Top Customer Metrics to track

Top 50 Digital Marketing Metrics Part 6: Customer Metrics


At the end of the top 50 digital marketing metrics blog series, here we have the last blog lined up – Customer Metrics.

If you are new to the series, please read our previous blogs for a better understanding – Website Traffic Metrics, Search Engine Optimization (SEO) Metrics, Paid Advertising (PPC) Metrics, Email Marketing Metrics, and Social Media Marketing Metrics.

Customer metrics are not only essential in digital marketing but also for businesses to measure and improve their performance in meeting customer expectations by gaining valuable insights into their customers’ needs and preferences.

Studies have shown that customer-centric companies outperform their competitors in terms of revenue growth and profitability.

In fact, according to Harvard Business Review, increasing customer retention rates by just 5% can increase profits by up to 95%.

Moreover, customer metrics & KPIs can also help businesses identify areas for improvement in their customer service and overall customer experience.

By analyzing customer feedback and complaints, companies can make necessary changes to their products or services and ensure they are meeting their customers’ expectations.

To illustrate the importance of customer metrics, let’s take the example of Amazon. Amazon’s success can be attributed in part to its focus on customer metrics such as customer satisfaction, which is measured through its Net Promoter Score (NPS).

Amazon’s NPS consistently ranks among the highest in the industry, which is a testament to the company’s commitment to providing exceptional customer service.

In this blog, we will explore the different types of customer metrics, how to measure them, and their importance in digital marketing to improve the customer experience.

So, let’s dive in and discover how customer metrics can help your business thrive in today’s customer-centric marketplace.

Part – 6: Customer Metrics

  • Customer Lifetime Value (CLV):

Customer lifetime value (CLV) is a metric that estimates the total value a customer will bring to a business throughout their relationship.

It is an important metric for businesses to track as it helps them understand the long-term value of their customers and can inform decisions around customer acquisition, retention, and marketing strategies.

To calculate CLV, businesses need to consider factors such as the customer’s purchase history, average order value, frequency of purchases, and expected retention period.

For example, if a customer typically spends $50 per purchase and makes three purchases per year, their annual customer value is $150. If the average customer retention period is five years, their estimated CLV would be $750.

By understanding the CLV of their customers, businesses can make more informed decisions around customer acquisition and retention strategies.

For example, you may decide to invest more in retaining high-value customers or focus on acquiring customers with higher potential CLV.

CLV can also help businesses evaluate the effectiveness of their marketing strategies. For instance, if a business spends $50 to acquire a new customer with an estimated CLV of $750, then that investment would likely be considered worthwhile.

Furthermore, CLV can be used to identify opportunities to increase revenue from existing customers. For instance, a business may identify that customers who purchase a specific product tend to have a higher CLV.

The business can then create successful digital marketing campaigns to promote that product to existing customers to increase their overall CLV.

  • Customer Retention Rate:

Customer Retention Rate (CRR) is a critical customer metric that measures the percentage of customers who continue to do business with a company over a specific period.

CRR is essential for companies to understand the value of their customer base and the effectiveness of their customer retention strategies.

The formula for calculating CRR is:

CRR = ((E-N)/S) x 100


E: The number of customers at the end of the period

N: The number of new customers acquired during the period

S: The number of customers at the start of the period

For example, if a company had 100 customers at the start of the quarter, acquired 20 new customers during the quarter, and ended the quarter with 110 customers, the CRR would be: ((110-20)/100) x 100 = 90%

This means that the company retained 90% of its customers during the quarter.

CRR is crucial for businesses because retaining customers is typically less expensive than acquiring new ones.

According to Harvard Business Review, increasing customer retention rates by 5% can increase profits by 25% to 95%. Therefore, CRR is an essential metric for businesses to monitor to ensure they are effectively retaining their customers.

To improve CRR, companies can implement various strategies, including improving customer service, providing loyalty programs, and offering personalized experiences.

By implementing these strategies, companies can increase customer satisfaction and loyalty, leading to improved customer retention rates.

  • Customer Satisfaction Rate:

The customer satisfaction rate is a metric that measures the level of satisfaction customers have with a product or service offered by a company.

This metric is crucial for any business since customer satisfaction can directly impact customer loyalty, retention, and revenue.

A satisfied customer is more likely to make repeat purchases, recommend the product or service to others, and leave positive reviews.

The customer satisfaction rate is usually measured through surveys that ask customers to rate their satisfaction on a scale of 1-10 or through open-ended questions that allow customers to share their feedback in their own words.

The data collected from these surveys can be used to calculate the percentage of customers who are satisfied with the product or service, which is the customer satisfaction rate.

For example, if a company sends a customer satisfaction survey to 100 customers and 80 of them respond with a satisfaction score of 8 or above, then the customer satisfaction rate would be 80%.

Businesses can use customer satisfaction rates to identify areas for improvement, make changes to products or services, and increase customer loyalty.

By measuring customer satisfaction rates regularly, companies can monitor changes in customer satisfaction over time and take necessary actions to maintain or improve it.

  • Net Promoter Score (NPS):

Net Promoter Score (NPS) is a customer metric that measures the likelihood of customers recommending a product or service to others. It is a simple and effective way to gauge customer loyalty and overall satisfaction with a company.

