Product Engagement Metrics to Track and How to Improve Them

Here, we will talk about

• 10 most critical product engagement metrics that every product manager should track,
• actionable strategies to improve these metrics, empowering you to drive higher levels of product engagement, retention, and overall product success.

What is product engagement?

If people are interested in or curious about your product's features, they interact with it and use the features.

Product engagement is the volume of this interaction.

We can also define product engagement simply as how your users engage with your product.

We refer to certain actions and behaviors when we talk about product engagement, such as:

• how frequently users interact with the product,
• how long time they spend using it, and
• the depth of their interactions.

Product Engagement vs. Customer Engagement vs. User Engagement

Don't get upset if you're not sure about the nuances between them. It's not you. These concepts are closely related.

But they have slightly different meanings.

Let me tell you briefly:

User engagement is closer to product engagement, making it harder to see the difference.

Here, I will simplify it for you:

Product engagement is a subcategory of user engagement. It has a specific focus on the interactions related to a particular product or service within a larger digital platform or ecosystem.

👉🏽 Product engagement is how often users upload photos or complete tasks in a project management tool.

However, user engagement enlarges its focus on all interactions with the platform, including but not limited to the product itself.

👉🏽 User engagement is how users navigate through a website or engage with contact forms.

👉🏽 Customer engagement, on the other hand, covers interaction with the product and goes beyond it. It also includes touchpoints on various channels, such as customer support, marketing campaigns, and social media platforms.

Why is product engagement important to track?

It gives an insight for further improvement

By following your levels of product engagement and analyzing the product engagement metrics, you can build a knowledge base to meaningfully understand user behavior on your product.

So, you can get insight to

• create a positive UX,
• build brand loyalty, and
• stand out among your competitors.

It is a valuable asset for you to draw a winning product journey.

You can increase the retention rate radically

When your users discover the value of the product, they engage with it more. In this case, they are likely to continue using it over time (give me a high five for your high retention rate 🙌🏽).

‎When you find high engagement levels, you can analyze the converting areas to increase them throughout the product journey.

Conversely, low levels of engagement can lead to churn, which is a nightmare for SaaS companies. The good news is that a practical analysis of product engagement metrics can help improve engagement levels.

So, let's talk about the product engagement metrics to track to get higher engagement levels systematically.

10 Product Engagement Metrics to Track

1. Product Engagement Score

Product Engagement Score (PES) provides insight into how users interact with your product.

You gain a holistic view by evaluating different factors (adoption, stickiness, and growth) together to see your product’s overall performance.

This metric reflects what's happening with your product.

The PES formula is as follows: (Adoption + Stickiness + Growth) / 3

‎This holistic approach also makes it easier to understand the reason behind PES if it is low.

2. Feature Adoption Rate

Feature Adoption Rate (FAR) indicates the proportion of users who adopt certain features in a product. This measurement may seem like it represents a single value, but you can use the result of this measurement to answer these questions:

• Do your features encourage usage?
• How successful are features in terms of attracting users?
• How much do they contribute to the overall product experience?

If the FAR is high, it means that you understand the needs of the users and make improvements and adjustments accordingly. This is a real success for a SaaS product.

A low FAR indicates that you need to understand your target audience better and create a more useful product.

The FAR formula is as follows: (Number of Users Adopting the Feature / Total Number of Users) x 100

3. Active Users: DAU, WAU, MAU

Active users refer to users who have interacted with your platform or application over a period of time.

In this case, the important factor is the intended use of the product. For example, some products are built for weekly use. Being “active” for these products once a week is an achievement.

Let's imagine a platform where you provide daily business communication, and for that platform, being "active" every day is an indicator of success.

Accurately defining Active Users is one of the most important steps in measurement. Therefore, when measuring Active Users, first determine, on average, how often your users should come to use the platform and interact with features.

DAU (daily), WAU (weekly), and MAU (monthly) metrics help you get more accurate insights.

Note: Users in these metrics are unique. In other words, no matter how many times a user enters the application in a week, it is measured as one user.

4. Retention Rate

Retention Rate is the proportion of customers who agree to pay for your product over a period of time and return to your platform with purpose.

For products such as computers, where sales are made once over a long period of time, the retention rate may not directly indicate success. However, considering that SaaS products use the subscription system, it is an important measurement.

