If your company made 10M in 2022 and 12M in 2023, your business is delivering a +20% YoY growth. This, however, 𝗗𝗢𝗘𝗦 𝗡𝗢𝗧 𝗜𝗠𝗣𝗟𝗬 that your business is doing well from a customer retention perspective, nor is your business healthy to scale in the long run.
Here are a few pointers to start diagnosing your business’s customer loyalty health score:
💡 What is the % of 12M generated in 2023 that is contributed by the customers who shopped in 2022? 💡
🔦 This number measures the % contribution of existing customers (customers retained in 2022) vs. new customers (newly recruited in 2023). As a health indicator, 𝗲𝘅𝗶𝘀𝘁𝗶𝗻𝗴 𝗰𝘂𝘀𝘁𝗼𝗺𝗲𝗿’𝘀 𝘀𝗮𝗹𝗲𝘀 𝗰𝗼𝗻𝘁𝗿𝗶𝗯𝘂𝘁𝗶𝗼𝗻 𝘀𝗵𝗼𝘂𝗹𝗱 𝗯𝗲 𝗺𝗼𝗿𝗲 𝘁𝗵𝗮𝗻 𝟲𝟬% 𝗶𝗻 𝘁𝗵𝗲 𝗹𝘂𝘅𝘂𝗿𝘆 𝗶𝗻𝗱𝘂𝘀𝘁𝗿𝘆.
💡 How many customers who shopped in 2022 returned and shopped again in 2023? 💡
🔦 This data is a measure of Customer Number Retention. 𝗧𝗵𝗲 𝗵𝗶𝗴𝗵𝗲𝗿 𝘁𝗵𝗲 %, 𝘁𝗵𝗲 𝗵𝗶𝗴𝗵𝗲𝗿 𝘁𝗵𝗲 𝗰𝘂𝘀𝘁𝗼𝗺𝗲𝗿 𝗹𝗼𝘆𝗮𝗹𝘁𝘆.
💡 How many customers that purchased in 2022 either retained or grew their spending in 2023?💡
🔦 A positive sign of customer loyalty is that not only do they come back to your business and spend, 𝗯𝘂𝘁 𝗮 𝘀𝗶𝗴𝗻𝗶𝗳𝗶𝗰𝗮𝗻𝘁 𝗻𝘂𝗺𝗯𝗲𝗿 𝗼𝗳 𝘁𝗵𝗲𝗺 𝗮𝗹𝘀𝗼 𝘀𝗽𝗲𝗻𝗱 𝗺𝗼𝗿𝗲 𝘃𝘀 𝘁𝗵𝗲 𝘆𝗲𝗮𝗿 𝗯𝗲𝗳𝗼𝗿𝗲!
