Overview

Returned customers are a vital CRM metric, that tracks repeat purchases. They gauge loyalty, aid in engagement strategies, and boost e-commerce profitability.

What is Returned customers?

Returned customers is an important Customer Relationship Management (CRM) metric that measures the number of customers who made a repeat purchase in a given period. This metric is a great indicator of customer loyalty and is essential for the long-term success and profitability of any ecommerce business. By tracking customers that have made multiple purchases, ecommerce businesses can assess customer loyalty, develop more effective customer engagement strategies, and increase profitability.

Formula

Returned Customers = (Number of Customers Who Made a Repeat Purchase / Total Number of Customers) x 100

Example

Let’s say an online clothing store had a total of 500 customers in a given period. Out of those 500 customers, 100 customers made a repeat purchase during the same period. To calculate the percentage of returned customers:
Returned Customers = (100 / 500) x 100 = 20%

Why is Returned customers important?

Understanding Returned customers is important to understand the customer purchase behavior, improve long-term customer loyalty and retain customers for a long time. It gives insight into how customers perceive the products or services offered by the business. It also provides valuable information to study the different product categories that are most popular among customers and what kind of seasonality to expect in the sales.

Which factors impact Returned customers?

To improve the “Returned Customers” metric in ecommerce, businesses can implement several strategies. This includes providing excellent customer support, ensuring product quality, and streamlining the buying process.

How can Returned customers be improved?

Improving Returned customers requires considering various factors. Ecommerce businesses should focus on providing better customer service, offering more convenient return and exchange policies, and enhancing the shopping experience. Offering reward programs and discounts can also be effective in improving Returned customers. Encouraging customers to recommend the products to friends and family can help increase repeat purchases.