The retention rate formula is as follows:

The number of active users who continue the subscription is divided by the total number of users at the beginning of the time period.

5. Time in Product (Session Duration)

Time in Product indicates the time a user spends interacting with a product/platform during their visit. This period starts when the user enters your site/application and continues until the user exits the site (or stops interacting).

A high average session duration shows that:

• Users are satisfied with your product,
• Users find the product useful and helpful.

On the other hand, low session times may indicate that users find the application complex or unusable.

This formula provides a straightforward approach to understanding how users engage with the product over a given period.

Average Session Duration = Total Number of Sessions / Total Session Duration

6. Product Stickiness

Product Stickiness refers to the degree to which users return repeatedly to use the product.

If a product is sticky, it strengthens the customer-product relationship. This strong relationship and frequent interaction encourage the customer to purchase additional products over time. Additionally, the customer renews his subscription over and over again.

To measure product stickiness, you can use DAU/MAU (Daily active users / monthly active users).

‎A sticky SaaS product means it's doing its job well, which is crucial in the era of product-led growth.

7. Number of User Actions Per Session

This metric shows the average number of times a user interacted with your platform/application in a given time period. It measures the amount of actions or interactions users take within the product during a single session.

These actions may include clicking buttons, navigating pages, filling out forms, or any interaction with the product interface.

By tracking this metric, you can measure users' level of interaction and engagement with the product during their individual sessions.

The number of user actions per session can help identify

• usage patterns,
• areas of high engagement and
• potential opportunities for improvement in the product's user experience.

8. Churn Rate

The Churn Rate shows the rate at which users/customers stop using your product. You can think of this as the percentage of users who cancel their subscriptions.

Of course, having a high rate on this measurement is a negative result. Conversely, a low Churn Rate means you can retain your customers.

Knowing the Churn Rate allows you to assess whether your current marketing activities and product experience are achieving the results you want.

To calculate Churn Rate: Total number of subscribers lost / total number of subscribers gained in the same period * 100.

‎Acceptable churn rates differ depending on the industry. For example, the generally acceptable churn rate for SaaS is between 5-7%.

9. Week 1 Engagement

Week 1 Engagement lives up to its name, meaning how users interact with the product in their first week. If users adopt your product quickly, your churn rate will decrease in an age when nobody has time. You can also use this metric to evaluate new features you add.

This is very important to understand whether new users adopt the product. Now, in SaaS, where competition is high, users can immediately abandon an application if they find it complicated or useless and consider another alternative.

Also, considering that there are trial versions for the first week, such as free and freemium, it is easy for users to give up the product if they are not satisfied.

Therefore, measuring the Week 1 Engagement metric can provide you with important insights.

10. Aha! Moment Conversion Rates

Conversion Rate is a metric that shows you the reward of your efforts.

What we mean by “conversion” here is that users take the action you want from them. That is, they respond to your call to action.

The action you are targeting could be one of the following:

• Switching to the paid version
• Using a higher version
• Buying additional features
• Filling a form
• Subscribing to the newsletter

Not every user who visits or interacts with your product will make this conversion. Therefore, understanding and analyzing this ratio can be useful in many aspects, such as future marketing activities and product development.

8 Tactics to Increase Product Engagement

1. Attract people to your product with exceptional support

This is a great way to increase product stickiness - and remember product engagement score directly relates to the stickiness levels. However, exceptional support improves all the engagement metrics as it builds robust relationships with the users.

Here is how it works:

When users have a positive experience with brand support, they are motivated to engage with the product more often and for longer. They feel that the difficulties they face will be solved immediately.

Users encounter a brand that listens to and understands them. They feel that their needs are met and their concerns are taken seriously. This increases the likelihood of them developing a sense of loyalty towards the product.

How to do it: You can use tools to reduce the support team's workload and offer various channels to be reached. Many ways to give support will help people to choose their favorite channel and encourage them to stay on the product.  

2. Educate your users through gamification

85% of respondents in the research said they’d spend more time on an app or software because of gamification elements.

This number is quite motivating to learn more about it.

Educating people also increases the Feature Adoption Rate (FAR). If they know it, they can adopt it.

