How to Measure Customer Centricity | 10 Simple Tips

Your Customer Centricity is measured with…

1. CUSTOMER CHURN RATE (CCR)

Determine the steady-state level of Customers a business will work with.

CCR = [(Customers Beginning of Month) – (Customers End of Month)] ÷ (Customers Beginning of Month)

2. CUSTOMER LIFETIME VALUE (CLV)

Calculate an upper limit on spending to acquire new Customers.

CLV = (Average Monthly Revenue per Customer) * (Gross Margin per Customer) ÷ (Monthly CCR)

3. CUSTOMER EQUITY

Get a broad view of how much Customer value your company is creating.

(Customer Equity) = (New Customers Acquired in the Period) * (CLV of Those Customers)

4. RETENTION COST

Take a snapshot of where your Customers fall within the Customer lifecycle status

(Retention Cost) = (Total Retention Costs) ÷ (Number of Customers Retained)

5. CUSTOMER RETENTION RATE

Measure the portion of Clients who remain Customers from the beginning to the end of a reporting period.

(Customer Retention Rate) = 1 – (Customers Lost in the Period) ÷ (Number of Customers at the Start of the Period)

6. WIN-BACK RATE

Re-activate Customers as they show signs of slipping away.

(Win-back Rate) = (Churned Customers Who Repurchase) ÷ (Churned Customers)

7. CONVERSION RATE

Determine the success of a Customer interactions.

(Conversion Rate) = (Interactions with Completed Transactions) ÷ (Total Sales Interactions)

8. RATE OF REFERRALS

Measures the portion of referral invitations sent that are accepted by the recipients.

(Rate of Referrals) = (Converted Referrals in the Period) ÷ (Total Referral Invitations Sent in the Period)

9. REPEAT CUSTOMER RATE

Discover whether a product or service inspires repeat purchases from Customers.

(Repeat Customer Rate) = (Customers That Have Purchased More Than Once) ÷ (Unique Customers)

10. NUMBER OF NEW VS. REPEAT SITE VISITS

Differentiate your website traffic and generate insights on prospective Customers.

(Number of New vs. Repeat Site Visits) = 1 – (Website Visits by New Visitors) ÷ (Total Website Visits)

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