Guide to measure customer loyalty in your retail business
Measure customer loyalty using these formulae.
Average order value (AOV)
AOV is the average value of each customer’s order and helps you identify your highest-value customers.
Calculate your AOV with this formula:
AOV = Total Sales / Order Count
Net promoter score (NPS)
Know the likelihood of a customer referring your services to others.
Ask your customers:
How likely are you to recommend our brand to your friends and family?
Customer loyalty index (CLI)
The CLI is a standardized measure of customer loyalty over time. CLI examines NPS, upselling, and repeat purchases. CLI measures customer intention versus actual behavior.
Questions to ask in your NPS survey:
- How likely are you to buy from us again in the future?
- How likely are you to try our other products?
Customer effort score (CES)
CES measures the effort required of your customers to solve an issue or purchase/return a product. Customers tend to be more loyal to products and services that are easier to use.
Repeat customer rate
Your repeat customer rate measures how many customers are willing to buy from you in the future.
Calculate your repeat customer rate with this formula:
Repeat Customer Rate = No. of Customers That Purchased More Than Once / No. of Unique Customers
Purchase frequency measures how often customers make repeat purchases.
Calculate your purchase frequency with this formula:
Purchase Frequency = No. of Orders Placed / No. of Unique Customers
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