Building your user engagement pyramid

By Angela, December 15, 2014

One of the first blog posts that Boris shared with me when I was starting out is “Don’t forget your logged out users” by Fred Wilson. Fred notes that with many social platforms, a huge number of their regular users don’t actually login because they are able to derive value from their services on a “logged out basis”. As a result, he advises entrepreneurs to build services for those users that lead to more engagement, ultimately motivating them to log in.

But what happens once someone logs in?

Fred describes the general 100/10/1 rule as applied to social platforms, where 1% of users will create content, 10% will engage with it, and 100% will consume it once they are logged in. This thinking inspired me to come up with a framework for a user engagement pyramid that I have been encouraging our portfolio founders to create for themselves.

Too often, we are presented with a collection of acronyms: LTV, CAC, ARPU, MRR, GMV, etc. While these metrics provide a high-level view of the business, we know that they are vanity measures, symptomatic of what is going on behind the scenes. Instead, I like focusing on the core factors that drive the KPIs above.

Take a few seconds to think about it. What is the most important number to your business? What is the user activity or behaviour that you consider to be a measure of your success?

What is the user engagement pyramid?

You can create one in two steps:

  1. At the top, place the activity that you determine to be a sign of someone who is most engaged with your product. Typically, this is the factor driving your most important metrics.
  2. Next, consider all the other activities that someone can do, and place them in decreasing order from what is the hardest / has the most friction for someone to do / requires the most energy, to what is easiest.

For example, if we were to take a social network like Facebook or Twitter, we might end up with something that looks like the diagram below (n.b. I’ve tried to present this in the most generic way possible). Social networks know that “user-generated content is king”: the most active users (creators) who post status updates, photos, or links are going to drive others to come to the platform time and time again. They also understand that creators continue to be inspired when they are recognized for their contributions via shares, comments, favourites, etc., for their posts. Given this positive feedback loop, it becomes clear that the goal of these social networks is to move a logged in user up the pyramid.

pyramid

 

How is this beneficial?

An engagement pyramid grounds your business metrics in something real. It drives home your ultimate user engagement and helps you develop the right processes to get there. By creating one, you can:

  • Determine whether the data you’re collecting is the data you actually need (i.e. a good sanity check).
  • Learn what your users are doing and what it means to be engaged. This helps you differentiate between user types, instead of simply grouping all DAUs and MAUs together as “logged in”.
  • See which activities are correlated with the highest level of engagement and then focus your efforts on getting those activities to happen. Note that not every user has to do every action (i.e. a user doesn’t need to comment on someone’s post in order to post their own content).
  • Rally your team, and agree on and align to your mission. This is a great team-building exercise to make sure everyone is on the same page.

Keep in mind this engagement framework can also apply to marketplaces and SaaS companies. For marketplaces, you will probably have two pyramids – one for the buyer and one for the seller – and for SaaS, the pyramid likely maps closely to the sales funnel. In all cases, the idea is to come up with the right framework to quantitatively analyze your user data effectively and efficiently.

I’d love to hear your thoughts and experiences on creating your own engagement pyramid. Feel free to share in the comments below.

  • Angela, useful and timely – Thank you!

  • atkingyens

    Thanks, Ann!

  • This is a nice way of thinking about it. I think it took us awhile to realize that user growth is our success metric, but not an actionable product development metric. An engagement pyramid like this can be a powerful tool for focusing the team on each part of the numbers in different phases.

    We make an in-browser code editor for teaching and learning that’s shareable on the web. Like a video, users don’t have to be logged in to run or edit the code. So, using your framework, the bottom of our pyramid is interacting with these Trinkets (what we call them & also our company name), and the top two are creating & sharing these code examples. Signups are somewhere in the middle.

    I actually think that having the bottom of your pyramid be something users can do without signing up is an important strategic move for most products. It’s certainly reduced friction for us. Thoughts on that?

  • atkingyens

    Thanks, Elliot. You make a great point. I agree that logging in doesn’t have to be at the bottom of the pyramid – you can certainly adapt this framework to include this action “somewhere in middle”. I suppose a more comprehensive engagement pyramid would include ALL behaviours (logged in or out). You could also create two pyramids – one for logged in users and another for logged out users, where the “tops” would be creating and sharing code examples, and signing up, respectively. In any case, the key takeaway for me is to appreciate that there is a certain level of friction associated with each behaviour, and to figure out (as you so elegantly put it) how it translate to an “actionable product development metric” 🙂

  • Great post. Thanks for sharing your insights

  • atkingyens

    Thanks, Marc! 🙂

  • This is quite similar to Charlene Li’s Engagement Pyramid from a few years ago: http://www.socialmediamodels.net/social-media-overview-models-category/the-engagement-pyramid/

    I’ve been using this to develop metrics around people who “consume” vs “create”

  • atkingyens

    Cool! Thanks for sharing as I haven’t seen this 🙂

  • Ahmad

    I have been successfully driven to engagement because of condensed and succinct nature of your insight. Thank you hehe

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  • Hey Angela. Really nice framework. Though, I have a question. For our marketplace that we are building once a user makes a booking, he can share it (meaning next level of engagement). However, a user gets to review his experience a day or two after the booking. So a user can review his experience without having shared the actual experience. So how do you incorporate these 2 engagement levels in the framework where one can happen without the other.

  • alexanderjarvis

    Some good thoughts. Thanks for this

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