These days, everything is getting more expensive. That includes customer acquisition! In 2022, it cost $2.24 to acquire a new user. But in December 2019, apps spent just $0.97. To reduce your spend on customer acquisition, focus on creating engaged users! Users who engage stick around for longer – and spend more too. In this article, find out what being an engaged user means and how it helps you improve your user engagement strategy and gain loyal customers.

• Who is an engaged user?
• 4 types of user engagement (with examples)
• Why is an engaged user so valuable?
• The difference between user & customer engagement
• How to create an engaged user
• What affects user engagement?
• How to measure user engagement
• 4 actions that indicate an engaged user
• What is a good percentage of engaged users?
• How to improve user engagement?
• 4 common mistakes in user engagement
• FAQs

Who is an engaged user?

Put simply, engaged users have a deeper relationship with your product. In general, that means they are more active, and also more likely to stay loyal! An engaged user gets more value from your app but also reciprocates that value. For instance, by spending more money, and more often, referring friends or even partaking in social media campaigns!

4 types of user engagement (with examples)

User engagement is a wide umbrella. However, there are 4 key ways how users engage:

Contextual engagement: right place, right time

If a user is contextually engaged, that’s because your product is relevant to them. And you can easily achieve this through personalization. For example, a push notification with an offer based on their purchase history. In fact, 70% of consumers are more likely to engage with a company that better understands them!

Ease-of-use: a requirement for every engaged user

Before you even think about user engagement, your app experience should be smooth, and simple to understand. Don’t make your user jump through hoops! The best apps are easy to sign-up and engage with. In fact, you should be able to engage in 3 clicks or less!

Emotional engagement: here’s why I love this app!

When your content induces good feelings, people engage emotionally. They are chasing the next good feeling! To inspire this kind of user engagement, create a strong story or visuals to wow your users or make them laugh.

Social engagement: who’s with me?

A socially engaged user uses your product because it lets them connect with others. For instance, through a comments section. No doubt, social engagement is hugely powerful. In 2020, social apps attracted more weekly user engagement than any other category!

Why is an engaged user so valuable?

A high engagement score means that the user will stick around. And retention leads to financial success! Case in point – 90% of new users who engage weekly are retained on Day 30. The alternative, those who don’t engage weekly, see a mere 23% retention rate. Moreover, an engaged user generates more revenue. Research finds that the top 10% of app users spend 3x more!

The difference between user & customer engagement

In brief, customers are engaged users who have already made a commitment, such as a purchase, to your product. Whereas users can simply be casual visitors. So every customer is a user, but not every user is a customer.

User engagement measures how often people actively engage & interact with your app. On the other hand, customer engagement focuses more on the entire customer lifecycle. How often do they buy? What is their lifetime value? How loyal are they?

How to create an engaged user

User engagement requires big-picture thinking. That’s because it analyzes every action your users make! Starting from onboarding, users have hundreds of ways to interact with your app. For example: by following a call-to-action, clicking a share button, downloading content, or using certain features!

What affects user engagement?

Since user engagement encompasses everything, it can be challenging to narrow down what affects it. However, there’s one thing that always creates engaged users. And that’s a great user experience! In practice, you can facilitate user engagement with an intuitive user interface, a user journey that flows well, and simply by providing value.

How to measure user engagement

How do you distinguish an engaged user? Ultimately, that’s down to you and your goals! But these tried and tested user engagement metrics will come in useful:

#1 Daily/Monthly Active Users (DAU/MAU rate)

Daily active users / Monthly active users = DAU/MAU rate

Comparing your daily (DAU) and monthly active users (MAU) indicates how engaging your product is. For example, if you have 100 DAU, and 1000 MAU, your DAU/MAU rate is 0.1. In other words, 1 in 10 monthly users also engages daily.

#2 Stickiness ratio

DAU/MAU rate * 100 = %

Take the DAU/MAU Ratio one step further! The stickiness ratio reveals how much-repeated user engagement you generate. In general, a score of 20% is good. Still, the sky is the limit! The world’s top apps like Instagram have a stickiness ratio of 50%.

