One key predictor of future company growth is customer loyalty.
It’s such an important customer metric, I have a chapter dedicated to measuring loyalty in Customer Analytics For Dummies. There is evidence that customer loyalty predicts future growth better than customer satisfaction. That is, customers can be satisfied with a product and yet still choose not to purchase it again.
Customer loyalty is best measured using a mix of attitudinal and behavioral metrics, and a repurchase rate is a good one to start with.
When customers have a choice in products or services and make repeat purchases (airline tickets, consumer electronics, rental cars, hotels, software licenses), the percent of customers that purchase again from the same company provide a good indication of customers’ loyalty to that company.
