What are the best metrics to measure B2B relationship building for customer lifetime value?

2 Customer retention

Customer retention is the percentage of customers who stay with your business over a given period of time, usually a year. It can be calculated by dividing the number of customers at the end of the period by the number of customers at the beginning of the period, and multiplying by 100. Customer retention is a crucial metric for B2B relationship building, as it shows how well you are retaining your existing customers and preventing them from switching to competitors. A high customer retention rate means a high CLV, as retained customers tend to spend more, cost less to serve, and provide more feedback and insights.

3 Customer loyalty

Customer loyalty is the degree of attachment and commitment that your customers have towards your business. It can be measured by using metrics such as net promoter score (NPS), customer effort score (CES), and customer advocacy score (CAS). NPS is the percentage of customers who are likely to recommend your business to others, minus the percentage of customers who are likely to detract from your business. CES is the amount of effort that customers have to put in to interact with your business, such as resolving issues, getting support, or making purchases. CAS is the number of customers who actively promote your business to others, such as through referrals, testimonials, or social media. Customer loyalty is a vital metric for B2B relationship building, as it shows how much your customers trust and value your business. A high customer loyalty score means a high CLV, as loyal customers are more likely to repeat purchases, upgrade services, and provide positive word-of-mouth.

4 Customer engagement

Customer engagement is the level of involvement and interaction that your customers have with your business across various channels and touchpoints. It can be measured by using metrics such as email open rates, website visits, social media mentions, webinar attendance, content downloads, or product usage. Customer engagement is an important metric for B2B relationship building, as it shows how much your customers are interested and invested in your business. A high customer engagement rate means a high CLV, as engaged customers are more likely to learn from your content, provide feedback, and take action on your offers.

5 Customer profitability

Customer profitability is the amount of revenue that your customers generate for your business, minus the costs of acquiring and serving them. It can be calculated by using metrics such as customer acquisition cost (CAC), customer lifetime value (CLV), and customer profitability ratio (CPR). CAC is the total cost of attracting and converting a new customer. CLV is the total profit that a customer generates for your business over their entire relationship with you. CPR is the ratio of CLV to CAC, which indicates how profitable a customer is for your business. Customer profitability is a key metric for B2B relationship building, as it shows how much value your customers bring to your business. A high customer profitability ratio means a high CLV, as profitable customers are more likely to contribute to your growth, innovation, and sustainability.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?