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Cheat Sheet to the gold mine of retail analytics

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Retail is a grueling business, but there are tools out there to help make it a little easier. Some of these tools can be collecting & analyzing data on your business. The only trouble is you just need to know how to use it and how to collect the data. This article should help you in this. Here are the top 3 you need to know and use in your business.

1. Lifetime Value of your Customer or LTV for short. This is placing a value on your customer over the lifetime of them doing business with you. This analytic goes back to the theory of it’s more affordable to keep clients then to try and get new ones. Every customer is important and just to know how important use this formula. Now when it comes to the lifetime the customer uses or buys your product be realistic and conservative with this figure.

(Average number of purchases per year x average order value x the lifetime of the customer= LTV )

2. Churn rate, or as I like to call it Turn & Burn -TBR for short. If your LTV is low it could be because of a high turn and burn rate. If you have an e-commerce site or a subscription based business it will be easier to see if this is an issue in your businesses and track the numbers. If not you will need to pick a cut of date and track the last time customers made a purchase in that timeframe. For example loyal customers usually buy something within 60 days, if a customer doesn’t it would be considered a ‘churn’. Another time you might see a high churn rate is if you use a discounted selling website like Groupon, Living Social, etc. In most cases those customers will not be a repeat customer and were only in your business because of the deep discount.

(# of one-time customers/ total # of customers =churn rate)

3. Cost-per-Acquisition or Action, CPA for short. This is extremely important in ecommerce businesses or in brand marketing. People don’t come to your site, event or find your brand on accident. It’s because they saw an ad or were told about your product, service or brand. This could be in social media, paid searches, typical advertising or branding that you will track the CPA analytics. It is used to gauge the marketing campaign and if it worked in brining new or acquiring customers. The CPA is determined on what you spend for what you get. Example is spending $1000 on a campaign and received 100 purchasing customers from it your CPA is $10.00. Not to bad of a return.

($ Amount spent on marketing / # of purchasing customers = CPA)

It’s important not just to work your business, but to know how your business is working for you. I hope this helps you collect and find out very valuable data on your business.

You can always send me an email at for more tips & advice on your business.

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