#3 Session duration

Duration of all sessions / Number of sessions = Average session duration

This calculates the time a user spends on your app. A related metric – and one you want to keep as low as possible – is bounce rate, when users quit fast after opening.

#4 Churn Rate

(Customers who left in time period / Total number of customers) * 100 = %

More than anything else, a high churn rate indicates your user engagement strategy isn’t working. Conversely, a low churn rate is a sign of engaged users and a profitable business! Even a modest 5% reduction in churn can boost profits by as much as 25-95%!

4 actions that indicate an engaged user

How users engage depends on their place in the customer journey. In short, that means you should personalize your user engagement strategy depending on the actions users take. Starting from the top, here are 4 ways users can engage:

• Discovery. This is the first stage of an engaged user. In practice, users might scroll through your app’s dashboard or trawl through reviews of your product.
• Trial. In short, users are trying your product out. This is an extension of discovery, although here the user has made a conscious choice to engage.
• Frequency. In other words, repeated use! This shows the user is getting value from the product, giving them a reason to engage.
• Advocacy. Users who advocate for your product are your most valuable! Some examples of user engagement here include user referrals and writing a review.

What is a good percentage of engaged users?

A user engagement rate between 1-5% is considered good. Of course, not every user will become an engaged user. Indeed, nearly 95% of your users churn by Day 30. Ideally, you want your engaged users to at least cover the costs of acquiring those who churn!

How to improve user engagement?

Gamification can build that great user experience! In fact, studies show that gamified apps enjoy a 54% rise in free trial usage. Basically, gamification creates engaged users by incentivizing user engagement with fun features like badges, points, and rewards. Based on behavioral science, there are 4 powerful gamification mechanics:

1. A competitive and social UX. People are highly motivated by social influences!
2. Progress that is clear and visible. This fulfills the user’s need for growth and achievement.
3. Rewards for participation. Studies show this triggers activity & leads to long-term user engagement.
4. Winning is easy to understand. Simplicity is engaging. A great story that adds all these elements into one cohesive user journey will help you stand out!

For instance, when Fitbit implemented a leaderboard, average daily steps jumped 15%!

Create more engaged users! Check out how StriveCloud’s app gamification software can grow your active user base by 350%!

4 common mistakes in user engagement

#1 Long loading times

53% of users will abandon an app if it takes longer than 3 seconds too to load. But waiting can be fun! Good loading screens have something called “operational transparency”. In short, show your users what’s taking so long! While bad loading screens make a user churn in just 25 seconds, studies show that good loading screens can engage users for 55 seconds!

#2 Ineffective onboarding

Bad onboarding can instantly kill user engagement. After all, it’s your first impression! Most apps fail at onboarding, that’s why 75% of users quit on Day 1 after installation. To build better onboarding, incentivize user engagement with gamified progress bars, rewards, and checklists.

#3 Intrusive ads or pop-ups

Ads are a common way to monetize your app. But there’s a limit! In fact, 50% of users uninstall apps due to intrusive advertising. Essentially, ads themselves aren’t the problem – just avoid them getting in the way of your app’s ease of use.

#4 Lack of rewards

Your users want to be recognized for their engagement. So why not use rewards? Every time users complete a certain action, give them some sort of reward! It creates a positive feedback loop that keeps them coming back! Studies show that you can create an engaged user by making them earn status, rewards & achievements.

FAQs

Who is an engaged user?

Put simply, engaged users have a deeper relationship with your product. In general, that means they are more active, and also more likely to stay loyal! An engaged user gets more value from your app but also reciprocates that value. For instance, by spending more money, and more often, referring friends or even partaking in social media campaigns!

What’s the difference between user & customer engagement?

User engagement measures how often people interact with your app. In contrast, customer engagement focuses on the entire customer lifecycle, starting from the first purchase. So, every customer is a user, but not every user is a customer.

How to improve user engagement?

Studies show that gamified apps enjoy a 54% rise in free trial usage. Basically, gamification creates engaged users by incentivizing user engagement with fun features like badges and rewards. For instance, when Fitbit implemented a leaderboard, average daily steps jumped 15%!