Customer Retention Metrics

Top Customer Retention Metrics for an Ecommerce Store​

What’s the key ingredient for growing your ECommerce business without needing to acquire new customers? Customer retention, or what else. After all, the more revenue you get to generate from your existing customers, the less pressure you put on your customer acquisition efforts, and you also get to improve customer engagement. In other words, you’ll be under less pressure to acquire new customers if your existing ones continue to buy.

Read on to learn how to measure customer retention, how to calculate it, and why it’s important. We’ve also covered the basics of retention metrics and, most importantly, what Hello24 is, what its features are, and how you can improve customer retention with your WhatsApp.

What is Customer Retention Metrics?

Customer Retention Metrics

Customer retention metrics are the tools that measure how loyal customers are to a company. They are used to measure customer satisfaction, customer engagement, and customer loyalty. These metrics can be used by companies to predict when they might lose a customer and take action in order to retain them.


The goal of these metrics is not only to measure how many customers have churned but also why they left. This will allow companies to find out what the problem is and fix it. It is a metric that measures the probability of a customer buying from you again. The metrics are calculated by looking at the number of customers who have returned to purchase from you and the number of customers who have not. 

The higher the percentage, the more likely it is that your product or service will be purchased again. It is important for businesses to focus on retaining their clients, as they provide long-term value and help build customer loyalty.

What is the importance of Customer Retention Metrics?​

Customer Retention Metrics

If an organization does not focus on customer retention, then they will potentially lose out on repeat customers. While the process of gaining new customers, or customer acquisition, is highly important, it is also much more expensive. 


Here’s how customer retention metrics can help you:


  • Product extension and repeat purchases may result from this.
  • It gives a numerical value to the concept of client loyalty, making it easier to compare and discuss. 
  • The lifetime value of a loyal customer is around 10 times that of a new one.
  • If you can keep more of your current customers happy, your business will see a rise in earnings.
  • A decline in customer retention could be an indication of a flaw in the company’s approach.
  • Retaining existing customers is easier and more effective than attracting new ones.

Businesses also need to understand all the operations that may turn off potential and existing customers, such as slow or poor customer service or a faulty product. The above important points will help your e-commerce business retain customers. 

How Can We Calculate Customer Retention Metrics?​

Customer Retention Metrics

The retention rate is the standard metric for measuring customer loyalty, and it should be tracked constantly. To begin, a business must decide how many years worth of data it needs to save. This could be anything from one calendar month to a whole fiscal year. The retention rate also takes into account the following elements:


  • New customers gained over time (N)

  • Existing customers retained over time (S)

  • Total customers served over time (E)


These figures need to be documented. When the formula is retrieved, it is used in the following way:


Retention rate = (E-N/S) x 100


For example:- If a company has 750 clients at the beginning of the period and 950 at the conclusion of the term, but only 625 were acquired over the period, then their customer retention rate is 43.3%.

What are the top 5 customer retention Metrics?

Customer Retention Metrics

Customer retention metrics are an important measure of how well a company is doing. There are many different methods for customer retention metrics, and they range from the simple to the complex. Companies can choose from simple, daily customer churn rates to more complicated methods like average lifetime value, cumulative lifetime value, and net customer acquisition cost. 


Now let’s have a look at the top 5 customer retention metrics that will help you in its measurement:- 

Rate of Customer Retention (CRR)​

CRR is the percentage of customers that return to a store after shopping there once. The CRR is calculated by dividing the number of customers who returned to the store by the number of new customers that shopped at the store. 



(No. of customers at the end of a given period – No. of new customers acquired) / No. of customers at the start of the period.

Customer Churn Rate​

The customer churn rate is the rate at which customers are canceling their subscriptions to a company’s product. The higher the churn rate, the worse off the ecommerce will be. Every business strives to get and keep customers on board to stay profitable. One of the best ways to retain customers is by providing consistent customer service and quality products that are always up-to-date.



