What Are Some Metrics to Measure and Track Customer Loyalty?

Posted by Greg Keating on Jan 12, 2022 10:22:25 AM

Group meeting around a small table.

Increasing customer loyalty means your existing customers will become repeat buyers and generate new customers through positive word of mouth for your CPG brand. How do you know whether your efforts to increase customer loyalty are working? Here are some metrics you can use to benchmark and track your efforts.

Net Promoter Score

Promoters are your most loyal customers, who not only repeat buy but recommend your brand to others. The net promoter score is calculated by subtracting the percentage of promoters from the percentage of detractors, or dissatisfied customers, then multiplying by 100. A good net promoter score is typically anything above 0, with SurveyMonkey reporting that the mean NPS score in their research of 150,000 global companies is 44. 

Repeat Customer Rate

This metric is found by dividing total customers by the number that have made multiple purchases. If your repeat customer rate is low, you may need to increase your incentives for repeat buying, such as offering discounts through email or text. It is typically easier to get existing customers to buy again than to find new customers, meaning your advertising efforts will go further if you target existing customers than prospective new ones.

Upsell Ratio

The upsell ratio is the number of customers who added products to their cart after an offer or bought more than one kind of product in the same order. While it can be difficult to tell when an upsell takes place, there are ways to track purchases made in conjunction with ad campaigns or how many products offered at the time of sale were purchased with other products. 

Typing on a laptop.

Customer Lifetime Value

This is the sum total of everything a customer has ever bought from your brand and includes an estimate of future purchases as well. You calculate this metric by taking the average purchase value and multiplying it by the average purchase frequency. CLV can help show you what kind of customer acquisition cost might be reasonable, given the likely lifetime gain you can expect.

Customer Engagement Score

This metric can be measured in several different ways but gets at the engagement level of your average customer. Higher engagement levels lead to higher sales and repeat sales and are generally correlated with a higher customer lifetime value. 

The metrics that go into a customer engagement score can be the following:

  • Activity time--the amount of time a customer is active on your brand's website or other sales page.
  • Visit frequency--the number of times a customer visits your site or pages.
  • Core user actions--the customer performs actions that contribute to their use of your product or service, such as repeat orders, leaving positive reviews, and telling others about your brand and products.

For more help increasing your CPG brand's customer loyalty, download our free "Creating a Customer Loyalty Strategy for Your CPG Brand." For other aspects of CPG marketing, contact Hangar-12 or subscribe to our blog for more information about what we do.

Topics Loyalty Programs

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