Five Metrics Your Business Should Track for Improved Customer Retention

According to a study presented by, “Acquiring a new customer can cost five times more than retaining an existing customer” and “Increasing customer retention by 5% can increase profits from 25-95%”.

As a business owner, it’s important to track certain metrics to ensure that your company is running smoothly and achieving its goals. But with so many different metrics to choose from, it can be overwhelming to know which ones to focus on. Here are some of the best metrics to track, as well as some tips on how to improve customer retention:

  • Customer Acquisition Cost (CAC): This metric measures how much it costs to acquire a new customer, including marketing and sales expenses. By tracking CAC, you can see whether your current customer acquisition efforts are cost-effective and make adjustments as needed.
  • Customer Lifetime Value (CLV): CLV is a prediction of the total amount of money a customer will spend on your products or services over the course of their relationship with your business. By understanding CLV, you can allocate your resources towards retaining and upselling to your most valuable customers.
  • Net Promoter Score (NPS): NPS is a measure of customer satisfaction and loyalty, based on a survey question asking customers how likely they are to recommend your company to a friend or colleague. A high NPS is a good indicator of customer retention and can be used to identify areas for improvement.
  • Customer Churn Rate: Churn rate measures the percentage of customers who stop doing business with your company over a given period of time. By tracking churn rate, you can identify trends and address any issues that may be causing customers to leave.
  • Average Order Value (AOV): AOV is the average amount that a customer spends per order. By increasing AOV, you can improve profitability and encourage customers to make larger purchases.

To improve customer retention, it’s important to focus on creating a great customer experience and building trust with your audience. This can be achieved through excellent customer service, transparent communication, and consistently delivering high-quality products or services. Additionally, consider offering loyalty programs or incentives to encourage customers to continue doing business with you. By regularly tracking these metrics and implementing strategies to improve them, you can increase customer retention and drive the success of your business.