WinningKPI - Sales - KPI for Measuring of Sales Increase due to Loyal Customers as a % of the Total Sales Increase posted in category Sales KPI details: This indicator is for measuring the % increase in sales due to the acquisition of loyal customers, against the company’s total sales increase, in a given time period.
More details:
Companies can use it to measure the profitability that their acquired loyal customers bring to the business.
A more in depth analysis can also look at the return on the company’s effort and investment to retained customers. For instance, a company could compare the Customer Retention Rate with the Sales Increase Rate and identify any trends (e.g. proportionally growing).
As consumption can vary due to many reasons (season, time of the month, economic stability etc), a company may only use this KPI as definite after evaluating it over a time period, and taking into consideration other factors. For instance, a company selling cosmetic products may have increased their sales during the summer season, with a high % of increase coming from the loyal customers. However, their autumn season results may show that the sales increase was due to higher sales in sun protection products, and not to loyal customers.
Formula:
Total sales increase due to loyal customers/ total sales increase x100
KPI Units: %
KPI Time Frame: update quarterly Posted by Oana Boteanu | Help to protect community: Flag for moderation
Ideas suggested by WinningKPI community:Here are comments:
A very good KPI to identify reasons for sales increase and try put in place strategies to maintain it (or improve it).
A software company (selling antivirus for example) that had a total increase of £2000 over the last quarter can choose to identify how much of that sales increase was from loyal customers rather than new ones.
For example, if the sales increase was due to an upgrade to more premium version of the program, the company can measure how much revenue came from existing customers that upgraded, as a % of all the revenue.
If the increase was of $2000, and $1200 came from existing customers upgrading to the premium version of the product, the KPI % is:
1200/2000 x 100 = 60%
Oana Boteanu | + | September 6, 2012 at 8:18 am
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