Here's what you can do:

Show their improvement within the product

It makes people feel good when they accomplish something, like finishing a level or earning points. This feeling makes you want to continue using the product and accomplish more. It means more active users and longer session durations on the product.

How to do it: You can do this even by simply adding onboarding checklists. When they see where they are in the process, they feel better.

Include challenges and competitions

People love to receive rewards, and this includes virtual ones. It's like a pat on the back for doing something right. When you give rewards like badges or virtual trophies, people want to keep using your product to get more.

Challenges and competition make things interesting. People enjoy trying to beat a challenging level or competing with their friends. You can design these challenges around your features to improve product engagement.

A good example: Duolingo does a great job on rewards and challenges, which can give you some ideas about how to do it.

These events on the product, when designed strategically, expand the Number of User Actions per Session. Which actions are important for you to take? Include them in the challenges.

Pro Tip: UserGuiding's Success Manager Kemal Yardımcı recommends businesses reward users with a discount code after they click a certain number of pages or visit the platform a few times.

Provide personalized experience

Everyone is different. It's nice for a product to know what users like and to offer something that suits their interests. To increase Aha! Moment Conversion Rates: you need to approach people according to their interests.

An experience targeting to please all can fail to touch even the core target groups.

How to do it:

According to research, "81% of brands say they have a deep understanding of their customers; less than half (46%) of global customers agree."

It's quite sad when there are many tools and strategies to get to know your customers.

Spend time and effort on understanding and segmenting your users and then focus on coming up with gamification ideas. Good personalized UX examples can inspire you on this.

Famous Spotify Wrapped or Grammarly's personalized emails showing what you've done recently on the platform can be two inspiring examples.

Add micro-engagement opportunities

Sometimes, apps can teach you new things or make you do tasks without feeling like work. Micro engagements are great for achieving this.

When a product uses micro engagements as a gamification method to improve or teach skills, it makes users want to keep learning.

This will help you convert people, retain users, activate their presence on the product, and more.

How to do it: Use micro surveys at some steps to engage with your users. They can help you listen to your users in pivotal moments. Ask them questions to check if

• they are happy with the processes,
• they need further support,
• they recommend anything.

According to your product itself, you can also create quizzes and test their knowledge. Or even just simple "did you know that" kind of questions can make your product more interesting.

3. Improve your product continuously

Continuous improvement can keep your users interested by showing that the product is always getting better. It's key to improve all the above-mentioned metrics.

However, investing in product improvements will boost your product engagement score, user retention rates, active users, and session durations.

Here's how to apply it:

Listen to feedback

What users say can guide you through improving your product in an efficient way. Paying attention to user feedback helps determine areas for improvement and prioritize what changes need to be made.

How to do it: Communicate with your users when needed after an in-app survey. Don't stop there and also analyze the survey results to get a meaningful result that will help you improve your product efficiently.

Test and Iterate

Continuous improvement involves trying new ideas and seeing what works best. This may mean testing existing and new features with a small group of users before rolling them out to everyone.

How to do it: A/B testing allows you to reduce risk by testing changes on a small scale before rolling them out to a wider audience.

By learning from these tests, you can make informed decisions about what changes will work well.

Data analysis provides insights into how users interact with your product. You can gain a deeper understanding of what users find valuable and where they may encounter obstacles by examining user behavior, such as:

• Clicks
• Conversions
• Or time spent on a page

Announce product updates

Keeping users informed about upcoming changes and improvements builds trust and keeps them invested in the product.

How to do it: This can take the form of release notes or in-app notifications, depending on what works best for your audience.

Product updates are great to re-connect your users and invite them to engage with your product even more.

Pro Tip: I talked about this article with UserGuiding Success Manager Kemal Yardımcı, and he recommended that 3- or 4-step bite-size guides can help you encourage users to use new features and improve feature adoption.

4. Personalize your communication whenever possible

Creating a personalized onboarding process involves understanding users' needs and preferences and tailoring their experience accordingly.

These strategies help make the first steps of using your product more personal. As a result, users get more involved.

User Segmentation

Segmentation allows you to understand your users' preferences better and tailor the onboarding process accordingly.

‎This allows you to develop various marketing strategies aimed at nurturing your loyal, paying customers while also re-engaging with inactive users.

How to do it: Divide users into groups based on shared behaviors or demographics. Plus, you can segment users based on their engagement level.

