• Customer Loyalty

4 Key Customer Loyalty Metrics To Be Tracking in 2021

by: Allen Graves On: November 24, 2020
6 min read

In the competitive brick-and-mortar landscape, customer loyalty is crucial to business success.

In fact, 82% of companies agree that retention is cheaper than acquisition. Sixty-five percent of business comes from existing customers.

Restaurants and retail establishments need to be tracking key customer loyalty metrics to understand how their customers feel about their brand. And in an environment where online reviews significantly impact customer sentiment, businesses that do not track customer satisfaction will feel the effects sooner or later.

The same is true for customer loyalty. Companies that can closely monitor their customer loyalty metrics in detail will have a considerable advantage over their competition.


If you’re unclear about what metrics you should be tracking to understand and improve your customer loyalty, we’ll discuss four key metrics to help you get started, as well as how to collect this valuable data.

Increased customer loyalty means increased revenue. Anecdotal evidence and online customer sentiment cannot give you the crucial data points you need to understand one of the essential ingredients for your business’s success – customer loyalty.

  • Are you currently tracking how your customers feel about your brand?
  • Do you know what percentage of your customers are returning?
  • Are you receiving accurate, measurable data from crucial customer loyalty metrics?

What metrics should you use to measure your customer loyalty, and what do they mean for business? Here are four crucial brand metrics to help get you started. 

#1. Your Brand’s Customer Lifetime Value

Your customer’s lifetime value directly relates to how long a customer remains with you and how much they spend during that time—the more loyal the customer, the greater their lifetime value. Loyal customers not only purchase with reliable frequency, but they do so over long periods. An increase in each customer’s lifetime value improves your revenue and carries financial relevance for your company.

There are various tools available that attempt to track and understand lifetime value. Still, it boils down to simply knowing how often a customer visits and makes a purchase over a certain period. Once you have that data about your customers, you can extrapolate the numbers to understand the revenue you can expect to generate. If you’re not tracking your customer’s lifetime value with accurate and measurable data, you miss a crucial customer loyalty metric.


#2. Customer Return or Repeat Rate

Similar to lifetime value, whether a specific customer is returning or making repeat purchases is critical to your company’s revenue and growth. If you’re in the restaurant or retail business and patrons aren’t coming back (i.e., you have a high customer churn rate), you have a big problem, and it needs addressing.

If your data indicates your customer repeat rates are low, you know it’s time to consider your restaurant marketing. You could send out coupons to your email list, promote your new menu items on Facebook and Instagram, and bump up the incentives for joining your loyalty program.

But taking this kind of action starts with having the data. A WiFi marketing and analytics platform is the only practical way to gather and view this data.


#3. Customer Loyalty Program Participation

How many of your customers want to join your loyalty program? How many are participating after they’ve signed up? It’s important to know if your customers love you so much that they want a digital punch card or membership perks or if they see participating in your program as pointless. Getting your customers to participate is also crucial because the loyalty program is a direct-to-consumer restaurant marketing channel.

Once customers sign up, you can send promotions and offers, track whether they are opening your emails and visiting your website, and, ultimately, know whether they are cashing in on the perks. Knowing the redemption rates of offers is a crucial data point that helps deepen your understanding of your brand’s “sticking” power and tells you if you’re spending your money in the right places.

Do you currently present each customer who walks into your business with the option to join your rewards program? How are you tracking whether they show interest? How are you monitoring whether those in the program redeem their perks?


#4. Net Promoter Score

A Net Promoter Score is an index that measures your customers’ willingness to recommend your company to others. Understanding where your customers fall on this index helps you appreciate customer loyalty levels because it helps gauge your customers’ overall satisfaction with your business.

People share their favorite businesses and products for a few reasons: increased social capital, financial gain, and the rare selfless share (helping a friend out, etc.). Even when they are getting the benefit of sharing, people still want the process to be easy. So, it’s essential to give customers an easy and accessible way to share information about your business. Once you’ve made it easy, all you need to do is track the response.


If the response is low, you have an opportunity to make adjustments. Knowing there is room for improvement can be a good thing, especially for brick-and-mortar businesses. Room for improvement means there is room to improve your marketing and grow your revenue. But without the data, you don’t honestly know that the opportunities exist.

Defining Your Loyalty Program Metrics


1. Customer return rate (CRR): This measures how many of your current guests have visited in the past. 

Your CRR is determined by subtracting the number of customers you have at the end of a period and the number of customers you have acquired throughout a period. Then, you divide this number by the customers you had at the beginning of a period. 

You’ll want to be patient with tracking CRR improvements because customer loyalty takes time.


2. Redemption Rate (RR): This measures the redemptions of an offer campaign.

Your RR is measured by dividing the number of offers sent by the number of offers redeemed.

Keep in mind that the average RR is 13.67%.


3. Participation Rate (PR): This measures the number of people who engaged with your campaign.

Your PR is measured by dividing your number of promotional members by your total number of customers.

If you have a low PR, then it might be time to start evaluating how to expand your promotional reach.


4. Repeat Purchase Rate (RPR): This measures how many guests repetitively made purchases.

Your RPR is measured by dividing your total number of guests within the past 365 days by the number of guests who made more than one purchase.


5. Loyal Customer Rate (LCR): This measures your guest loyalty.

Your LCR is measured by dividing the number of unique guests by the number of guests who purchased more than four times within 365 days.


Get the Data You Need for the Growth You Want

These four customer loyalty metrics are crucial to understanding your current customers and areas for improvement. With accurate, measurable data in hand, you can effectively take action to improve your customer loyalty and increase profits.

Generating the data with the proper tools, like a WiFi marketing and analytics platform, is the first step. If you don’t take that step, you’re missing out on critical opportunities to improve your marketing strategies and grow your revenue. 


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