From the course: Customer Insights and Consumer Analytics for Organizations: Concepts
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Loyalty
From the course: Customer Insights and Consumer Analytics for Organizations: Concepts
Loyalty
It's been shown that it can cause five times more to acquire a new customer purchase than to acquire a current customer purchase. Five X. That's a big number and it adds up. And over 60% of most company revenue comes from repeat business. So that's most of your revenue. So those are two reasons to keep an eye on customer loyalty and customer advocacy through your customer analytics practice. So let's break those down. Customer loyalty and repeat business. How do you measure it? Well, here are five ways. Number one, retention rate. What you do is you divide the number of customers who left over a certain period by the number of current paying customers at the end of that same period. Number two, churn. This is the measure of how many customers stopped using a certain product over a certain period of time divided by those customers that remain. So naturally, the higher your churn value, the more turnover you…
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