Personalized Messaging

Create personalized messages and communications that engage with each user segment. Use language and tone that addresses their specific pain points or goals.

How to do it: New users might receive a welcome email introducing them to the product's basic features, while more experienced users might receive tips and tricks for maximizing productivity.

Targeted Onboardings and Feature Introductions

Introduce key product features gradually and in a targeted manner based on each user's needs and preferences. Instead of overwhelming users with all the features at once, focus on highlighting those that are most relevant to them.

How to do it: To give you an idea, if a user indicates an interest in analytics, you might prioritize showcasing data visualization tools during onboarding.

To simplify the process, you can create target-focused product tours. When people choose their major interest(s), they can start the relevant tour.

Pro Tip: Another idea from Kemal is to consider user newbies for a while and offer onboarding several times. He says

"I recommend accounts that do user identification to show basic onboarding materials to new users more than 2 times so that even if the "aha" moment doesn't come out on the first visit, we can attract this user on the 2nd or 3rd visit."

5. Connect with your users with an emotional design approach

"Emotional Design" is a design that makes users feel good when they use a product.

When users feel happy or excited, they become more willing to spend more time exploring its features. This keeps them engaged and coming back for more.

To make an emotional design work:

Use Microinteractions

Microinteractions are small, subtle animations, sounds, or visual cues that occur within a product's interface in response to user actions. You can use them for various purposes.

They can provide feedback, guide users, and enhance the user experience by making interactions more engaging.

Pro Tip: Another idea from UserGuiding's skilled Product Designer, Ece Çakanel:

"You can add micro animations - congratulations animations when checklist is completed."

6. Adopt technology to make use of today's gems

Today, many tools can help you improve product engagement.

Technology, for example, will allow you to understand your users' intention, analyze their engagement, improve your product experience. You can also personalize the processes and onboard your users to make sure they get the maximum value from your product.

Preview your final output on the next page

How to do it: So, how do you adopt technology? It would not be a wise strategy to incorporate all new developments directly.

• Research and Experiment: Learn about new developing technologies and experiment by integrating them into the product to see which ones will interest users.
• Listen to User Feedback: Collect feedback from users about their experiences with new technologies and use it to make improvements.
• Ensure Continuous Improvement: Improve the product based on insights from data analysis and user feedback, ensuring it remains relevant and engaging over time.

7. Build communities instead of just serving users

This works as it arouses a sense of belonging among users. They can be a part of a group, where they can even contribute to, instead of just using and consuming. This connects them tightly to your product.

This is important from a product engagement perspective because when users feel connected, they are more likely to engage with the product and use it frequently.

How to do it: As of January 2023, Instagram and Facebook were considered the most effective social media platforms for building active communities. However, depending on your niche, you can do it on many other platforms, or you can create a forum within your product to make space for building community.

To make community building work, you can showcase users' positive experiences through tactics like highlighting user stories. By highlighting user contributions, you encourage new users to join the community.

Additionally, you can encourage active participation by featuring user-generated content and providing forum platforms for interaction.

8. Marketing doesn't stop when you gain the user

Marketing helps you gain users. But it also helps you retain them. It encourages them to stay in the product and take more action there.

Marketing is crucial for product engagement because it serves as the bridge between a product and its users.

It involves activities like:

• Spreading the word through various channels,
• Creating powerful content,
• Highlighting the benefits and values of the product.

Effective marketing ensures that people are aware of the product's existence, understand its value proposition, and feel the need to engage with it.

How to do it: For instance,

1. Emailing allows direct communication with users.
2. Content creation and ebooks provide valuable information that educates and inspires them.
3. Problem-solving content addresses users' pain points, showcasing how the product can offer solutions.

To sum up

The main focus of product engagement efforts is revealing a product's core value. To achieve this, you'll need to use various methods, and—to be honest—these tactics I shared above are not the best choice.

Engagement requires a holistic approach and strategic application. You may consider your product and resources and start with the most applicable ones in your own case.

You may also learn more on our ebook revealing top tips to instantly boost user engagement. As user engagement and product engagement are interrelated, you may get even more ideas!

Check out UserGuiding for free to see how it can improve your product engagement. This feature-rich product adoption tool covers many things you will need throughout your product engagement journey.