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This question is about customer loyalty statistics.
How do you calculate customer loyalty?
There are five crucial metrics than can help calculate customer loyalty. Not only do these metrics help calculate customer loyalty, but they can also help you determine the overall health of your business. They include:
Net Promoter Score (NPS). This is a simple tool that helps gauge customer satisfaction. Typically, the customer is asked to score the business on a scale of one to ten. However, customers are only considered "promoters" when they score nine to ten on the scale.
Repeat Purchase Rate (RPR). RPR is the percentage of customers who've returned multiple purchases. To find RPR, you simply divide the number of repeat customers by the total number of customers to find a percentage.
Customer Lifetime Value (CLV). Among other benefits, CLV will also inform you of the profit margin you can expect to earn over the course of your relationship with a customer.
CLV can be calculated by multiplying the average value of a sale, the average number of transactions, and the average retention period to find lifetime value, then multiplying that number by your profit margin.
Customer Loyalty Index (CLI). CLI is a tool for tracking customer loyalty over time and typically involves three questions:
How likely are you to recommend X to a friend/family member?
How likely are you to buy from X again?
How likely are you to try other products or services offered by X?
These questions are then answered on a scale of one through six, one meaning "very likely" and six meaning"not likely."
Customer Engagement Score (CES). As the name would suggest, CES helps businesses determine how engaged their customers are. To calculate it, inputs like activity time, frequency of usage, level of usage, number of actions taken, and key performance indicators are all assigned on a scale of one to ten.
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