Currently people still seem to be banding the term around and trying to find a definition for it so they can impress their bosses. So here it is.
Measuring engagement is the process of segmenting your customer base by the activities they perform and counting how many customers fall into each segment.
There, that wasn't so hard was it?
The key issues so far with engagement has been similar to those that have bedevilled other terms in the online arena, simply that for different websites, different things will be positive and negative. Examples of this would be "stickiness" and "Time spent on site" for which an increase in either can be a positive or negative metrics depending on the goal of the site.
So why has engagement hung around and is it really different as a concept to anything else before it?
I dont think its new in marketing but one thing I would say is that it is something new for the web analytics vendors out there and thats why its creating a buzz.
On the whole the web analytics vendors are still used to dealing with metrics based on site activity - X many visits to this section, Y number of purchases in that category etc. What they are not used to is measuring things from a customer or user perspective and thats what engagement is all about. For example, knowing that you get 12 leads in 100 visits is not the same as knowing that you have two customers who provided 6 leads each.
So lets look at that definition again.
Measuring engagement is the process of segmenting your customer base by the key activities they perform and counting how many customers fall into each segment.
Lets hit the main problem head on. The activities you chose to measure within engagement will depend on your site, your goals and your business - I cannot tell you them, other than to say you will probably have defined what these should be in previous discussions regarding the equally vague "success events".
Next problem is how do you segment your user base? Well again, you can do all sorts of clever stats involving dozens of metrics and fancy algorithms talking about "distance from cluster centres", "neighbourhoods of attraction" etc. here but lets keep it simple.
You could for a given key metric
a) Set some arbitrary thresholds up, such as "any customer who posts more than 3 times is call an engaged user"
b) Look at the spread of activity and split customers into significant groups such as "we have a 100 customers who post anywhere between 0 and 100 times a month, lets sort the customers by their posting activity and split those customers into quartiles (4 equal groups) and then see what the thresholds exist and label the groups Highly engaged, Quite engaged, Slightly engaged and Not engaged at all" - (note if this example were real I would probably have a separate segment for all those customers who never post and then split those who posts between 1-100 times into the quartiles)
If you have multiple metrics, then simply add them together for each individual customer creating a score and then again chose approach a) or b).
Once you have your groups defined and labeled what next? Yes, the counting. Essentially, over time you need to see whether more customers are falling into the higher "engaged" segments. If they are, then great! They are more engaged and you have succeeded! If they haven't then you need to look at what things you can do to encourage customers to move up into a more valuable segment.
The next step after measuring engagement would be to look at "engagement over time" which essentially means tracking customers as they move from one segment to another and trying to see whether you can define their expected engagement over their complete customer lifetime.
The key thing is "engagement" is all about measuring things from the user perspective, not the site. This is something understood in other areas of customer analytics but we are still waiting for some bright spark to realise this and market it under some other clever buzzword (like "personas") and then for the web vendors to catch up.
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