5 Clienteling Metrics for Retail Brands to Obsess Over

Discover the pivotal KPIs for assessing your retail clienteling efforts. Learn how metrics like NPS, Churn Rate, and customer lifetime value can shape a personalized shopping experience that boosts loyalty.

Maximizing Retail Clienteling Success: Key KPIs to Measure Impact

The retail landscape has witnessed seismic shifts in recent years, requiring brands to constantly fine-tune their strategies to retain customers in an increasingly competitive landscape, and to increase loyalty as well. A critical part of this evolution is retail clienteling - the process of personalizing the customer shopping experience using CRM data to build long-lasting relationships.

Clienteling is no longer a nice-to-have, but a necessity in the ultra-competitive retail space. But when brands invest in providing more of that human touch for their customers, they want to know that the ROI on their spend is worth the effort. So how can a brand determine if their clienteling is paying off?

Here are five Key Performance Indicators (KPIs) that will show your team whether your clienteling is working or not.

1. Net Promoter Score (NPS)

Net Promoter Score (NPS) is a measure of customer loyalty and advocacy, based on the simple question: "On a scale of 0-10, how likely are you to recommend our brand to a friend or colleague?"

The reason NPS is so important is because it goes beyond customer satisfaction and taps into their willingness to actively promote your brand. It's an invaluable yardstick of your clienteling success because loyal customers are not just repeat customers; they're also brand ambassadors who drive word-of-mouth marketing, the most credible (and often most effective) form of advertising.

SurveyMonkey revealed their 2022 benchmarks for NPS in the consumer goods and services sector which can serve as a barometer for your retail brand:

Average NPS: +43

Median NPS: +50

Top Quartile: +72 and higher

Bottom Quartile: +21 and lower

Keep in mind that while it’s nice to know you’re keeping up with your peers, what matters is that your brand continues to see your NPS trend in an upward direction as you refine your clienteling over the months and years.

2. Churn Rate

Your customer churn rate is the percentage of customers who stop doing business with your company over a certain period of time. Churn rate is a stark indicator of how happy your customers are with your brand. High churn might indicate poor customer service, lack of personalization, or failure to meet customer expectations – all signs of ineffective clienteling. Keeping a close eye on this metric helps you identify issues before they escalate and allows you to devise strategies to increase customer retention.

The formula for calculating churn rate is: (Lost Customers ÷ Total Customers at the Start of Time Period) x 100. An example of a monthly churn rate would be: 10 lost customers by the end of August / 300 customers at the start of August x 100 = 3.33% churn rate.

In retail, keeping your churn rate between 5-7% per year is recommended. Once you start hitting double digits, you’ll want to reevaluate your clienteling process to diagnose where customers are falling off.

3. Customer Effort Score (CES)

You know what customers love? When things are easy. That’s why a good KPI is the Customer Effort Score (CES). This is a metric that gauges the ease of interaction between a customer and a brand. It’s usually measured with the question: "On a scale of 'very easy' to 'very difficult', how easy was it to interact with our company?"

The CES is integral to your retail clienteling strategy as it evaluates how effectively you're simplifying the shopping experience for your customers. A low CES means customers can easily interact with your brand, whether it's making a purchase, seeking assistance, or obtaining post-sale services, contributing to higher satisfaction and loyalty levels.

This metric allows you to identify pain points in your customer's journey, enabling you to streamline processes and deliver a seamless and delightful customer experience. And it’s a predictive KPI as well since 94% of customers with low CES intend to repurchase from that brand, according to Gartner.

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4. Repurchase Rate

Speaking of repurchasing, the repurchase rate of your customers is a great KPI to measure to help gauge the success of your clienteling efforts. It’s a no-brainer that the happier they are with your brand’s white-glove service, the more likely they are to buy from your stores again.

You can calculate your repurchase rate by dividing the number of customers who have purchased more than once in a given period of time to the total number of customers in that same period. So if you had 150 repeat purchase customers in August out of 300, your repurchase rate is 50%. Of course, you can set your own criteria of what a repeat purchase might be by altering the time frame (eg. week, month, quarter, year).

This metric may be a more tangible KPI than CES and NPS as actions often speak louder than words. While a customer may say they’re happy, you know it’s true when they increase their frequency of purchase.

Speaking of which…

5. Customer Lifetime Value (CLV)

Perhaps the king of all customer metrics, Customer Lifetime Value (CLV) is the projected revenue a customer will generate during their relationship with a brand. It's a key metric that indicates the long-term value of individual customers, taking into account not only their past and present purchases but also their potential future transactions. By focusing on boosting CLV, brands can concentrate their clienteling efforts on high-value customers, maximizing profitability.

This metric is so important to clienteling, we’ve written about CLV previously on how to improve CLV for your retail brand (check out these posts to see how best to calculate CLV). From Endear’s own data, there’s a direct correlation to improved clienteling and CLV across nearly all our clients making it one of the most valuable KPIs to keep tabs on across all your stores.

By keeping track of at least a few of these five metrics, retail brands can accurately assess the effectiveness of their clienteling strategies. These metrics not only provide an overview of current performance but also aid in identifying areas for improvement, ensuring a superior and personalized shopping experience for every customer.