Metrics to track the health of returning customers

A customer recently asked how to track the health of returning customers.

There isn't one universal metric but if your most loyal segments are growing faster than the overall average (or defecting ones) that's a clear signal. You'd just need to figure out what loyal means to you.

In Repeat Customer Insights the Focus On: Who Are Loyal report lists two groups of customers as loyal:

1. VIPs are customers with 5s in all of their RFM scores.
2. Above Average Customers are customers with a 5 or 4 in each of the RFM scores. In other words, the top 40% for each score.

The data and the growth chart comes from the same historic data as the Customer Grid but using the 3-component scores (vs only 2-components in the Grid).

Another option is to track your Returning Customer Rate over time. This could be especially useful if you use multiple sales channels in Shopify as Repeat Customer Insights will measure and graph how each sales channel performs.

Returning Customer Rate alone won't be quite enough. You'd want to supplement that with monitoring overall revenue or orders per period. A drop in orders would be a sign of a problem that Returning Customer Rate wouldn't pick up.

Eric Davis