What it means
Count the interactions on a post and divide by an audience number. The catch is that there are three audience numbers in common use, followers, reach and impressions, and nobody agrees which one to use, so the same post can honestly be reported at wildly different rates.
Why it matters to a small business
It is the number quoted at you when somebody wants to be paid: an influencer pitching a collaboration, an agency reporting a month, a platform selling boosts. Knowing that the denominator is a choice is what stops you paying a premium for a number somebody picked because it was the flattering one.
A post gets 90 likes, saves and comments in total. It reached 1,500 people, and the account has 12,000 followers.
90 over 1,500, against 90 over 12,000
6% by reach, or 0.75% by followers. Same post, same day, same 90 taps, and an eightfold difference in the headline.
The bit people get wrong
For most local businesses saves and shares are worth far more than likes, and lumping them together hides that. A save is somebody planning to come back to it. A share is somebody putting their own name to your recommendation. A like is a thumb moving.