What is Product Engagement

Product Engagement describes how users and customers interact with your product. Measurements of product engagement tell you things like how often customers use your product over time, which parts of your product they find most valuable and where you may have engagement challenges that need to be addressed. In this post, we’ll cover why product engagement matters, ways to improve engagement and how to measure and identify opportunities for optimization.

 

Why is Increasing Product Engagement Essential for SaaS Businesses?

You may have noticed, but there are a lot of SaaS products in the market, all competing for customers’ time, attention and budgets. To win market share and keep your customers happy (and keep them as customers!) your product needs to be deeply engaging. 

Customers will only continue to pay for your product as long as they find it valuable. And if they’re not engaged with your product, chances are good that they don’t find it valuable. Simply put, products with high engagement will have high retention and those that don’t will have high churn. Strong product engagement is the difference between a fast growing business and a failing one. 

Users today expect the products that they use to continuously improve and respond to their evolving needs. And as your product continues to evolve, you need to make sure that users adopt new features and engage with new parts of your product. The key to a success product engagement strategy is measuring, managing and continuously improving product engagement, through ongoing engagement with your users. Creating an engaging product is an ongoing process, not a one-time effort. 

 

9 Ways to Improve Product Engagement (and Reduce Churn)

Hopefully you’re convinced that strong product engagement is key to the success of your product. So what are some ways that you can build a really engaging product? Here we’ll cover 9 tactics for increasing your product engagement.

 

Empower Users to Guide Your Roadmap

In the early days, before your product is actually in the hands of any users, you have to build what your team believes is the right solution, relying on your best understanding of the pain that you’re trying to solve for and more than a bit of gut instinct. But once you have real users, your users’ requests are one of the best inputs into your product roadmap. After all, they’re using your product every day and can help you understand how existing features can be improved and what new features will be most valuable.

This process makes users feel that they have a direct line of communication with the product team. To get even better insights into what you should build, you can associate feature requests with different user types or cohorts (e.g. free users vs high value customers). You can put your best feature requests up for a vote by other users. Finally, keep users in the loop on progress of the features that they requested, which is another great way to keep your users happy and engaged. Even though you can’t build everything that your users want, by showing them what your team is currently working on, what features you just released and which ones you’re considering building, your users will see that your product is a living, constantly improving thing.

The best way to collaborate with your users on your product roadmap is to engage with them right in your app. After all, the most natural time for users to provide input on what could make your product better is when they’re using it.

A user requests a feature

By empowering users to guide your roadmap, you not only drive better engagement by building a better product, but the feature request process itself will contribute to a more engaged user base. People use and value products that really help them solve a pain or problem that they have, so the more input you get from users, the more likely it is that your product will be highly valued.

 

Validate Your Way to a Great Product

This may be a painfully obvious statement, but the key to an engaged user base is building a great product. If you have a great product, the marketing and retention will largely take care of itself.  The only way to create an amazing product is to ensure that you are building what users actually need, or what actually drives value. So how do you do that?

As you identify features to build (hopefully with their input, as we discussed above), you should validate them with your users. Before you build, you can use surveys or feature previews to get feedback from your users about what you’re planning on building. You can target these feedback requests at specific cohorts of users, such as your highest value customers.

The feedback that you receive will reduce risk in your roadmap by helping you prioritize what to build next, iterate on feature concepts before committing resources to building them and avoid wasting time and resources building things that your users don’t care about or value.

 

Trigger the Aha! Moment (ASAP)

If you’ve built a product that delivers real value to users, there’s some “aha moment” in their early use of the product where they suddenly understand how your product really helps them. They go from being casually interested in your concept to believing that they need your product to make their life easier.

This moment is critical, because if you don’t reach it soon enough, your users may become distracted and never return to your product. Attention spans are short, so you only have limited time to reach this moment or you may miss your window.

So first you need to understand what that “aha moment” is and then figure out how to get them there as quickly as possible. For example, use your initial onboarding flow to guide them to the “aha moment”. Think about each part of the experience, what they need at each stage and how to encourage them to take the next step. Where are the friction points? Can you eliminate them or introduce them later (e.g. maybe don’t ask for an email or contact info right off the bat – get them a bit more invested).

Once you understand the steps that you need to get your users to that “aha moment”, you can optimize the product experience and use supporting tools like triggered emails, in app cues or chat flows to ensure that your users get to that moment as quickly as possible.

 

Reduce Friction With A Freemium Version

Why not start driving product engagement before users even think about paying for your product? Consider taking a piece of your product and making it available for free as a way to reduce friction in your sales process and ensure higher engagement for free customers who convert to paying customers.

