How to Measure Customer Loyalty

In this clip from Resilience: An eLearning Series For Ecommerce Brands In 2021, Allison Hartsoe, CEO of Ambition Data, explores some different ways that brands can measure customer loyalty. 

Measure customer loyalty with leading engagement metrics

While growth in Customer Lifetime Value (CLV) and Net Promoter Score are traditional ways to measure customer loyalty, let's explore why brands should look at trend-able metrics that are unique to them in order to better assess customer loyalty.

In the chart below you'll see how Electronic Arts (EA) created 4 metrics that are very unique to their business as a way to measure customer loyalty and understand their business.

EA customer engagement metrics

Scale

Scale represents the share of customers that Electronic Arts has compared to the customers that they could have.

Time

Electronic Arts discovered that the more time a player was spending playing a particular game, the more likely they were to be to buy the next game that was released. And by monitoring and trending the amount of time spent playing a game (using the product) Electronic Arts determined a critical metric that indicated future value of that customer. 

However, it might not be possible for ecommerce brands to track such a metric in the same way - it's impossible to know how many times someone wore a particular shirt or how long they wore it for example - but the idea is to reinforce the notion of building metrics unique to your brand.

Money

Average spend is a basic metric that helps brands understand their most profitable and most loyal customers. 

Loyalty

Customer loyalty was measured by Electronic Arts using NPS to get an idea of customer satisfaction over time. 

In conclusion, these four metrics combined allowed Electronic Arts to measure customer loyalty that they used to develop marketing communications and ultimately grow over time.