E Commerce Metrices And KPIs: All About Customer Lifetime Value

If you think that your business is not growing well and you need some important strategy to improve the customer interaction with your site then the customer lifetime value CLV is an important factor to consider. It is basically the stat that measures the customer experience and this satisfaction to the store. It is the e-commerce metric that helps you understand the reasonable cost according to the acquisition.

It deals with the customer interaction with the store. It provides info that how much the existing customers that take interest in your store and how much time they visit your outlet. By calculating CLV and keeping a check on it you will able to drive more customers to the outlet and ultimately get improvement in your business. Moreover, it also helps to improve to drive new customers to the outlet thus improving the overall sale in the business.

To know about CLV and to get its benefits it is important to measure one of the most important eCommerce metrics. To keep track on CLV you can use the following methods

Measuring CLV

Calculate the average purchase value:

To measure the average purchase value, you can divide the average money spent by the customer to the frequency of his visit to the outlet. For example, if one customer visits the outlet three times a week and he spends a total of $12 to buy the product it’s mean his average purchase value will be 4. After that calculate other customer’s purchase value in a similar way. Now sum up the purchase value of all customers and divide with the total number. For example, if 15 same customers visit the store, then divide their total revenue with a number of customers. It will provide you average purchase value.

Average Purchase Frequency Rate:

As the name indicate it defines the frequency or the number of the visit each customer gives to the store. You can calculate by dividing the number of purchases with the number of visitors during a particular time period. It will help you get an idea of how unique customers visit the store at a particular time.

Calculate customer value:

Calculating customer value is very easy and simple. You can get this number by average purchase frequency rate with the average purchase value.

By calculating these factors one can able to know the customer value. Now the question is if the value is less than expectation what should one do to improve it? Here are the following ways to improve the CLV.

Customer Satisfaction Is Important

As we know business purely relies on customer satisfaction. If your customers are happy then it’s mean you are doing well. To maintain their happiness, try to fulfill their requirements. Check what they need and what changes they want, try to bring products that most customers use to buy. It will lead to customer satisfaction and ultimately help improving business.

Customer retention

Some business fails to retain their customers may be poor quality or not having products that customer want. It is important to apply such strategies so that more customers walk in your store. You can offer them a discount, free shipping or buy one get one free offer to grab their attention. These are a few strategies that will always help you to get back your customers and keep your growth rate smooth.


Photo of author

William Woodall

Hi, My name is William Woodall, and I am a person who is determined to make the world a better place. I like to be around people and enjoy adventure and challenges.
Share on:

Leave a Comment