By making a well-aligned piece of your product available for free, you’ll attract a base of users who are a strong fit for your paid offering. They have an opportunity to test your product and receive some value without making a financial commitment, which is a great way to reduce friction in your sales process. Those users who are most engaged in your free offering are much more likely to become paying customers. And because they found a lot of value in free offering, they’re more likely to be deeply engaged users once they become paying customers, leading to higher lifetime value.

Even though not all of your free users are likely to become paying customers, a valuable free offering will keep you on the minds of those users when they reach the point that they have a need for a more full-featured solution. This makes it more likely that you’ll be able to win those paying customers when their need for your solution grows.

Oh, and we actually built a really valuable free in-app announcements, feedback and support tool. It’s very meta. You should check it out (and tell your friends): parlor.io/free

Announce New Features Within Your Product

So you’ve just built some great new features and you know your users will be excited about them, because the feature requests came from your users. But if your users don’t know you’ve just released the thing they’ve been waiting for, they won’t know to use it.

So don’t use boring release notes that no one will read, celebrate your new release with a product announcement! And while you can certainly email your users, and write a post about the new features, there’s why not announce new features right in your app? You can even target these feature announcements to specific users (such as those that requested it) and thank the users who suggested the feature.

Parlor feature announcement

In addition to pushing the feature that you just released, provide an easy way for your users to view past feature announcements as well, so they can see that your product is a living, constantly improving thing. Finally, by announcing in-app, you can let users give feedback on how they feel about the new feature, which will help you understand what to focus on next.

 

Cut Unnecessary Features

Many SaaS products become bloated with unnecessary features once they’ve been around for a little while. Product teams often release new features upon new features, without investing time to to understand what underutilized features can be cut. If you don’t follow a continuous process of evaluating which features are no longer valuable, you’ll end up with a bloated, confusing product experience, which definitely won’t help your product engagement! All those unnecessary features are also very expensive to maintain, so cut the waste!

So how do you know which features need to be changed or perhaps removed altogether? We use a Feature Fit Index survey, which asks the simple question: “Would you be disappointed if this feature disappeared?” This type of survey will let you know whether the feature you’re evaluating is valued, needs to be changed or should be cut altogether.

A great product should be focused on doing the right things well, and not trying to be too many things. A lean product will see higher engagement, keep your users happier, your identity strong and save on maintenance costs.

 

Provide Exceptional Support

Even the best products still need to provide their users with good support resources. To keep your users happy and engaged, make it easy for them to get the answers and support that they need. Different users prefer to communicate through different channels, so make sure to support your users where they are.

The best place to provide support is right in the app, in the moment that they’ve just experienced the thing that they need help with. If you give you users an opportunity to let you know what type of need they have, you can route their request accordingly. For example, right in you can ask them if they have a feature request or a support request. You can route those feature requests directly to your product team and route support directly to your support chat.

feature_or_support

In addition to providing human-response support, make sure your users can easily find the answers that they need in self-service channels such as a knowledge channel or a support forum, where users can help each other. And create automated onboarding flows that direct new users to the resources they need to quickly ramp up in your product experience.

Whatever combination of resources you provide to your users, the key is to make sure that they can find what they need when they need it. Otherwise, your frustrated users may turn to your competition instead.

 

Talk to Your Users

The tactics that we’ve discussed above are great ways to drive product engagement. But sometimes there’s no substitute for the human-to-human interaction of a live conversation. Where are some important places to talk to your users?

While some simple SaaS products sell themselves, most use some form of a sales team. Your reps are one of the first interactions that a future user has with your company. Equip your sales team with the knowledge and resources that they need to effectively communicate your product’s value proposition. But you can also use them as a great source of feedback for your product. For example, what are the reasons why potential customers aren’t buying your software? Consistent reasons can become valuable inputs into your product roadmap and that human-to-human interaction is the best way to uncover them.

Similarly, customer success teams talk to users every day. They often hear requests from users about how the product can be improved. It’s important that your customer success team has a good process for capturing and storing that feedback and then sharing it with the product team.

And even if your product team is receiving those in app feature requests, as well as input from customer-facing teams, there’s no substitute for making sure that your product team is regularly talking to users, and hearing feedback firsthand.

 

Turn Users Into Collaborators

The best products are built with continuous input from your users. Because no one better understands what your product needs to do than those who are using it every day. So turn your users into collaborators in this product improvement process.

We discussed above how you can do this with surveys or feature requests, but you can really supercharge this process by inviting some of your most engaged and most valuable users into a customer council. This customer council is one or more groups of highly engaged users who can help you improve your product. They’re intrinsically motivated, which makes them a fantastic source for product input.

 

How to Measure Product Engagement and Identify Weaknesses

Now that we’ve discussed a number of different ways to drive product engagement, how do you measure it so that you can understand whether you’re increasing product engagement and identify weak areas that can be improved? We’ve gone into a lot more detail on product management metrics in this post, but we’ll cover a few core ones here.

