Loyalty is supposed to be something that’s intangible – something you can’t measure with numbers or a unit. While that’s true in personal relations, the truth is different in the business world.

There, customer’s loyalty to a business can be measured based on how much they interact with said-business. Such a metric is a great way to understand how popular your business may be to your audience, and for what specific reasons. Even so, some business owners might want to measure their customer loyalty, but don’t know where to start.

Here are 5 great ways you can measure customer loyalty:

1. Sales Per Customer

This is a ratio of total revenue made and total number of customers. This shows how much every customer of yours is spending on your business – and hence shows the degree of commitment every customer is willing to give you. In the end, even if you have a hundred customers visiting your store, it doesn’t make a difference if barely half of them spend their money.

Active Engagement Rate

This is a simple calculation of number of customers engaged divided by the total number of customers coming to your store. It is a great reflection of how many people like interacting with your store – i.e. how many come through your doors to buy something, as opposed to just loitering around. This metric also helps understand which products are being well-received, and which products aren’t faring well; it offers a more focused look at the success of new product releases and programs.

Repurchase Ratio

This is the ratio of customers purchasing more than once over customers purchasing only once. It’s a simple metric that shows how many customers of yours are willing to revisit your store. This directly shows how loyal your customers are, and how popular you are to your audience.

CAC

The CAC – or Cost to Acquire a new Customer – is a great way to measure the money you need to invest to gain a new customer for your business. It allows you to better manage your expenses, so that you always spend the right amount of money while growing your customer base.

NPS

NPS – or Net Promoter Score – is a survey that measures how likely your customer is willing to refer your brand to others. For NPS, a number is assigned from 1 to 10 for everyone; then, all customers are divided into 3 groups: detractors (1 – 6), passives (1 or 8) and promoters (9 or 10). Not only is this an easy metric to measure, but it’s also the most effective at putting customer loyalty in your perspective; it directly shows how positively your audience considers your business.

Instead of measuring NPS manually, or wasting money over a separate system, you can invest in a POS system with a seamless Loyalty Program integrated for you. One POS software in Pakistan capable of that is Oscar; it not only automatically calculates NPS scores, but also awards loyal customers with points. This allows you to easily reward them with special discounts, promotions, and more.


Ultimately, knowing how loyal your customers are to you helps you understand where your business stands in the grand scheme of things. That’s why it’s a metric you should never overlook.