A report released recently following a survey by YOTPO predicts that in 2023 metrics for brand retention will need to expand and mature. The majority of brands are not currently tracking retention comprehensively — and in 2023, that needs to change.
This year, brands will focus on streamlining the technology they use to build better, more unified profiles for each customer. Then, with a deeper recognition and understanding of their engagements in addition to purchases, a brand can see a shopper as so much more than just a customer — they’re also a loyalty member, subscriber, texter, emailer, reviewer, and more — and brands will need to treat them as such to drive retention in 2023.
Retention metrics have historically been complex, and that’s one of the primary reasons brands don’t know where to start with their strategy. So, it’s understandable that most brands look to repeat purchase rate (RPR) to define retention — it’s an easy metric to track. They can clearly go into dashboards and understand who’s a repeat buyer, what they’re purchasing, and maybe make some educated assumptions about their product preferences and shopping behaviour.
However, RPR doesn’t account for every touchpoint that should go into measuring retention, because it’s only focused on transactions in the form of purchases. And, that approach to measuring retention just won’t cut it.
According to the Yotpo survey, over 72% of brands are primarily defining their retention rate as only their repeat purchase rate, and while it is an important metric to track, it’s not the only metric brands need to pay attention to when measuring retention.
The report predicts that brands will redefining the metrics they use to measure retention to better reflect the entire buyer journey — and sustain longer lasting relationships with customers.
The report suggests that, in 2023, brands will need to pay attention to the following:
01 – Repeat purchase rate
02 – Average order value
03 – Time to next purchase
04 – Churn rate
05 – Channel growth and engagement
06 – Purchase recency
All of these metrics contribute to understanding customer lifetime value — the most comprehensive retention metric a brand can track. Reconsidering retention in this way will enable brands to build longer-lasting relationships with their customers than ever before.
Read the full report here…