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Jan 31, 2023


Global eCommerce


min read

5 Customer Loyalty Metrics to Focus On in 2023

Your customers are telling you how loyal they are. You just have to know how to measure customer loyalty. These metrics can help you increase your loyal customer base, forecast the future, and determine goals for improvement.

5 Customer Loyalty Metrics to Focus On in 2023

The customer should mean everything to you. Your customers are your most valuable asset. It doesn’t matter what business you are in or what products and services you offer. They are what drive revenues but retaining customers isn’t easy. The competition for loyal customers is stronger these days than ever. With a lower price and better customer service, you are more likely to win the race for customer loyalty. This is easier said than done. We live in a constantly changing environment. And what remains unchanged is customer loyalty. In the competitive e-commerce world, it is the long-term key to business success. Your happy customers would buy your products or services and come back again to buy some more. What’s more, they would also recommend your online shop to others. Increased revenue, high customer retention rates, improved brand awareness, and better customer acquisition are all correlated with customer loyalty. As you can see, customer loyalty is a beneficial emotional relationship between you and your clients. It’s a deep sense of connection and belonging. So, if you aren’t keeping your customers satisfied so that they keep coming back to you over and over again, you are wasting your marketing budget.  

But how do you know how loyal your customers are? Customer loyalty metrics can help you answer this question. But there is no one perfect loyalty metric that can provide you with all the information you need. Below we’ll go through 5 customer loyalty metrics that can help you understand your loyal customers better.

5 Customer Loyalty Metrics

“If you can’t measure it, you can’t manage it”

Peter Drucker

That is true when evaluating customer loyalty. Customer loyalty is an important thing to measure. It provides insight into how consumers perceive your company. By using the right metrics you can make better business decisions. Thus, you can increase retention and improve loyalty.

There are many different ways to measure customer loyalty. Not all of them are perfect and precise. But each one can provide you with a better understanding of how your customers feel about your brand and the products you sell. Measuring customer loyalty is tricky because loyalty is an emotion. But it is totally worth it, and it can set you apart from other competitors.  

1. Customer Retention Rate (CRR)

A hand with a magnet tries to attract clients

When it comes to this metric it all comes down to how well you can keep your customers. So, what is the retention rate? It is an important metric. It shows the number of clients that have continued to buy your products and services over time. You can learn a lot about what motivates customers to return to your online store by looking at your CRR. There is another reason why you need to calculate CRR. It can highlight areas where you can improve customer service. It can help you choose the best loyalty program for customer retention. This metric can help you reduce churn and boost loyalty. You can calculate it yearly, monthly, quarterly, or yearly.

Calculating CRR

[(E-N)/S] x 100


E – Number of existing customers at the start of the given period.

N – Number of customers at the end of that period

S – Number of new customers added

If your customer retention rate is 100%, you haven't lost a single client. A retention rate of zero means you lost every single one of them. A 50% retention rate wouldn’t be great, as the average B2B customer retention rate is between 76% and 81%.

USEFUL TIP: Delivering a great customer experience is one efficient method to boost retention. You must always communicate with your customers. You should understand their needs, and respond when they have issues. By providing a personalized customer experience you can increase customer loyalty and satisfaction. So, when you optimize customer experience, it benefits your online business. It shows that you value your customers. It displays that the services and products you are providing are relevant and useful.

2. Customer Churn Rate (CCR)

Churn rate vs retention rate. If the retention rate measures how a company has kept clients over time, the churn rate is the opposite. It is the number of visitors who abandon your website over a certain period of time. As an online store owner, it’s inevitable that you will lose some of your clientele in the process. To reduce churn rate you need to understand where your customers are losing interest. You need to figure out why they aren’t buying your products or services. That's where CCR comes in handy. Since customer retention is cheaper than acquisition, it’s important to decrease churn. Reducing churn will help you reduce risk. Churn rates are crucial since losing customers results in revenue loss.

Calculating CCR

(S-E)/S x 100


S – Number of customers at the start of the given period

E – Number of customers at the end of that period

As you can see, to determine your customer churn rate, you will only need two variables. You can measure CCR monthly, quarterly, and yearly. It is usually calculated monthly, but you can also calculate it on a daily basis. But to make your retention strategy work, you need to measure your CCR on a monthly basis. The lower the churn rate the better. A low churn rate means more revenue. The ideal churn rate would be zero but it doesn’t seem possible. It would mean your online business is not losing any customers. But the reality is that you would lose your customers for one reason or another. It is a part of the journey.

USEFUL TIP: As an e-commerce business owner, you should care about your website’s design. Usability and visuals are key elements to the lower customer churn rate. You need to make sure that your calls to action are clear. Pay attention to your product descriptions. They must be accurate and informative. Having a website that’s easy to navigate is a huge advantage. And sites speed can be an important factor for your customers to stay with you. What’s more, you need to make your e-commerce website accessible on every platform.