 

Active Users: DAU, WAU, MAU

These acronyms stand for Daily Active Users (DAU), Weekly Active Users (WAU) and Monthly Active Users (MAU). They each measure active users within a certain period of time and are a great way to get a high level understanding of user engagement and how it’s changing over time.

The time period that you choose to measure (e.g. daily vs monthly), will depend on the nature of your product and how it’s intended to be used. For example, a social media platform like Instagram may measure engagement in daily active users, but an accounting program like QuickBooks may look at weekly or monthly active users.

Whatever time period you choose, you then need to define what “active” means for your product. Is it just logging in or should you set a threshold of a minimum level of activity? Now you can measure active users across different periods of time, to understand how product improvements or other changes are impacting active users. You can also compare active users across different user cohorts, such as free vs high value customers.

 

Stickiness

Stickiness is a measure of what percentage of your users continue to engage over time. It’s a reflection of the value that customers perceive in your product. Those that value your product highly will continue to use it (and pay for it), whereas those that don’t will drop off and stop engaging (or stop paying!).

As with active users, how you measure stickiness depends on how your product is intended to be used. For example, if your product is intended to be used daily, you may calculate the stickiness ratio as:

Daily Active Users (DAU) / Monthly Active Users (MAU) = Stickiness Ratio

A ratio of 40% would tell you that for every 100 monthly active users you have, 40 of them use your product daily. No absolute number is good or bad, but monitoring changes in the stickiness ratio over time will help you understand trends in how you users value your product.

 

Number User Actions Per Session

Measuring the number of actions that a user conducts each session will also help you understand how engagement changes over time. To calculate it, you’ll need to define what a “user action” is, which will be dependent on the type of product that you have. Once you define the actions, you then sum them up for each user. You can now calculate changes in this engagement metric over time, as well as across different cohorts of users (e.g. free vs paying customers).

 

Aha! Moment Conversion Rates

As we discussed above, that aha moment is a critical one in driving product engagement. So you might measure what percentage of each monthly cohort of users reaches that aha moment. As you make changes to your onboarding, support or the product itself, you can see the impact that it has on the aha moment conversion rate.

You can also use this information to uncover opportunities for improvement. Where are users stalling in the onboarding process? Are they having trouble finding that feature or part of your product that’s key to triggering the aha moment?

 

Act on the Insights

Now that we understand how to measure product engagement, how do we turn those findings into actionable insights?

 

Identify problem areas

First, look for problem areas. Where is engagement dropping off? What types of users are showing higher or lower engagement? Which parts of your product aren’t being used as much as you’d expect?

In onboarding: You can think about your onboarding flow as a series of stages or gates that you want users to go through. Where do you see the biggest dropoffs? Those are the points to focus in on as you look for opportunities for improvement. Once you understand where those friction points are from a high level, you can zoom in with a tool like FullStory to get a better understanding of what’s actually causing friction.

In your product: Once you’ve onboarded users, where are there friction or dropoff points in the use of your product itself? Are users struggling to find or use some of those most valuable parts of your product? Are there features that they don’t even know exist? If you find that certain features are underutilized, it’s important to understand whether it’s due to lack of perceived value or just difficulty finding or using the features. If you users are confused about how to use your product, you can’t expect strong product engagement or perceived value.

 

Create your hypotheses

Once you’ve identified these problem areas, you can then prioritize the opportunities that will have the biggest impact. As you figure out which areas to focus on, develop your hypotheses for how you can increase engagement. Do you need to make changes to your onboarding flow? Is more support material needed? Do you need to give your users a roadmap to their first few days in the product to guide them to those aha moments? Are there bloated features in your product that can be removed to increase engagement with the core product?

After you’ve created your hypotheses, be sure to have a plan for how you’ll measure success. What are metrics that you expect to be impacted by the proposed changes?

 

Test

Some of the opportunities that you’ve identified may involve significant product work. Or you may feel that it’s risky to roll out a change to your entire user base. So testing is a great way to validate your hypotheses while managing risk. Testing may involve rolling out the changes to a small group of users. Or maybe you’ll create mockups of the new flows and test them in a focus group.

Some other changes may be perfectly safe to just roll out directly to your users, such as new support materials or onboarding resources.

Once you’ve rolled out the changes or the test scenarios, measure the results. Based on what you find, you may need to iterate on your hypotheses or roll out new tests. Regardless, product improvement is an ongoing process that’s never complete.

 

Ready to Increase Your Product Engagement?

We’ve talked about some ways to increase engagement, how to measure engagement and identify opportunities for improvement, and a continuous process for testing and optimizing.

Are you ready to start improving your product engagement? Check out our free in-app announcements, feedback and support tool or setup some time to talk! We always enjoy talking to other teams about this stuff!