Leading Worlds

What are the metrics (KPI) for the customer (user) dimension?

Let’s have a look at our Marketing Formula and list customer metrics:

PROFIT (period)=#USER * #TRANSACTION (period) * AVG PROFIT (per transaction) (1)

• Customer acquisition metrics: these metrics are measuring the Marketing/Sales performance of new customer acquisition activities. Examples: Ratio new customer/customer base, Sales per first purchase, Cost of Acquisition or SAC (Sales Acquisition Cost), Acquisition lead time (time between first contact and first purchase), Funnel conversion rate (Awareness/potential Market, Consideration/potential Market, Trial/potential Market),…
• Customer development metrics: these metrics are measuring the Marketing/Sales performance of customer value activities. Examples: Customer Lifecycle Value, Average Value per Sales, Active customer rate, Cost per customer, Customer value segmentation (A, B, C), Purchase frequency, Customer lifetime, ARPU (Average Revenue per User), Consumption the last month, Market share, Value share,…
• Customer retention metrics: these metrics are measuring the Marketing/Sales performance of customer retention activities. Examples: Customer Satisfaction, Customer loyalty, Net Promoter Score, Customer Commitment rate, Churn rate (or attrition rate), Customer age, Customer complaints rate, Customer inactive during the last X months (to be defined in function of the industry - eg Telco is 3 months),…

This list is certainly not exhaustive and each metric could justify an entire post. It shows that we could reasonably track Marketing performance of the customer dimension. These metrics could also been detailed per segment and per product. When the market is mature and the competition is high, segmenting the customer base will allow you to be more precise and to potentially find unexploited customer niches. Next post, I will look at metrics for transaction.

Laurent Bouty Some thoughts Customer, KPI, Marketing Accountability, Marketing Formula, Metrics, User