The complete guide to measuring customer engagement. Learn the formulas, benchmarks, and strategies behind the 20 metrics that predict retention, expansion, and lifetime value.
Why Engagement Metrics Matter
Engagement is the precursor to retention, and retention is the precursor to revenue. These metrics translate user behavior into business outcomes.
The Engagement To Revenue Chain
Engagement metrics are leading indicators. They predict what will happen to your financial metrics before the damage or opportunity shows up in your P&L.
- 1Activation: user reaches first value moment (Time to Value).
- 2Habit: user returns repeatedly (Stickiness, DAU/MAU).
- 3Depth: user adopts core features (Feature Adoption Rate).
- 4Advocacy: user recommends to others (NPS, Social Engagement).
- 5Expansion: user upgrades or buys more (NRR, Expansion MRR).
Leading Versus Lagging Indicators
The power of engagement metrics is that they give you time to act. By the time churn shows up in your financials, it is too late.
- →Leading: Session Duration, Feature Adoption, TTV, DAU.
- →Lagging: Churn Rate, NRR, LTV, Revenue.
- →Sentiment: NPS, CSAT, CES bridge the gap.
What Customer Engagement Really Means
Customer engagement measures how actively and meaningfully customers interact with your business over time. It includes behavior across marketing, product usage, sales touchpoints, and support.
Engaged customers:
- Use your product or service regularly
- Respond to communication
- Explore features or content
- Reach value faster
- Stick around longer
Engagement is the bridge between acquisition and retention. If engagement drops, churn usually follows.
The 20 Customer Engagement Metrics
Filter by category and click any metric to see the formula, benchmarks, and strategic analysis.
What It Measures
Why It Matters
Formula
Benchmarks
Watch Out For
Stickiness And Activity Calculator
Enter your DAU and MAU to calculate your stickiness ratio and see how you compare to benchmarks.
Revenue Retention And Lifetime Value Calculator
Calculate your Net Revenue Retention, Customer Lifetime Value, and see the financial impact of engagement.
Building A Customer Health Score
The most sophisticated organizations synthesize multiple metrics into a single composite score that predicts retention and guides intervention.
The Composite Formula
A health score is a weighted sum of behavioral signals tailored to your product. Each event is weighted based on its correlation with retention.
- w1Login Frequency: how often they engage.
- w2Feature Usage: depth of adoption.
- w3Support Tickets: can be positive (engaged) or negative (struggling).
- w4Days Inactive: recency of engagement.
Score Based Segmentation
The score drives automated workflows and prioritizes customer success intervention.
- 80+Healthy: upsell candidates. Request referrals and case studies.
- 50-79Stable: nurture required. Drive deeper feature adoption.
- <50At Risk: immediate intervention. CSM outreach within 24 hours.
Automated triggers can alert your team when a score drops below a threshold, enabling proactive engagement management instead of reactive churn prevention.
Health Score Simulator
Adjust the sliders to see how different behaviors affect the health score.
Status: Stable (Nurture Required)
Quick Reference: All 20 Metrics
A summary table with formulas and typical benchmarks for quick lookup.
| # | Metric | Category | Formula | Benchmark |
|---|---|---|---|---|
| 1 | DAU/MAU Ratio | Stickiness | (DAU ÷ MAU) × 100 | 13% SaaS, 66% Social |
| 2 | Daily Active Users | Stickiness | Unique users with session in 24h | Context dependent |
| 3 | Monthly Active Users | Stickiness | Unique users with session in 30d | Context dependent |
| 4 | Avg Session Duration | Stickiness | Total session time ÷ Sessions | 1m 17s SaaS sites |
| 5 | Time to Value | Value | Date of value event - Start date | As low as possible |
| 6 | Product Adoption Rate | Value | (Active users ÷ Sign-ups) × 100 | Varies by funnel |
| 7 | Feature Adoption Rate | Value | (Feature users ÷ Active users) × 100 | Target sticky features |
| 8 | Customer Retention Rate | Retention | ((End - New) ÷ Start) × 100 | 90%+ Enterprise SaaS |
| 9 | Customer Churn Rate | Retention | (Lost ÷ Midpoint customers) × 100 | <5% monthly ideal |
| 10 | Revenue Churn Rate | Retention | (Lost MRR ÷ Starting MRR) × 100 | <2% monthly ideal |
| 11 | Net Revenue Retention | Retention | ((Start + Expand - Churn) ÷ Start) × 100 | 100-120%+ |
| 12 | Expansion MRR Rate | Retention | (Expansion MRR ÷ Starting MRR) × 100 | Higher = better |
| 13 | Customer Lifetime Value | Retention | ARPU ÷ Churn Rate | LTV:CAC > 3:1 |
| 14 | Average Revenue Per User | Retention | Total Revenue ÷ Active Users | Should grow over time |
| 15 | Net Promoter Score | Sentiment | % Promoters - % Detractors | 30+ good, 50+ excellent |
| 16 | Customer Satisfaction | Sentiment | (Positive ÷ Total responses) × 100 | 80%+ |
| 17 | Customer Effort Score | Sentiment | Sum of ratings ÷ Respondents | Higher = easier (good) |
| 18 | Unique Visitors | Reach | Count of distinct user IDs | Growth trend matters |
| 19 | Bounce Rate | Reach | (Single page visits ÷ Entrances) × 100 | 40-60% typical |
| 20 | Social Engagement Rate | Reach | (Interactions ÷ Followers) × 100 | 1-5% typical |
Turning Metrics Into Action
Metrics only matter if they change behavior. Use them to:
- Identify drop-off points
- Improve onboarding flows
- Optimize feature discovery
- Refine messaging and timing
- Prioritize roadmap decisions
Focus on directional movement, not vanity numbers.
Engagement Measurement Maturity Assessment
Answer five questions to evaluate how mature your engagement measurement practice is and get recommendations for improvement.
How Do You Define An Active User?
Do You Track Time To Value?
How Do You Measure Retention And Churn?
Do You Have A Customer Health Score?
How Do You Collect Sentiment Data?
Your Engagement Measurement Maturity
Turn Engagement Data Into Revenue
Start with the metrics that matter most for your stage. Early stage companies should focus on activation and TTV. Growth stage on stickiness and feature adoption. Mature companies on NRR and expansion. The goal is not to track everything but to track what predicts your financial outcomes.
Explore All 20 Metrics