NPS is measured through a survey that asks customers a single question: “On a scale of 0 to 10, how likely are you to recommend this product or service to a friend or colleague?”

Based on the responses, customers are classified into three categories: Promoters (score 9-10), Passives (score 7-8), and Detractors (score 0-6).

The NPS is then calculated by subtracting the percentage of detractors from the percentage of Promoters.

For example, if a company surveyed 100 customers and received responses as follows: 50 Promoters, 30 Passives, and 20 Detractors, the NPS would be calculated as follows:

NPS = (% Promoters – % Detractors) = (50% – 20%) = 30

The NPS ranges from -100 to +100, with a score of 0 indicating that the number of Promoters and Detractors is equal.

A high NPS score indicates that a business has a high proportion of loyal customers who are likely to recommend the product or service to others. This, in turn, can lead to increased customer retention, revenue, and growth.

On the other hand, a low NPS score indicates that the business has a significant number of dissatisfied customers who may not only stop using the product or service but also discourage others from using it.

Businesses can use NPS to identify areas for improvement and take necessary data-driven actions to increase customer loyalty and satisfaction.

  • Referral Rate:

The referral rate is a customer metric that measures the percentage of customers who refer your business to others.

It is an important metric as it reflects the level of customer satisfaction and loyalty towards a business and its ability to generate new business through word-of-mouth marketing.

To calculate the referral rate, divide the number of customers who referred to your business by the total number of customers and then multiply the result by 100.

For example, if a business has 100 customers and 10 of them refer the business to their friends or family, the referral rate would be 10%.

A high referral rate indicates that a business is doing well in satisfying its customers and creating a positive brand image. It also means that the business has a higher chance of acquiring new customers through recommendations from existing ones.

On the other hand, a low referral rate may suggest that the business needs to work on improving its customer experience and building stronger relationships with its customers.

To increase referral rates, businesses can implement referral programs that incentivize customers to refer to their friends and family, such as offering discounts or rewards for successful referrals.

They can also improve their overall customer experience to encourage customers to speak positively about the business to others.

  • Customer Acquisition Cost (CAC):

Customer Acquisition Cost (CAC) is a metric that helps businesses determine the total cost associated with acquiring a new customer.

CAC includes all the expenses incurred by a company, including marketing and advertising costs, sales expenses, and other overheads.

To calculate the CAC, a company must divide its total customer acquisition costs by the number of new customers acquired during a given period. The formula for CAC is as follows:

CAC = Total Customer Acquisition Costs / Number of New Customers Acquired

For example, suppose a company spent $100,000 on marketing and advertising in a given month and acquired 1,000 new customers during that period. In that case, the CAC would be $100 per customer.

A high CAC can be problematic for a company, as it indicates that the cost of acquiring new customers is too high relative to the revenue generated by those customers.

On the other hand, a low CAC can indicate a successful acquisition strategy. Companies should aim to keep their CAC as low as possible while still generating significant revenue.

It is essential to note that CAC varies by industry, company size, and marketing channels used. For instance, an e-commerce company that sells high-priced products may have a higher CAC than a retail store that sells low-cost items.

Tracking and managing CAC can help businesses make informed decisions about their marketing and sales budgets, enabling them to optimize their resources and maximize profits.

  • Customer Churn Rate:

Customer Churn Rate is a metric used to determine the rate at which customers stop doing business with a company over a given period.

It is often used as an indicator of customer satisfaction and loyalty, and it can help businesses identify potential issues and areas for improvement.

The formula for Churn Rate is:

Customer churn Rate = (Number of Customers Lost during a period / Total number of customers at the beginning of the period) x 100

For example, if a company had 1,000 customers at the beginning of a quarter and lost 50 of them during the quarter, the Churn Rate would be (50/1000) x 100 = 5%, which means that the company lost 5% of its customers during the quarter.

High Churn Rates can indicate issues, such as poor customer service, lack of product innovation, or competitive pressures.

On the other hand, low Churn Rates can suggest strong customer satisfaction and loyalty, which can lead to increased revenue and profitability.

Businesses can use a variety of strategies to reduce Churn Rates, such as improving customer service, offering loyalty programs, or improving product quality.


In conclusion, customer metrics are a vital tool for businesses to measure and improve their customer experience. By focusing on customer metrics, companies can drive growth and success while building strong, loyal customer relationships.

At the end of our top 50 digital marketing metrics blog series, we can conclude that in the fast-paced world of digital marketing, success lies in numbers.

From impressions to conversions, engagement, and ROI, each digital marketing metric has a story to tell. And the right metrics can illuminate the path to greatness, guiding your decisions and ensuring your campaigns are on track.

At ABK Digital, we are passionate about helping businesses decode these digital narratives. Our team of experts understands the power of data and the insights it can unlock. We are dedicated to translating these metrics into actionable strategies that drive tangible results for your brand.

Don’t let the numbers overwhelm you. Embrace the power of data-driven decision-making in our 10x digital marketing. Together, we will navigate the intricate world of digital marketing, uncover hidden opportunities, and chart a course toward success.

Contact us today, and let’s embark on an exhilarating journey to conquer the digital landscape, one metric at a time.