Cloud Blog – 6 key indicators to track customer loyalty

6 key indicators to track customer loyalty


Nowadays, it’s crucial that support agents regularly monitor customer engagement metrics. According to the Zendesk Customer Experience Trends Report 2022, 61% of customers will stop using your company’s services after one bad experience. To make your new customers loyal, you need to regularly cross-check your customer retention rates.

In this article, we will help you understand which metrics you should pay attention to first, how to calculate them and how to apply this knowledge to customer retention.


1. Customer Churn Rate

The churn rate is a ratio that shows the number of users who have stopped using your services. Determining this ratio is very simple. You need to know the number of clients at the beginning of the selected period and then the number of clients at the end of the same period. Knowing these two indicators, you can easily find out the churn rate using the following formula.

Knowing this metric is very important because if there is a high churn rate, the company will not be able to grow in the future. If your churn rate is really high, you should think about changing your sales agent strategy and focus on satisfying your customers.


2. Customer Retention Rate (CRR)

Another important metric is the customer retention rate. If the previous metric can determine how many clients stop using your services, but this metric will show what the retention rate of new clients is. In order to determine this metric, you will need to identify how many clients there were at the beginning of the selected period, how many at the end, and the number of new clients during the same period. Then give the calculation to a formula:

According to Bain & Company research, even a 5% increase in CRR can increase a company’s profits by 25%. That is why it is important to pay attention to this indicator.


3. Active users per day, week and month (DAU, WAU, MAU)

This metric will give an indication of how many active customers are interacting with your company over a specific period of time, namely per day, week or month.

Why is this metric important? You can use the results of the counts to compare metrics and determine how important your product or service is to the customer. It can also help you predict revenue.

To determine this indicator, you need to use the customer engagement data for a specific period (day and month) in the formula below.

4. Product Return Rate

The name of the indicator speaks for itself. This ratio gives an indication of what percentage of goods sold are returned after purchase. This ratio is applicable and is only important for companies that are solely involved in the sale of goods.

To calculate the product return rate, you need to use the number of products sold and the number of products returned to the formula below.

A high return rate can be a wake-up call for your company. If the PRR percentage is higher than the revenue percentage, you should seriously consider whether there is nothing wrong with your product. To be sure there is nothing wrong with your product, read customer feedback more often.


5. Time Between Purchases (TBP)

Time Between Purchase (TBP) shows how much time usually passes between your customer’s first and second purchase. First, let’s calculate your company’s purchase frequency (PF).

The number of orders (during the year) ÷ Number of unique customers (during the year) = PF.

Then, with this information, you can find out the time between purchases using the following formula.

This indicator will help you compare your time-to-purchase ratio with that of your competitors. A short time-between-purchase ratio will let you know that your product is fully satisfying your customer, while a long one will let you know that you need to improve your product or customer support.


6. Repeat Purchase Rate

This metric will give you an idea of what percentage of customers make a repeat purchase of your product or service. To measure this metric, you need to divide the number of repeat users by the number of customers in total.

This coefficient will also help you determine which segment of the customer makes repeat purchases from you. This way, you can better understand your target audience and also understand whether you are encouraging your customers and buyers.

Are you torn between Zendesk and Salesforce for your business operations? Our article comparing Zendesk vs Salesforce is your guide to understanding the nuances of each platform. Uncover insights into their capabilities, integrations, and find the perfect fit for your unique business needs.

Optimize processes for calculating customer loyalty rates

The process of calculating all of the above metrics and using them in your analytics can be a somewhat complex issue for your sales agents. To get ahead of all the important ratios that will help you improve your customer experience, you can use the Zendesk customer experience platform. Collect, analyze and update all the most relevant information relating to your customers in one convenient place.

Still have questions about calculating metrics, or want access to use Zendesk professional services? Then, contact the Cloudfresh experts with any questions. The Cloudfresh team is a unique center of expertise for Google CloudZendesk, and Asana. For these products, we can provide you with the following services:

  • Customization;
  • Development;
  • Integration;
  • Training;
  • License;
  • Support.

Our specialists will help you optimize your IT infrastructure, develop integrations for better system interoperability, and help create completely new structures and processes for your teams, while our support center will provide you with the best customer experience!

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