What is Active customers?
Active customers are the users who have engaged in a procurement process and completed a purchase from an online store within a certain time frame. Measuring the number of active customers is essential to assess the health of an e-commerce business, identify trends, and drive strategies to foster growth. An active customer portfolio reflects market penetration, customer loyalty, and the effectiveness of promotional campaigns.
Formula
Active Customers = Total Number of Unique Customers that Completed a Purchase within a Given Period
Example
Suppose you have an online store, and over a month, you registered 500 unique customers who made at least one purchase. In this case, the number of active customers for that month would be 500.
Why is Active customers important?
- Indicate the success of marketing and promotional efforts for attracting and retaining customers.
- Serve as a key performance indicator, assessing the effectiveness of strategies employed to enhance user experience.
- Provide insights for better forecasting, as well as tailoring products and services to cater to customer preferences.
- Reflect growth in customer loyalty and brand reputation.
- Help identify patterns in customer behavior for improved targeting and personalization.
Which factors impact Active customers?
- Market trends and consumer preferences.
- Seasonal purchasing habits.
- Economic environment and purchasing power.
- Competitor marketing and promotions.
- Product quality and pricing.
- Customer support levels.
- Website effectiveness and ease of use.
- Credibility and trustworthiness of the e-commerce platform.
How can Active customers be improved?
- Enhance customer experience through improved website navigation, personalized recommendations, and superior customer support.
- Implement promotional campaigns such as discounts, referral programs, loyalty rewards, and targeted offers.
- Leverage social media and email marketing for increased discoverability and engagement.
- Optimize product descriptions, images, and reviews for better conversions.
- Regularly analyze consumer behavior patterns and demands, adjusting offerings and strategies accordingly.
What is Active customers’s relationship with other metrics?
- Conversion Rates: The percentage of visitors who become active customers, reflecting the efficiency of the marketing and sales funnel.
- Customer Lifetime Value (LTV): Assessing the total value a customer brings over their lifetime, active customers help determine the LTV, guiding promotional strategies.
- Customer Retention Rate: The proportion of customers who continue purchasing over time, an increase in active customers enhances retention rates.
- Average Order Value (AOV): Active customers directly affect the income generated through AOV, an essential metric for projecting revenue and growth.
