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Tips to Measure Customer Loyalty

  1. 1. Tips to measure Customer Loyalty
  2. 2. Existing Customers Matter It’s 7x more expensive to acquire new customers Sources: “Fastest Way to Lose Customers.” KISSmetrics blog. Murphy, Emmet and Mark Murphy. Leading on the Edge of Chaos: The 10 Critical Elements for Success in Volatile Times. Did you know... decreasing costs by 10% A 2% increase in customer retention has the same effect as
  3. 3. Loyal Customers = Success Retention Enrichment Advocacy There are three ways to categorize customer loyalty: 1. 2. 3.
  4. 4. What is Retention Loyalty? A customer's willingness to Without these satisfied customers, there’s no base of customers making repeat purchases. remain because they value your product and/or service.
  5. 5. Measuring Retention Loyalty Customer Surveys Attrition Rate Customer Sentiment No single metric can measure retention, but a combination of these methods will help: 1. 2. 3.
  6. 6. What is Enrichment Loyalty? Measure customer satisfaction first, then take Driving repeat or additional purchases of a product and/or service advantage of upsell and cross-sell opportunities.
  7. 7. Measure customer spend year-over year Determine if spend per customer has increased or decreased The higher the increase, the greater your enrichment loyalty Measuring Enrichment Loyalty
  8. 8. What is Advocacy Loyalty? Customers who refer your business to others -- a powerful tool! On average, a business Source: Keck, Chad. “What is a customer recommendation worth?” Promoter.io. May 28, 2014. generates roughly 60% of its new customers from the recommendations of the existing customer base.
  9. 9. Measuring Advocacy Loyalty Measure what customers say they Net Promoter Score (NPS) Social Media Activity 1. 2. will do and what they actually do to promote your business using:
  10. 10. Drive Long Term Success Instill best practices that drive loyalty by Measuring key indicators Identifying loyal customers Tracking improvements over time 1. 2. 3.
  11. 11. Want more on CX? Download the Position Paper The Power of Customer Experience: Why Improving the Customer Experience is So Valuable (And How to Do It)

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Cloud Sherpas reviews the three different types of customer loyalty (retention, advocacy and enrichment) and shares tips on how to measure each one for your business.

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