What is user engagement?
User engagement measures how actively and meaningfully users interact with a digital product, such as a website, app, or platform, over time. These meaningful interactions could be anything from clicks and visits to feature usage or any other event that’s specific to your product.
High user engagement is a sign that users are finding value in the product and are involved with it. This leads to increased retention and, ultimately, greater revenue.
What is an engagement loop?
Before creating your engagement strategy, you need a clear map of how your users should ideally move through your product to stay engaged.
This is what an engagement loop outlines. It's a theoretical model that shows how users progress through your product, making sure they get value in each and keep coming back for more.
It has five stages:
Exploration: Users land inside your product and explore it. Maybe they clicked an ad, got a referral, or found you through a search. At this stage, they're checking things out, seeing if your app's layout, features, or value prop actually make sense to them.
First value: The user completes a meaningful action and experiences real value from your product for the first time.
Ongoing value: The user continues to use your product, checks out other core and additional features of the product and continues to gain value over time.
Habit formation: Product usage becomes part of the user's daily or weekly routine without needing external reminders.
Advocacy: Satisfied users start inviting others, writing reviews, or sharing success stories, bringing in new users who start the loop again.
For example, through Dropbox's referral program, a user might receive an invite, upload files to sync across devices, develop a habit of accessing those files regularly, and then invite colleagues - who, in turn, repeat the cycle.
How to build a user engagement strategy
Once your engagement loop is in place, you can start building your engagement strategy. Here’s how you can do that.
Define your North Star Metric (NSM)
Start by anchoring your engagement strategy to a single, meaningful metric, the North Star Metric. This metric reflects the core value your product delivers to users and how that value contributes to your business growth.
To define your North Star Metric, think about the long-term goal of your product, the value it provides to users whether that's saving time, ensuring security, or enabling self-expression and then identify the specific outcome users consistently achieve when they successfully engage with your product.
Now, translate all that into a measurable behaviour or metric that is frequent, valuable, and tied to user retention or growth of your product.
In Dropbox's case, their vision and outcome is to simplify the way people work by making file storage, access, and collaboration effortless so they can store, access, and share files anytime, which improves productivity. So, their north star metric is the "Number of files actively shared or collaborated on per user per week." This captures both the value delivered to users (easy file sharing and teamwork) and the value that Dropbox gets (greater user engagement and revenue).
Define and align engagement KPIs
Once your North Star is defined, you need to define KPIs to support it. To define your engagement KPIs, break them down by the stages of your engagement loop: Exploration, First Value, Ongoing Value, Habit Formation, and Advocacy.
This will give you what engagement would look like for your user in each stage and will help you measure progress.
For example:
Exploration: Percentage of new users who engage with multiple core features during their first session. This shows initial understanding and interaction with key product functionalities.
First Value: Percentage of users who complete their first meaningful action within a set period. This marks the user’s first successful interaction with the product.
Ongoing Value: Percentage of users who continue to use core features regularly. This reflects the long-term usefulness of your product.
Habit Formation: Percentage of users still active after 30, 60, or 90 days. This tracks whether the product has become part of their routine.
Advocacy: Percentage of users who refer others to the product. This indicates user satisfaction and the likelihood of word-of-mouth recommendations.
Design engagement tactics for each stage
Once your KPIs are mapped, it's time to influence them. This is where targeted tactics come in. These are small interventions designed to drive movement at a specific stage of your loop. Each tactic should be laser-focused to drive one KPI and tailored to where the user is in their journey.
For example, you can offer a guided tour during the Exploration stage, encourage users to complete key actions quickly in the First Value stage, and send reminders to keep them engaged in the long run. Each tactic should target a specific KPI and help users progress in their journey.
Test the tactics and track results
Before scaling any tactic, you need proof that it works. Testing helps you avoid investing in tactics that have no meaningful impact. Each test should isolate one tactic and evaluate its effect on one KPI.
A simple testing flow looks like this:
Create a segment of users you’re going to test the tactic one.
Divide them into a test group and a control group. The test group experiences the new tactic, while the control group uses the product as usual.
Compare the results after a defined period.. If the test group shows a statistically significant improvement in the KPI, the tactic is a good candidate for refinement and expansion. If not, you can either tweak or discard it.
Let's say you have designed an in‑app checklist to boost the Exploration KPI (% of users exploring 2+ features). You pilot it with 10% of new users and compare their exploration rate against a similar holdout. After one week, the test group's rate jumps from 40 % to 60 %, a clear signal to roll it out more broadly.
Scale what works
Once a tactic proves its effectiveness in a test, you can implement it at scale. Start by expanding the tactic to all similar users before moving on to the entire user base.
You must also document exactly how it was implemented and all other aspects, like the copy, timing, and so on. Doing this for multiple tactics can also give you insights into more granular aspects of what works for you and what doesn’t. You can refer to these insights when planning new strategies for your product.
You must also conduct reviews every quarter to refine based on the new behaviour.
Some common reasons behind disengagement
Identifying what isn’t working for you is crucial. You must know the main reasons why your users stop using your product. Here are some common reasons why users might stop using your product and how you can fix them:
Poor onboarding
Some products overwhelm new users with too many steps, tutorials, or unnecessary information before delivering any real value. This can create confusion, as users might not know where to start or how to effectively use key features.
Simplify your onboarding using an action-focused approach. Let users interact with the product quickly, as Notion lets users jump straight into a blank workspace and explore templates without creating a team or filling out detailed info. For this, you can reduce form fields, avoid complex tutorials, and let users explore value naturally.
Chasing KPIs at the cost of user value
When your product optimizes for a North Star Metric (NSM) that doesn't align with real user value, the experience becomes skewed—pushing actions that look good on dashboards but don't serve the user. This erodes trust and creates friction for your users.
To prevent this, product teams must define metrics that reflect actual user value and align with their core engagement game. The lesson is clear: metrics must measure meaningful behaviour, not just superficial interaction.
Poor UI and UX
A confusing or unintuitive user interface (UI) can drive users away. When the layout is unclear or interactions feel unpredictable, users waste more time trying to figure out how to use the product than actually getting value from it. This frustration can lead them to doubt the product's reliability and ultimately abandon it.
To fix this, focus on creating a clean, simple, and consistent UI that makes navigation easy. Prioritize essential features and ensure the design aligns with user expectations. Regularly test the product with real users to identify pain points and refine the user experience based on their feedback, making sure the interface feels intuitive and pleasant to use.
Unclear or complicated pricing model
Users get frustrated when pricing is unclear, overly complex, or doesn’t justify the value they're getting from the product. If it's hard to understand what they're paying for or why it matters, they're likely to abandon the product before they even convert or right after their first payment cycle.
Use transparent pricing with clearly defined features. Show what users are paying for and align pricing with outcomes they care about. Avoid requiring credit cards for early access if it adds friction too soon.
Final thoughts
Building a user engagement strategy can feel a bit overwhelming at first. There's the engagement loop to figure out, KPIs to define, tactics to test, and metrics to track. On top of that, user behaviour keeps shifting, and products rarely stay the same for long.
The key is to keep it simple at the start. Pick one North Star Metric that reflects real value, break your engagement loop into stages, and assign one clear KPI to each. Then, test small changes, see what actually moves the numbers, and only double down on what works.
If there's one thing to remember from all this, engagement strategy is not set in stone. What drives engagement today might not be as effective tomorrow, so it's important to stay flexible, keep learning, and adjust your approach as needed.