Suggested reading: "Visual Marketing"

3. Customer Lifetime Value (CLV)

Customer lifetime value and customer retention rate are both measurements of customer loyalty. They are indicators of the health of your business. But they are not the same thing. What is customer lifetime value? It is a metric that shows the amount of revenue a specific client has brought in for you over their lifetime as a customer. It is one of the best methods to measure customer loyalty for your company. You can make more informed marketing and sales decisions if you understand CLV. Plus, you can make better decisions about product development and customer support. Customer lifetime value and customer retention rate go hand in hand. As one goes up, so does the other.  

Calculating CLV

(Annual revenue per customer x customer relationship in years) – customer acquisition costs

Customers are more likely to be loyal when the CLV is higher. Poor customer service might cause your CLV to drop.

If you want to increase your customer lifetime value you can create a loyalty program. You can also invest in a good loyalty program app. If you have a Shopify store you might want to know what is the best Shopify Loyalty app. We’ve discussed it in the following article: "Best Shopify Loyalty App for Retention Marketing"

USEFUL TIP: Delivering a great customer experience for your existing customers should always be your top priority.

4. Repeat Customer Rate (RCR or RPR)

The repeat customer rate, also known as the repeat purchase rate is a simple yet effective customer loyalty metric. It measures the percentage of repeat buyers among your consumers. Repeat customer rate is a reliable sign of your customers’ brand loyalty. It shows how effective your retention strategies are. It is a more actionable metric when compared to customer retention rate or customer churn rate.

Calculating RCR

(Number of customers with more than one purchase/Number of total customers) x 100

As you can see, to measure your RCR you can use a simple equation. A high repeat purchase rate shows that you’ve got loyal customers. These people are more likely to buy from your website again and again. A repeat purchase rate of 30% is viewed as acceptable.

The average repeat purchase rates for e-commerce businesses are between 20 and 40 %

Anything below 20% can be a problem. A low RPR is a perfect indicator that your customers have had a bad experience with your brand.  

USEFUL TIP: To increase your RPR you need to ensure the best customer experience from beginning to end. You need to make sure that your products are of high quality. You should provide a stress-free shopping experience. And you can also offer your customers some good incentives. A discount for the next purchase or free shipping would be more than enough to make them come back for more.

5. Customer Satisfaction Score (CSAT)

Customer satisfaction score is an important business metric to track. It shows how satisfied your customers are with your company’s products or services at the moment of purchase, during onboarding, or after it. With surveys and feedback forms, a customer can express and rate the products or services. Your customers have all the answers you need. They are the ideal people to offer suggestions on how to boost your customer experience and increase loyalty. CSAT differs from other loyalty metrics. It is determined and conducted through surveys.

Calculating CSAT

(Total number of satisfied customers / total number of responses) x 100

The higher the score, the higher the customer satisfaction. A CSAT score is easy to understand. But despite its simplicity, it is not very precise and informative. It relies on self-report data. The answers may depend on someone’s mood or life events. Some of your satisfied customers may feel less motivated to take the survey.

USEFUL TIP: If you want to improve your customer satisfaction score you need to offer multichannel support. Your customers might prefer chatting, emailing, or using other social media sites for communication. Communicating with them through social media can boost customer loyalty.


Loyal customers are more likely to buy again. They help your business grow. They generate revenue. And if that’s not enough, they convert friends, relatives, and colleagues into customers. Customer loyalty is something you should focus on. It is a perfect indicator of your progress. That’s why you need to measure it. With the metrics above, you get a better sense of the level of brand loyalty surrounding your company. Find what suits you and your e-commerce business the most and makes your customers stay with you.

Frequently Asked Questions

Are Loyalty Programs profitable?

While there is no definitive answer, industry figures suggest a clear improvement in engagement rates and customer lifetime value. Keep in mind that points have a financial value that affects your bottom line. There is a balance between point value and their cost.

How much do Loyalty Programs cost to build?

It would require a lot of effort and time to build a loyalty program from scratch. There are services available that ready built programs that are more affordable and often more effective. They usually charge monthly subscriptions and can be stopped at any time. They are also segmented according to your business size or needs, making them accessible to small businesses. These apps usually take very little time to set up and can be up in running in a matter of minutes.

How do you install a Loyalty Program?

Loyalty programs usually have a short onboarding process that jump-starts your program. Afterward, you have unlimited access to an admin panel to control the details of your program. With Shopify all you need to do is install the app and follow the on-screen instructions. You should expect analytics, branding, emails and multiple other features when you install a loyalty app.

What should I expect with Loyalty Programs?

Loyalty Programs can take time to take effect, but they increase in utility as your member list grows. You can change up your strategy to gather members quicker or slower, depending on your needs. Loyalty programs are best used in combination with emails and rewards. Rewards can be used to motivate alternative actions like reviews or social media follows.


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