Loyalty Metrics Every Ecommerce Business Should Track

Our team has helped over 500 top E-Commerce brands turn customer service into a revenue-generating channel. Tracking results is vital to us and our client's successes. The key metrics that we pay the most attention to are: 1️⃣ The percentage of returning customers within a specific period of time. 2️⃣ Customer's Lifetime Value (we see so many brands not aware of what their AOV or LTV is, which makes it so difficult to optimize their spending on customer acquisition!) 3️⃣ Net Promoter Score (NPS) — the likelihood of a customer sharing your brand with others in their network (Hello, free marketing!) 4️⃣ Customer Effort Score (CES) - How difficult is it for customers to get their issues resolved? 5️⃣ Customer feedback. I can't stress this one enough and this is not just CSAT... TALK TO YOUR CUSTOMERS and stay in tune with how their experience with your brand is. Many founders can get lost in the sauce and forget to stay top-of-mind on this! 6️⃣ Revenue Generate Through CX - How are you generating revenue through customer conversations? Are you reducing returns through platforms like Loop Returns and do you have ways to re-activate Abandoned Carts or follow up with first-time purchasers? Any additional metrics or focus points you measure? Let me know what results are the most important to you! #customerservice #revenuegeneration #results

Most eCommerce brands obsess over revenue and ROAS. But the real game is in the metrics no one talks about. Here are 10 overlooked KPIs that actually drive growth (and how to optimize them): ~~ 1. LTV:CAC Ratio (The Ultimate Health Check) LTV:CAC = Customer Lifetime Value ÷ Customer Acquisition Cost 1:1 = You’re bleeding money 3:1 = Healthy 5:1+ = Printing cash If you’re below 3:1, either: ✅ Lower CAC (better targeting, UGC ads, referrals) ✅ Increase LTV (subscriptions, upsells, memberships) == 2. 90-Day Repurchase Rate If a customer doesn’t buy again within 90 days, they probably won’t. Fix it by: • Winback campaigns with targeted incentives • Selling bundles that create habits • Building a loyalty program that rewards repeat buyers == 3. Contribution Margin (What’s Actually Left?) CM = Revenue – (COGS + Shipping + Discounts + Ad Spend) If your CM is under 30%, you’re scaling a business that won’t survive. Get margins up by: • Cutting discount dependency • Negotiating lower fulfillment costs • Adding Onward shipping protection == 4. Subscription Churn Rate (The Silent Killer) High churn = your brand is a leaky bucket Fix it by: • Adding pause & skip options via SMS (Skio for example) • Add more delivery options and product variety • Sending an email 7 days before renewal reminding them potential lost perks == 5. Time to Second Purchase (T2P) Track how long it takes for a customer to place their second order—then cut that time in half. Tactics to speed it up: • AI-based Email/SMS flows with hyper-targeted recommendations • Exclusive discounts for second-time buyers • Reorder reminders based on average usage time == 6. Gross Margin per Order (The Scaling Checkpoint) At scale, 40%+ gross margins keep you profitable. If you're below that: • Increase prices (test 10% bumps) • Reduce discounting, do Cashback instead (@ Onward) • Negotiate better supplier terms (carrier rates, 3pl, etc) == 7. Refund & Return Rate A high return rate = a CAC multiplier. Fix it by: • Charging for returns (but offering free exchanges) • Clearer product descriptions & sizing charts • Post-purchase emails on how to use the product == 8. Organic vs. Paid Revenue Ratio If 60%+ of your sales come from paid ads, you’re in trouble. Brands with real staying power win on organic channels. The fix? • SEO & content marketing • Affiliate & referral programs • Retention tactics (VIP, loyalty, subscriptions) == 8. SKU Concentration Risk If 80%+ of your revenue comes from one product, you’re vulnerable. Great brands expand without overextending. Turn one-time buyers into multi-SKU customers with: • Bundles • Exclusive add-ons • Subscription perks == 9. % of Revenue from Returning Customers A healthy DTC brand makes 40%+ of revenue from repeat buyers. If you’re below that, focus on LTV levers: • VIP memberships • Personalized email/SMS offers • Post-purchase nurture flows Follow Josh Payne for deep dives on DTC, SaaS, and investing.

Top Metrics Every #Ecommerce Company Should Answer - Average Order Value of First Order vs. Recurring Order: Since e-commerce usually struggles with retention, use the Average Order Value (AOV) of the first order to calculate the ROI on ads. Focus on making that first transaction count! - Likelihood to Order Again by Order Occurrence: Measure the probability of a customer making a second purchase and the likelihood of a fifth order after a fourth, etc.... This helps identify where the drop-offs are and determine when customers become loyal. If it takes four orders to hook a customer, then focus on getting to 4 orders and ignore the rest. - 3-Month, 6-Month, and 9-Month LTV by First Product and Order Size: Track the Lifetime Value (LTV) over time based on the initial product purchased and order size. This helps assess the combination of order value and retention, revealing which products drive the highest LTV. Ensure that initial spending isn't too low (risking negative marketing ROI) or too high (which can decrease LTV). - Media Mix Percentage for First Buyers: Determine if your first-time customers are influenced by multiple ads, whether they return organically, or if they switch platforms. This insight is crucial for fine-tuning performance marketing strategies for new customers. (Also can save your data teams months on building a complex media mix attribution that is not needed) - Spend on Converted Customers: With cookies constantly being reset, keep updating your list of converted customers. Despite the promises of Meta and Google, converted customers often still see ads. Ever wonder why you keep seeing ads for products you already bought? These metrics provide significant insights quickly, offering the biggest impact for your e-commerce strategy. What metrics do you find helpful? What am I missing? React with 💡 if you like this kind of content, and I'll share more insights across different industries. #ecomm #data #metrics #bestpractices #ltv #roi