| Engagement 2.0: Beyond Opens and Clickthroughs |
 These days, the concept of customer “engagement” is an increasingly hot topic for anyone who publishes content online, as well as for marketers and advertisers. What exactly engagement means and how it is measured is however still somewhat vague.
One of the original models for measuring engagement is the RFM model, which stands for Recency, Frequency, and Monetary. Basically, it is a quantitative way to measure and express a customer’s value to a company by measuring how recently the customer purchased, how frequently they purchase, and how much money they spend. Using this scheme, each aspect of the customer’s purchasing history is given a number from one to five, with five being the highest. These numbers are then shown as a 3-digit number, for example 541. This customer got the best recency score, a 4 for how frequently they purchase, but only a 1 for their Monetary score, meaning they don’t spend very much when they do purchase. This method of measuring customer engagement has been reasonably adequate over the years, until the advent of the Internet and its ability to measure and track consumer behavior electronically. The Internet heralded a new triad in customer engagement: the all-important clickthrough rate, open rate, and conversion rate. Clickthroughs are of course when a customer or reader clicks on a link; opens are opening an email; and conversions are the holy grail: a purchase. These three measurements represent the basic actions that marketers hope for and they do provide at least a rough measure of a customer’s engagement. But why stop there? In the ever-competitive world of marketing, when consumers are being bombarded electronically with ads and images, offers and deals, those marketers that can better understand what drives behavior and who can provide a better way to assess and quantify that behavior will find themselves with an edge over their competition. Enter the era of Engagement 2.0.
Today, a true measure of customer engagement must include behaviors besides opens and clicks. Even purchases, while a important number, do not tell the whole story. For example, what about forwards? If a customer gets an email that they like so much, that they feel so strongly about that they forward it to their entire email list, isn’t that worth something? Doesn’t that represent a truly engaged customer? Or take a customer who opens all your email but never makes a single purchase: he or she is not necessarily more engaged—or more valuable—than a customer who opens one-tenth of your email, but spends loads when they do. Conversely, if a customer opens your email and then unsubscribes from your list, well that’s a customer who you failed to engage. In the old scheme, the fact that they opened it generates a positive engagement score; the fact that they then unsubscribed is never captured.
As both marketers and consumers become ever more sophisticated, our models for representing and measuring consumer behavior must evolve as well. Any measurement is only as good as the components that go into it—and the relative weight given each. The better and more accurate those pieces of the puzzle are, the more accurate and meaningful the resulting “score” will be. So, if you are going to try to measure, the best marketers will ensure that they’re capturing data that’s complete, and this requires a new and much more complex model.
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