Summer of Metrics: The Combined View

Now that I've gone over a few core metrics for your store, let's put them all together. Alone they each have weaknesses or gaps but combined they can give you a clear picture.

Combining Average Order Value with the Repeat Purchase Rate will tell you about how much each new customer's order will be and the likelihood of them placing repeat orders. Each of those repeat orders should be about the same size as the Average Order Value describes.

Add in the Average Customer Purchase Latency and you'll know the delay between their first order and second order and third order, etc.

Add in the Average Lifetime Value and you learn how much to expect in future orders.

Let's use an example to work through:

• Average Order Value $50
• Repeat Purchase Rate 25%
• Average Customer Purchase Latency 30 days
• Average Lifetime Value of $150

Using these metrics, you'd expect something like this to happen on average.

1. First order of $50
2. 1-in-4 customers will order again, around the 30 day mark
3. That repeat customer would end up spending $450

That third point might be surprising. You'd might have thought that repeat customer would have only spent $150 but you have to remember that the one-time customers never spent more than $50. That means the repeat customer would have to have spent $450 in order to make the average $150.

(This surprise is why repeat customers can be so worthwhile to target. Their orders have to make-up for one-time customers).

This bigger picture is where you should be operating from, not just looking at a single metric in isolation. That's why the Store Analysis in Repeat Customer Insights gives you a view into all of these metrics and I keep building dashboards that focus on different areas by combining metrics.

Next I'll get into the details about how the metrics shift which is vital for operation.

Eric Davis