Customer lifetime value (CLV) estimates the net profit from a customer’s future relationship. It helps businesses understand the importance of customer retention and investing in customer loyalty.
Popupsmart logo and customer lifetime value calculation with illustration of a woman wearing headphones and using a computer
It can be calculated as follows:
Müşteri Yaşam Boyu Değeri = (Müşteri Değeri * Ortalama Müşteri Ömrü)
You can calculate customer value as follows:
Müşteri Değeri = Ortalama Satın Alma Değeri * Ortalama Satın Alma Sayısı
A high CLV indicates that a customer is valuable to the business, while a low CLV indicates that customer may be less useful or even a burden. By tracking this KPI, you can decide which areas to invest in and which parts of your current efforts need to be improved.
It's vital for customer retention because it allows you to measure the lifetime value of your customers and better understand future results.
3. Repeat Purchase Rate (RPR)
Repeat purchase rate evaluates the percentage of customers who purchase a product more than once. It is usually expressed as the percentage of customers who purchase the product repeatedly.
Repeat purchase rate calculator illustration with currencies and Popupsmart logo
It can be calculated like this:
RPR = Geri Dönen Müşteriler / Toplam Müşteriler
A high repeat purchase rate indicates that customers are satisfied and are likely to purchase from your business again. A high repeat purchase rate increases customer loyalty as customers repeatedly purchase your products or services.
This rate goes hand in hand with the customer retention rate and is one of the key KPIs for retaining loyal customers. Calculating this metric at certain times can be useful for determining the effectiveness of certain marketing efforts and making comparisons.
If you are not happy with your business's RPR, you may want to consider improving your campaigns and encouraging your visitors to make repeat purchases.
4. Monthly Recurring Revenue (MRR)
Monthly recurring revenue measures the recurring revenue generated each month. MRR is an important metric for businesses with a recurring revenue model, such as subscription-based companies. If you own a subscription-based company , you shouldn’t ignore this customer retention KPI .
This metric gives an idea about the stability and growth of the business and allows businesses to take necessary actions. You can also predict future revenue and determine user behavior.
Monthly recurring income calculation with Popupsmart logo and an nigeria whatsapp phone number illustration of bags and dollar signs
You can calculate with this formula:
MRR = (hesap başına ortalama gelir) x (o ayki toplam müşteri sayısı)
A steady increase in MRR indicates that the business is growing and successfully retaining customers. On the other hand, a decrease in MRR may indicate a problem with customer retention.
Increasing MRR can ultimately contribute to the growth and success of a business, meaning customer retention is managed correctly.
Remember that repeat revenue, churn, discounts, upgrades, and downgrades can all affect your MRR. As a result, MRR drops can happen from time to time, and to prevent this from happening on a regular basis , you need to first measure why it’s happening.
5. Churn Rate
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