to design.
That is, engagement is affected by other factors beyond the product itself.
How the product is adopted also plays an important role in user engagement and experience.
Product Engagement Best Practices, Strategies, and Tips
Below are 10 tips that can help businesses improve product engagement, whether they are product developers or enterprises adopting new software.
In either case, better product engagement can generate better returns on a product investment.
1. Let users lead the way.
User-centrism is a principle that extends across many business functions.
When it comes to product engagement, businesses should let users inform:
- Product design, UX design, interaction design, and other relevant design domains. User feedback, user testing, and analytics can all offer insight into what users actually want and need. That information, in turn, can help product creators design products that are relevant, useful, and engaging.
- Onboarding and training efforts. User feedback and data can also impact onboarding and training, two critical stages of the product adoption cycle. Improving these two areas will consequently improve engagement rates.
- Marketing, sales, support, and other stages of the adoption cycle. User data can also improve other business areas that affect product engagement. These can include customer support, marketing, and more.
Putting users at the heart of business efforts offers a number of benefits:
- Products are more relevant, and therefore more engaging
- Adoption programs are more agile and responsive to user needs, improving the end user’s experience
- Business processes deliver better service to the end users, because their efforts are centered around users, rather than features or what businesses “think users want”
Many of today’s most popular business approaches, such as lean and agile, are specifically designed around the user.
To develop user-led processes, products, and practices, organizations should:
- Redesign business processes so that they are built around users. Certain business practices are more user-centric than others. Lean and agile, for instance, are user-led business practices that put users at the heart of the development process.
- Continually collect user feedback, data, and analytics. The best way to learn from users is to proactively collect and analyze user information. That information can then fuel future decisions and improve product engagement.
- Learn from that information and adjust as needed. Adaptation and agility, as we discuss below, are key to survival in today’s fast-paced economy. Letting “users lead the way” truly means letting users drive decison-making. Businesses should not shy away from user-centrism, even if it means changing the way they operate.
Today, the most successful businesses are those that put users and customers first.
This principle should become part of the very fabric of an organization … when it does, user engagement and the user experience will certainly improve.
2. Assess the state of product engagement first, then develop solutions.
There is no simple answer to improving product engagement.
The best way to enhance engagement, as mentioned, is to understand engagement in a specific context or situation.
With user feedback, analytics, and data, businesses can pinpoint the root causes of engagement problems.
Engagement deficiencies can stem from many areas, including:
- Design, such as product design or UX design
- Customer service or technical support
- Onboarding and training
Unless an organization analyzes its product adoption cycle in detail, it won’t have a good picture of its product engagement issues … or how to fix them.
3. Use models to better understand the user experience and the product adoption journey.
There are different models that can help businesses better understand and analyze their users, products, and experiences.
For instance, the customer journey describes the customer’s purchase pathway from the customer’s perspective.
One model of this journey, developed by McKinsey, breaks it down into four phases:
- Initial-consideration set – The customer considers an initial group of brands
- Active evaluation – Customers evaluate and compare their options
- Moment of purchase – The customer selects a brand and makes a purchase
- Post-purchase experience – The ongoing exposure of a customer to the brand helps inform their subsequent purchase decisions
Another view of the customer experience, developed by tech entrepreneur Brian de Haaff, involves seven components:
- Marketing – How customers learn about a product
- Sales – How customers gain deeper knowledge about the product, through trials or communications with sales representatives
- Technology – The technology itself and its features, which represent the beginning of an ongoing interactive relationship
- Supporting systems – Internal business processes that enable product delivery, such as billing, analytics, and provisioning
- Third-party integrations – How a product works with other products and solutions
- Support – Customer service, technical support, training, and other support functions
- Policies – The rules that govern how a business and its employees operate
Of course, these are only two examples of models that can help businesses better understand their products and customers.
Any process that impacts the end user experience can be modeled, not just the customer journey.
And those models, in turn, can help businesses develop more effective strategies, roadmaps, and product adoption solutions.
The more effectively business units collaborate, the more effectively the business will operate.
This is especially true when it comes to improving customer experience and engagement.
Better collaboration does a few things:
- Improves internal communication regarding customers and products
- Helps business units build a unified view of the customer and their needs
- Decrease inefficiencies around processes related to product engagement
Ideally, different business units should operate in unison as much as possible.
This can mean:
- Democratization of data and information. Data democratization refers to the open sharing of data within a business. Many organizations keep information “siloed” – that is, business units don’t share data with one another. Democratizing that data can result in a variety of insights and business improvements.
