To measure the impact of customer retention, there are various KPIs measured. The most important retention KPIs are mentioned below.
- Customer Churn
Customer churns, also known as customer attrition are a measure of your customers leaving your company over a period of time. The higher the churn rates, the most likely your brand is failing to reach the right audience or to serve the right products and services.
- Revenue Churn
Revenue churn measures the loss in revenue over a period of time. It is an indicator that your customers are not making enough new and repeat purchases. Or the customers are not satisfied with your products.
- Repeat Purchase Ratio
The repeat purchase ratio is the measure of how many customers are making a repeat purchase from your brand.
On a scale of 0 to 100, a 100% repeat purchase ratio indicates that all the customers are making repeat purchases. The 0% repeat purchase ratio indicates that none of your customers are second-time purchasers.
Ideally, the repeat purchase ratio should lie between 25% to 35%.
- Product Return Rate
The product return rate is a retention metric that measures the ratio of the number of times a product is purchased but later returned or cancelled the product plan vs. the number of total purchases.
- Time Between Purchases
The time between purchases is the time taken by users to make another purchase. This time can be used to work on your timely marketing campaigns.
- Loyal Customer Rate
The loyal customer rate is the ratio of customers who have made purchases more than four times divided by the total number of unique users for the same time period.
- Customer Lifetime Value
Customer lifetime value is the measure of total revenue that a user generates for a brand over the entire time period of the customer-brand relationship.
- Days Sales Outstanding(DSA)
DSA is a metric that tells how many days for a company to collect its complete sales payments. Days sales outstanding are often measured on a monthly, quarterly, or annual basis.
- Net Promoter Score
A net promoter score is a measuring index to understand how likely a customer wants to recommend your products and services to others. It is measured on a scale of -100 to 100.
It measures customer's overall satisfaction and loyalty.