Lifetime KPI Tree

Retention > Lifetime KPIs > KPI Tree

Summary

This report is to help users understand the factors influencing the lifetime value per customer and the purchasing behavior of the acquired customer for a specific period. Also comparing the purchasing behavior of the acquired customers with the customers acquired last year.

Questions the report answers

• What are the key drivers of change in customer lifetime value?
• Are we acquiring quality customers this year compared to the prior year?

How to read the report

Understanding the KPI Card

• Metric Title: Located at the top left corner, this label defines what the KPI is measuring (e.g., Lifetime Value per Customer, Total Order Value). This helps you quickly understand the focus of each card.
• Time Frame: Below the metric title, a time filter label provides context for the period being analyzed.
• Actual Value: The largest figure on the card, representing the KPI’s actual value for the selected period.
• YoY Variance: On the right side of the KPI card, the absolute YoY Variance and YoY Variance % for the metric are displayed.

Color Coding and Icons

• Green: Positive change – increase in the metric value.
• Red: Negative change – decrease in the metric value.
• Yellow: No change in the metric value.

How to read the KPI Tree

The KPI tree provides a holistic view of key performance indicators (KPIs) related to customer lifetime value, enabling you to analyze the relationships between different metrics. Multiple possible patterns can be analyzed using the KPI Tree, for this article let's take an example.

In this example, we are analyzing the KPI Tree with the following key details:

• Filters:
  • First Order Year: Current Year
  • Lifetime Period: LTV 30 Days
• KPI Tree Metrics:
  • Lifetime Value per Customer (LTV): Green
  • Lifetime Average Order Value (AOV): Green
  • Lifetime Orders per Customer: Green
  • Total Customer Count: Red
  • Total Order Count: Red
  • Total Order Value: Red

Key Metric Analysis

1. Lifetime Value per Customer (LTV): Green

The Lifetime Value per Customer (LTV) has seen an increase, which is a positive indicator that the average revenue generated from each customer within the first 30 days of their lifetime is higher compared to the same period last year. This suggests that, although other metrics may be declining, each customer acquired in the current year is contributing more revenue to the business than customers acquired in prior years.

2. Lifetime Average Order Value (AOV): Green

The increase in Lifetime Average Order Value (AOV) means that customers are spending more per order than they did in the prior year. This metric is critical because it shows that while fewer customers are being acquired (as we’ll see in Total Customer Count), the customers you are acquiring are making higher-value purchases. This could be a result of better product offerings, upsell strategies, or more effective promotions.

3. Lifetime Orders per Customer: Green

An increase in Lifetime Orders per Customer indicates that customers are placing more orders during the 30 days. This is a key driver of the increase in LTV, as the combination of more frequent purchases and higher AOV boosts overall customer value. This suggests that your current customer base is highly engaged and is interacting more frequently with your brand within their first 30 days.

4. Total Customer Count: Red

The Total Customer Count is down, indicating that fewer customers have been acquired in the current year compared to the previous year. While this decrease is a concern, the increase in LTV, AOV, and Orders per Customer shows that the quality of customers being acquired is higher, even if the quantity is lower.

5. Total Order Count: Red

The Total Order Count has also decreased, which aligns with the decrease in the Total Customer Count. Since fewer customers have been acquired, it follows that there are fewer total orders placed. However, the increase in Orders per Customer indicates that those customers who are acquired are more engaged, placing multiple orders.

6. Total Order Value: Red

Finally, Total Order Value is down, reflecting the decrease in Total Customer Count and Total Order Count. Despite higher individual spending and frequency of purchases, the overall revenue is lower because of the reduced number of new customers being acquired.

Glossary

Lifetime Average Order Value

The average order value over the lifetime of customers. It is calculated by dividing the total order value by the total order count.

Lifetime Orders per Customer

The average number of orders placed by customers over their lifetime. It is calculated by dividing the total order count by the total number of customers.

Lifetime Period

The Lifetime Period refers to the specific time frame used to measure a customer's spending from the date of their first purchase. This standardized period allows for consistent comparisons across customer segments by capturing customer behavior within a defined duration, such as 30 days, 90 days, 1 year, or 2 years.

Lifetime Value per Customer

The average lifetime value per customer. It is calculated by dividing the total order value by the total number of customers.

Total Customer Count

The total count of unique customers who have made at least one purchase. It is calculated by counting the distinct customers.

Total Order Count

The total number of orders placed by customers over their lifetime. It is calculated by summing the lifetime order counts.

Total Order Value

The total value of all orders placed by customers over their lifetime. It is calculated by summing the lifetime order values.