Product Management 101: Product Engagement

Are your users actually finding value in your product? Sure, you might be able to say anecdotally whether they are or they aren’t. But as a data-driven PM, you want to be able to quantify product engagement. After all, if your users are engaging with your product on a regular basis, chances are your product is doing its job — helping your users solve problems, manage challenges, and complete high-priority tasks.

What is product engagement?

Product engagement is a measure of how your users are interacting with your product. Typically, it’s thought of in terms of three different factors: breadth, depth, and frequency. Breadth refers to the “amount” of your product the average user engages with. Are they just utilizing a handful of features, or are they making use of most of the product’s functionality? Depth is a representation of how “embedded” users are with specific aspects of your product. Do they use the same features day-after-day, or only sparingly? The third factor, frequency, refers to “stickiness,” or how often users return to your product.

How is product engagement measured?

Different organizations measure product engagement in different ways. Some use measures of customer satisfaction, such as NPS, CSAT, or churn, as a proxy for overall product engagement. Others focus on either breadth, depth, or frequency metrics. For example, a company might rely on feature adoption (a measure of breadth) as their product engagement measurement. Still others build their own custom engagement metrics.

One metric that is growing in popularity, however, is the product engagement score or PES. PES is the average of three factors that reflect users’ level of interaction with your product. The first is adoption, or the average number of Core Events adopted across all active visitors or accounts. The second is stickiness, which is the average of the percentage of weekly active users who return daily (DAU/WAU), or the percentage of monthly active users who return daily (DAU/MAU) or weekly (WAU/MAU). The third is growth, calculated as the sum of new and recovered accounts or visitors divided by dropped accounts or visitors (also known as the Quick Ratio).

Once you know your adoption, stickiness, and growth values, simply enter them into this formula to get your PES: (Adoption + Stickiness + Growth) / 3.

How can I improve my product engagement?

Since product engagement is a combination of product breadth, depth, and frequency, tactics that positively affect one of these factors (or even all three) will impact engagement. For example, a team looking to increase product engagement might make improving feature adoption a high priority. To that end, they may design a series of in-app tooltips that drive users to valuable but underused features. Or they may decide to sunset features that users generally ignore. Alternatively, the company may double down on improving retention. Key components of this strategy would likely include extensive user research and requests for feedback. On the frequency side, investments in onboarding can make a huge difference. The faster your users see value in your product, the more likely they’ll be to come back again and again.

Recommended reading

“Product engagement: the most important metric you aren’t tracking for your SaaS business” by Derek Skaletsky

So, you’ve decided to create a product engagement score for your SaaS product. This article from Intercom takes you through the four steps to crafting the perfect engagement metric that’s tailored to your organization’s specific needs.

“Introducing the Product Engagement Score” by Brian Crofts

How did the team at Pendo develop the product engagement score? In this blog post, Pendo CPO Brian Crofts explains the reasoning behind the methodology and the path to creating PES.

“How to measure if users love your product using cohorts and revisit rates” by Andrew Chen

Cohorts and revisit rates can also act as measures of product engagement. In this blog post, investor Andrew Chen discusses why and how you might use these metrics as a way to quantify whether users “love” your product.

“The Pros and Cons of NPS Alternatives” by Natalie Doan-Dunnum

While NPS is a widely-used customer satisfaction metric, it’s certainly not the only one. This article goes through some of the most popular NPS alternatives, including product engagement, and a list of their strengths and weaknesses.

“Measuring user engagement” by Tomer Sharon

Just about every product team makes some mistakes on their journey to effectively measuring product engagement. This article lists three of the most common ones and how to avoid them.

Product Engagement Assessment

Ready to assess your product engagement? Take this fun interactive quiz from our friends at Pendo.