Blog Viewer

5 Customer Retention Metrics for CX Leaders To Track


Loyal shoppers are the backbone of any successful business, and while customer churn is a common issue, it’s one that you can solve. By paying attention to the right customer retention metrics for ecommerce, you will be able to determine how your team is succeeding and where there are areas for improvement in order to keep valuable shoppers happy.

What Are Customer Retention Metrics?

Customer retention metrics indicate how your brand is properly nurturing customers and whether there are gaps in your customer service that could be causing churn. Customer retention metrics, such as customer retention rate, customer lifetime value, and repeat purchase rate, also reveal future opportunities for growth across your business.

5 Customer Retention Metrics You Should Be Tracking

Selecting the right metrics provides your team with the best possible insight into the health of your customer relationships and offers the opportunity to repair potential service gaps. Use the following formulas to supercharge your customer experience and maximize your team’s potential.

1. Customer retention rate

The top metric on any CX leader’s mind should be customer retention rate. Calculating customer retention rate allows you to understand how well your team is keeping customers over time. This can either offer insight into what you’re doing well or reveal where changes could boost your customer service.

Formula: (Customers at the end of the period) – (new customers acquired) / customers at the start of the period

Additional resources: The better your customer service, the better your retention. Try tracking these meaningful customer service metrics to ensure you’re doing everything you can to keep customers.

2. Monthly customer churn rate

Poor customer service is a main reason for customer churn, with 42% of customers who have two bad experiences leaving for a competitor. Tracking customer churn rate gives you insight to potential gaps in your customer experience that, when fixed, may lead to increased retention and revenue.

Formula: (Number of customers at start of month – number of customers at end of month) / number of customers at start of month

You can also quickly track customer churn over a year with this common formula for annual churn rate.

Formula: (Number of customers at beginning of the year – number of customers at the end of year) / number of customers at start of year

Additional resources: To gather the data you need to calculate customer retention rate, view all your metrics in one place with Gladly Insights.

3. Customer lifetime value

Calculating customer lifetime value shows you how much you can expect customers to spend with you throughout the course of their relationship to your brand. It also helps you understand how often your customers purchase products, providing insight on how to increase purchase rate over time.

Formula: Customer lifetime value = customer value x average customer lifespan (customer value = average purchase value x average number of purchases)

Additional resources: Boost your customer’s lifetime value by using Gladly SMS and email to send personalized incentives that fit each shopper’s needs.

4. Net promoter score

The Net Promoter Score (NPS) places a quantitative value on your brand’s perceived loyalty. It’s a measurement of how likely a customer will recommend your business based on a scale of one to 10.

  • Promoters are shoppers who answer from nine to 10
  • Brand detractors are those who answer below seven

Formula: Percentage of Promoters – percentage of Detractors

Additional resources: Calculating your NPS is one thing, but gathering feedback effectively is another challenge. You can get the most out of your customer satisfaction scores using tools like Gladly Insights and Answers.

5. Repeat purchase rate

Repeat purchase rate measures the percent of your customers who make repeat purchases out of your total customer base. This metric shows how well your marketing and customer service teams are engaging with and driving customers to return again and again. In addition to high-quality product offering and targeted marketing, radically personal customer service is crucial in getting customers to return to your brand over and over.

Formula: Number of customers who have purchased more than once (in a time period) / total number of customers (in a time period) x 100

Additional resources: Customers are more likely to make repeat purchases when they talk to friendly contact center staff who are trained in upselling. Increase customer interaction quality by tracking contact center metrics in addition to customer retention metrics.

Supercharge Your Service With Customer Retention Metrics

Customer retention metrics create opportunities to boost CX strategies and craft a more personalized experience for your shoppers. Through Gladly, leaders have access to all customer service data in one place. Our Customer Details feature a full understanding of your customers’ behaviors to empower your team and enhance every interaction.

Now that you know what to measure and how, you can improve your customer retention. Learn how to enhance your customer service with the right tools and tactics.