- Cross-departmental teams and meetings. Teams that don’t communicate won’t reap the benefits that come with collaboration. Meeting frequently and regularly is one way to improve internal communication and initiate new processes. Another is to develop cross-functional teams with specific agendas, such as improving product engagement.
- Changes to existing business processes or structures. Another option is to restructure certain business processes or business units. A company that is “digitally immature,” for instance, may need to make significant changes to its digital operations in order to maximize internal collaboration.
Greater internal efficiency will translate into better product delivery, customer service, and ultimately a more engaging product experience.
5. Inform decisions with analytics.
Data drives insights and improves decisions, among other things.
To maximize product engagement, businesses should:
- Deliberately collect data related to product engagement
- Analyze that information continuously
- Make improvements where needed
However, many businesses realize that data collection and analysis is just the beginning.
To truly stay modern and efficient, many businesses go even further, by:
- Building a data culture. A data culture, according to McKinsey, incorporates data into the very culture of a business. Data-driven cultures make data an integral part of business operations, which opens up many new possibilities across many business areas.
- Democratizing data across the organization, as mentioned above. Improving data visibility across a company almost automatically unlocks untapped potentials and possibilities.
- Using modern technology and techniques, such as machine learning. Effective, innovative use of modern technology can grant a competitive edge, regardless of the industry.
Naturally, such changes cannot happen overnight.
But the right use of analytics can dramatically improve product insights, decision-making, and strategy.
6. Stay agile and lean.
Today, agility and flexibility are must-have traits for any business, for a few reasons:
- Customers can be unpredictable
- Understanding customer needs is an ongoing journey
- Customers’ needs and wants can change rapidly
- The marketplace or external circumstances can also change rapidly
Staying agile helps business respond to real-world circumstances in real-time.
Agile and lean business practices have become more and more common in recent years, especially in software development.
They take a very different view from traditional, older models of product development.
The “waterfall” approach to product creation, for instance, releases full-featured products.
However, this approach comes with a number of drawbacks:
- Research and development often takes a long time
- Release cycles take longer
- The user feedback loop takes longer
- Businesses risk building products that they think users want … instead of products that people actually do want
Agile and lean thinking, however, circumvent these obstacles by:
- Focusing on collaboration, responsiveness, and flexibility. Frequent collaboration and communication – along with a focus on responsiveness over static plans – help teams react to external circumstances efficiently and effectively.
- Releasing product iterations in shorter cycles. Lean thinking, for instance, emphasizes incremental changes and fast releases, all of which are driven by user input.
- Continually learning from user and stakeholder input. As mentioned, let users lead the way. When collaboration and user input become the baselines, user-led development becomes the default.
One end result to agile: products and experiences that are more engaging for the end user.
7. Create products that are functional, meaningful, and lovable.
Good products should have characteristics such as:
- Usability – How easy a product is to use, learn, and remember
- Utility – How well it meets the needs of the end user
- Meaning – How much meaning users derive from using a product
- Lovability – How much users enjoy a product
A product that meets these criteria will, among other things, be more engaging to the end user.
It will deliver a better experience, be more useful, and be more meaningful.
All of which, in turn, will help improve important metrics, such as:
- User satisfaction and retention
- Product-related expenses, ranging from marketing to research and development
- The value of the product, both to users and the organization
And ultimately that product’s performance in the marketplace.
8. Take a holistic, top-down view of your business and products.
In other words, don’t ignore the impact of other business areas on product engagement.
Other business dimensions affect product engagement, including:
- Customer service
- Technical support
- The employee experience
- Internal business process efficiency
Each of these areas represent part of the entire customer’s experience. And, as a result, they also contribute to product engagement, either indirectly or directly.
To gain the deepest insights into product engagement, it pays to take a big-picture perspective of the user experience.
Models, as mentioned above, can be very useful aids.
They can help organizations understand the user journey in detail.
And they can offer insight into how different business functions impact the user experience.
It is certainly true that some areas are more critical than others.
For instance, stellar customer service cannot save a flawed product.
However, a top-down view of the customer experience can help businesses further enhance product engagement at each stage of the customer journey.
9. Use the right product adoption tools.
Product adoption, onboarding, and training make a massive impact on engagement.
The right adoption tools can help businesses:
- Streamline and improve onboarding
- Train more efficiently and quickly
- Decrease user frustration
- Improve engagement, retention, and satisfaction
To name just a few benefits.
Digital Adoption Platforms (DAPs), for instance, are platforms specifically designed to improve product engagement and adoption.