Customer Maven Quiz:

Q:  What percent of retailers have customer ratings and reviews on their website?

a.  15%

b.  25%

c.  35%

d.  50%

Q:  What percent of retailers that have customer ratings and reviews on their website find them to be effective?

a.  50%

b.  75%

c.  85%

d.  95%

Q:  What percent of consumers need to consult ratings and reviews before making a purchase?

a.  30%

b.  45%

c.  60%

d.  75%

A: Click here for the answer

Critical Customer Metrics - If You Don't Know These, You Don't Know Your Business  

by Paul Schwartz

Customer are critical to your business, right?  So how do you measure how well you are doing with customers?  Do you know the number and reasons why customers flow into and out of your business? Businesses who survive for any length of time are supremely diligent in measuring sales, expenses, and net income.  While those may give you some anecdotal information about customers, they don't get to the heart of the matter. They are often misleading, don't give you a good idea of where to invest for business growth, and won't point out key customer issues before it's too late.  

There are many options when it comes to measuring the health of your customer base, but many of us don't take the time to collect and report customer metrics because it's just too hard, we don't see the value in it, or we don't know what metric will be worth the effort.  So let's make it easy and focus on a few critical metrics that should be easy to measure and provide you with critical and timely insight into your customer base: 

1. New customers and revenue they generated

2. Repeat customers and revenue they generated

3. Lost customers and lost revenue

Here is what a sample of the data might look like using very simple numbers:  

Results above our goal are in green, and results below our goal are in red.  Use this type of data to create your own dashboard that makes it easy to visually assess the health of your customer base.

As you can see this business is exceeding it's goals for new customers (the ones that typically cost the most to acquire), but falls short on it's goals for repeat and lost customers.  It's also important to track how new customers heard about you (advertisement, customer referral, etc.) and why customers are leaving.  To see the trend of these metrics they should be measured monthly and for each distinct segment you have identified for your business. Next issue we'll dive further into this data, what it means, and why it's important to measuring the health of your customer base.  

It's my experience that businesses who take the time to understand and measure the state of their customers in various ways are the most successful.  Because being successful in business often comes from knowing more about your customers than your competition. Need help designing a customer dashboard for your business? Please contact us to see how CONGRUITY can help measure and improve the value of your customers.  Visit CONGRUITY on the web at www.congruity.biz.

Copyright © 2007  CONGRUITY.

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