8 Metrics Every Customer-Centric Company Should Be Leveraging



As you no doubt know, becoming a truly customer-centric marketing organization is a multi-year journey that takes buy-in on differing levels throughout a company. One of the first, and most important, steps is agreeing on the key performance indicators (KPIs) that your marketing team will use to determine and continuously measure the level of success derived from your trans-formative efforts. Since you’re looking to become more customer-centric, it’s important that you rely on KPIs that compliment your new customer-centric marketing efforts. This is not to say that you should stop monitoring marketing metrics that are not customer-centric, like sales by product type or revenue generated by marketing channel. But maintaining a customer-centric approach requires a shift in view towards how individual customers are behaving over time, and how your organization can maximize the value of every customer relationship.

Executive Level KPIs

These give you a high-level view of the health of your customer base.

1) Customer Lifetime Value (CLV) Customer Lifetime Value (CLV) measures how much a customer is going to spend in the store throughout his or her relationship with it. It is the single most important metric for any customer centric organization.

CLV acts as a “weather vane” that indicates whether all that the marketing team is doing — investing across different acquisition channels, putting retention strategies in place to keep customers coming back — is resulting in more meaningful, profitable long-term customer relationships.

2) Customer Equity Customer Equity is the total value of all of the new customer relationships created in a given period. It’s equal to the number of new customers acquired in a given period, multiplied by the CLV of those customers.

Customer Equity provides a broad view of how much customer value your company is creating— and whether you are striking the optimal balance between quantity and quality of new customers acquired.

Managerial Level KPIs

In order to understand changes in CLV or customer equity— and take action on opportunities from the data— we need to drill into specific acquisition and retention KPIs, which we present here as Managerial Level metrics.

3) Acquisition: CLV by Channel What it is: A view of the CLV of customers acquired across different acquisition channels What you can do about it: Identify the channels that are bringing in your highest-value customers and consider investing more in these channels, while pulling back investment on channels that are bringing in lower-CLV shoppers.

4) Retention: Lifecycle Status Distribution What it is: A snapshot of where your customers fall within the customer lifecycle status What you can do about it: If you see significant shifts in the lifecycle status distribution of your customers, dig into additional retention triggers (Early Repeat Rate, Overall Repeat Rate, and Winback Rate) to identify segment-specific retention opportunities.

5) Retention: Early Repeat Rate What it is: What percentage of new customers have made a second purchase by a certain fixed point in time What you can do about it: Put cultivation triggers in place to educate new customers about your brand and drive repeat purchases.

6) Retention: Overall Repeat Rate What it is: What percentage of repeat customers go on to place another purchase within 60 days of their last order What you can do about it: Deepen your relationship with customers through a cross-sell strategy to introduce them to new categories based on what they’ve bought in the past.

7) Retention: Winback Rate What it is: The percentage of inactive or lapsed customers in a given period who were “won back” into making a purchase What you can do about it: Set up winback triggers to re-activate customers as they show signs of slipping away.

8) Retention: Leaky Bucket Ratio What it is: A metric showing the number of customers “lost” in a given period relative to the number of new customers acquired What you can do about it: Put an effective winback strategy in place to minimize the rate at which customers churn.

Moving Forward

It can seem daunting to embrace a new set of KPIs, especially if your organization already has a host of metrics in place to measure and track the effectiveness of your marketing efforts. But the KPIs outlined above are the single most important source of visibility into how your marketing strategies are creating and retaining customer value.

Placing CLV and Customer Equity front and center in the marketing dashboard — and understanding the impact that acquisition and retention strategies have on these metrics over time — is the first step towards aligning marketing efforts around customer centric marketing principles.


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