Using KPIs to Boost Customer Retention and Drive Revenue

So often the founders we work with in Sistahbiz have a tendency to decide to do something without deciding how we will measure success. Too often, we set out to fix revenue problems in the business without deciding how to measure whether we’re achieving them. If you want to take your retention strategies to the next level, you need to lean on data—and that starts with tracking the right KPIs to boost customer retention. This blog post is your challenge to choose a vision for customer loyalty, set clear retention goals, and let the numbers guide you to success. Here’s what I mean.

What Are Core Metrics and KPIs?

Core metrics and key performance indicators (KPIs) are the measurable values that show whether your business strategies are effective. They’re the “receipts” that validate your hard work and keep your business decisions rooted in data rather than guesswork. Examples include retention rate, purchase frequency, and average transaction value (ATV)—all numbers that directly reflect how well you’re retaining customers and growing revenue.

But let’s keep it real—many founders feel intimidated by these metrics. They can seem complicated, overwhelming, or even like a reminder of what’s not working. So what do they do instead of leaning in? Many founders put all their energy into perfecting the strategies and not enough into tracking the metrics that should be guiding those strategies. When that happens, it’s like throwing spaghetti at the wall and hoping something sticks. You might be trying every retention tactic you can think of, from loyalty programs to referral campaigns, but if you’re not measuring the impact of those efforts, how do you know what’s actually working and when to switch or adjust moves?

Sis, I’m here to tell you that KPIs are actually your saving grace. They are the tools that cut through the noise, helping you diagnose problems, spot opportunities, and focus your energy where it matters most.

Why KPIs Are Key to Customer Retention

While important to have them, strategies alone can be unpredictable. Strategies and their results can vary wildly depending on your skillset, business model, resources, and more. But what doesn’t change is the data. What doesn’t lie, is numbers. No matter what strategy you choose – the retention rate is the retention rate – it will tell you whether customers are coming back. The purchase frequency rate is the purchase frequency rate – it will show how often they’re buying. The ATV is the ATV – will reflect how much they’re spending. These KPIs are your truth-tellers. They show what’s working, diagnose what’s missing, and predict what’s next. If you can increase those numbers, your revenue will grow right along with them. Sis, I know you’re doing the most—but if you’re not measuring the most, you’re leaving money on the table.

I want you to rewire your thinking to say to yourself that you actually are going to not just name but lean on a core metric or key performance indicator (KPI) to tell you if something is working and to get a specific result in your company. This blog post is a challenge to you to choose a desire, vision and goal for retention and then select the metrics that will tell you if you’re winning at the effort or not. Let me show you what I mean and why I want you to do this.

Lead with Data to Increase Customer Loyalty

Tracking KPIs isn’t just about collecting numbers—it’s about creating a roadmap to higher revenue and better retention. Below, I’ll walk you through three key KPIs for boosting customer retention and why they matter.

Enjoy Exclusive Privileges!

JOIN THE ULTIMATE SISTAHOOD!

1. Customer Lifetime Value (CLV)

So first don’t freak out if you don’t know this acronym. The business world has a way of making simple things unreachable with special language. Simply put, CLV tells you how much money a customer is expected to bring to your business over their entire relationship with your brand.

Why CLV matters: When CLV increases, so does your revenue and profit. It means you’re getting more money from each customer over time.
Strategies to improve CLV:
1. Upsell or cross-sell complementary products.
2. Offer subscription or membership programs.
3. Create loyalty programs that reward repeat purchases.
4. Focus on exceptional customer service to build long-term relationships.

Heads up, CLV is a long-term metric. Remember, you’re looking at the customer’s total time with your company and placing a dollar value on it. So it can take some time to see if that number is growing. Track it quarterly or annually to spot trends and evaluate your efforts. Check your CRM or financial dashboard for this number.

2. Purchase Frequency

Purchase frequency measures how often customers buy from you within a specific time frame. For example, if a customer makes 12 purchases over a year, their purchase frequency is 1 purchase per month.

Why purchase frequency matters: A higher purchase frequency means more consistent revenue and stronger customer loyalty across your entire customer base. For example, if your average purchase frequency increases from 1 purchase per month to 2 purchases per month, you effectively double your revenue from your entire customer base, all by focusing on this goal alone!
Strategies to improve purchase frequency:
1. Run limited-time promotions to encourage repeat purchases.
2. Use email campaigns to recommend replenishment products.
3. Create bundled offers or discounts for frequent buyers.
4. Gamify purchases with rewards for multiple transactions.

Track this KPI monthly or quarterly to see how your efforts are paying off. Most e-commerce platforms and CRMs can calculate this for you.

3. Churn Rate

Churn rate reflects the percentage of customers who stop buying from you within a specific period.

Why it matters: A lower churn rate means you’re retaining more customers, which directly impacts profitability.
How to improve it:
1. Follow up with lapsed customers through re-engagement campaigns.
2. Collect feedback to understand why customers leave.
3. Offer incentives like discounts or freebies for returning customers.
4. Provide top-notch post-purchase support to build loyalty.

Keep an eye on churn rate monthly or quarterly. Your CRM or subscription management tool is your best friend for tracking this metric.

Ready to Use KPIs to Boost Customer Retention?

Sis, if you’re serious about growing your business, it’s time to put data in the driver’s seat. Whether you’re focusing on Customer Lifetime Value, Purchase Frequency, or Churn Rate, these KPIs will guide you toward smarter decisions and better results. At Sistahbiz, we help Black women entrepreneurs build data-driven retention strategies through our Customer Retention Planning Workgroup and tools like the customized goals page in our app, where you can track your metrics and celebrate your wins.

Take the first step toward predictable revenue by joining the Sistahbiz community. Become a member today or explore Sistahbiz Business Coaching for tailored support.

Sistahbiz is the leading business community for Black women entrepreneurs committed to collaborative planning, coworking, and growth.