(No. of customers at the end of a given month / No. of customers at the start of the period) x 100

Product Return Rate (PRR)

The Product Return Rate measures the frequency with which your consumers send back the goods they have purchased. This is terrible news for online retailers with a high rate, as it points to problems with the quality of their products, delays in delivering, or inaccurate product descriptions. In order to reduce PRR, it is necessary to keep an eye on the rate and address the underlying causes.



Total number of returned products / Total no. of products sold

Time Between Purchases

It helps you see how your customers feel about your brand and how you stack up against the competition. It represents the typical interval between a customer’s first visit to your site and their subsequent purchase.



The sum of individual purchase rates / Total no. of returning customers

Repeat Purchase Ratio

The repeat purchase rate (or re-order rate) measures the percentage of previous buyers who came back to make another purchase. Therefore, a greater rate indicates that your plan for keeping customers is successful.



No. of returning customers / Total no. of customers

How Can We Improve Customer Retention?

Customer Retention Metrics

There are many ways by which you can improve your customer retention, but the most important ones that are to be followed are listed below:- 


Build trust with your customers.

Two things are most important when it comes to building trust between your company and your customers:

  • Don’t assume they trust you because they buy goods and services from you.
  • Trust takes time to build. It doesn’t happen quickly. 

Reliability and patience are key factors in building trust, so your company should consistently deliver some value to the customers.

Offer unique services

Offering a good or service that’s superior to your competitors’ in the eyes of your customers is no easy task, but the reward is worth it only in the long run. If you’ve developed a proper niche for your business that solves a critical customer pain point and offers some unique services to the customers, you’re on the right track to retaining them.

Apologize when you make mistakes


Try your hardest to avoid mistakes, and if it happens by any chance, then just humbly say sorry. A simple mistake can put you at risk of losing your valued customers, depending on how you handle it.



Above mentioned were the top 3 most important ways by which you can improve your customer redemption but Hello24 provides you the best way by which you can redeem your customers back in your e-commerce business.

What are the benefits of using WhatsApp as a medium for customer retention?

Business Profiles


These allow you to provide your consumers with important details such as your physical location, a brief description of your company, contact information (including email and a website), and more.

Quick Replies 


You can store and reuse the message you send regularly by creating a “Quick Reply.” Using this method, you can also respond to frequently asked questions and queries of customers.

Automatic Responses


You can program in automatic responses, like with chatbots. We realize that, while having clients from all over the world, you still need to sleep, and that answering business calls during that time might be challenging. 

How does Hello24 help in customer retention?


Hello24 is a popular messaging app that helps you build strong customer relationships through WhatsApp. It’s a platform for conversational commerce that will help your company’s sales, marketing, and customer service departments. Below are some of the features of Hello24:- 

Sell your products on WhatsApp

“Carry-out” your ordering processing, delivery, and checkout processes over WhatsApp. With hello24’s ecommerce WhatsApp chat bot, you can quickly and easily roll out advertising initiatives.

Deploy marketing campaigns in seconds

Upload all the customer databases and set up your campaigns with a couple of clicks. You can increase your earnings by finding and improving customer engagement and retention with past customers. 

Support your customers 24/7

Hello24’s conversational AI platform provides answers to all the customers’ most frequently asked questions. It also takes advantage of the payment options that WhatsApp already has set up for you!

These features make customers’ shopping experience very easy by making everything available at your fingertips. And this convenience ultimately leads to improving customer retention. 


In order to retain your customers, you need to understand what they look for in a company. You should offer them a service that is valuable and that they cannot find elsewhere. It should be easy and convenient to buy from you.

Next, you need to make sure that your customer service is top notch and always available when they need it most. You want to make sure that they feel valued as a customer, which will make them stay with your company. And as a conclusion, nothing beats Hello24 to win back lost clients on WhatsApp. 

To read more about how to recover abandoned cart using WhatsApp click here.


About Hello24.ai

Hello24.ai is conversational commerce platform that helps companies to engage customers on WhatsApp. Our platform enable you to 

  • Double your sales with guided WhatsApp selling
  • Get 10x ROAS on marketing spends
  • Automate customer support queries

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