Introduction
Having the right Key Performance Indicators (KPIs) in place for your beauty subscription box business is essential for tracking and measuring performance. Knowing which metrics best represent your overall business goals, and how to track and calculate them, is crucial to setting your business up for success.
Below is a list of the top seven KPIs that need to be tracked and calculated to gain actionable insights into your business performance. These metrics will help you improve marketing efforts, customer experience, and overall profitability.
- Average customer lifetime value
- The number of subscribers retained
- Customer acquisition costs
- Customer Satisfaction Score
- Monthly revenue growth rate
- Order Fulfillment Cycle Time
- Average order value
Average Customer Value (CLV)
Definition
Average Customer Value (CLV) is a metric used to measure the total amount of revenue generated by a customer during their relationship with a business. It is calculated by taking the total amount of revenue generated by a customer and dividing it by the total number of customers.
Benefits of Tracking
Tracking average customer lifetime value (CLV) is important for any business, but especially for beauty subscription box companies. CLV tracking can help businesses understand how much they are earning from each customer and how to best target their marketing efforts and attract more customers. Additionally, tracking CLV can help businesses understand their customer loyalty and what they can expect to do with a customer during their relationship.
Industry Benchmarks
The industry benchmark for average customer value (CLV) varies depending on the company and the market in which it operates. Generally, businesses should aim for a CLV of at least 0 per customer.
How to calculate
The average customer value (CLV) is calculated by taking the total amount of revenue generated by a customer and dividing it by the total number of customers.
Calculation example
For example, if a beauty subscription box business generated 0 in revenue from 10 customers, their average lifetime value (CLV) would be .
Tips and tricks
- It’s important to track average customer value (CLV) over time to spot any changes in spending or customer loyalty.
- Be sure to track CLV for different customer segments or demographics to better understand your customer base.
- Set goals for average customer value (CLV) and track progress toward those goals.
The number of subscribers retained
Definition
The number of subscribers retained is a key performance indicator (KPI) that measures the percentage of customers who renew their subscription to a beauty subscription company. This is an important metric to track in order to understand customer loyalty and satisfaction.
Benefits of Tracking
Tracking the number of subscribers retained provides valuable insight into customer satisfaction and loyalty. It is also an important metric for evaluating the success of marketing and promotional campaigns, as well as the effectiveness of customer service.
Industry Benchmarks
The average retention rate for beauty subscription box companies is around 70%. This rate is higher for companies that offer premium services, such as custom boxes, as well as for companies that offer more value-oriented subscriptions.
How to calculate
Calculation example
For example, if a beauty subscription business had 100 subscribers at the start of the period and 90 subscribers at the end of the period, the number of subscribers retained would be:
Tips and tricks
- Monitor the retention rate of different customer segments to identify areas of opportunity.
- Analyze the reasons for customer churn and take action to address it.
- Reward loyal customers with special offers and discounts.
- Improve customer service to ensure customer satisfaction and loyalty.
Customer acquisition costs
Definition
Customer acquisition cost (CAC) is a metric used to measure the cost of obtaining an additional customer. It measures the cost of marketing, sales, and other activities required to acquire a new customer. It is expressed as a ratio of the total cost of sales and marketing divided by the number of customers acquired.
Benefits of Tracking
CAC tracking is a key performance indicator for beauty subscription box companies. It helps measure the effectiveness of a company’s acquisition strategies, as well as its ability to recoup the cost of customer acquisition. It also helps identify areas for improvement, such as increasing customer lifetime value.
Industry Benchmarks
The average CAC for beauty subscription companies is between and . This range depends on customer demographics and the type of products offered. The lower the CAC, the better, as it indicates that the company is able to acquire new customers at low cost.
How to calculate
Calculation example
For example, if a beauty subscription business spends ,000 on sales and marketing and gains 10 new customers, its CAC would be 0.
Tips and tricks
- Track CAC regularly to ensure that the business is acquiring customers at a profitable rate.
- Analyze the effectiveness of the company’s acquisition strategies by comparing CAC to its customer lifetime value.
- Identify areas for improvement, such as increasing customer lifetime value.
Customer Satisfaction Score
Definition
Customer Satisfaction Score (CSAT) is a simple metric used to measure the level of satisfaction customers have with their experience at a business. It’s calculated by surveying customers with a question like, “How satisfied were you with your experience?”, and asking them to rate their satisfaction on a scale of 1-10. The average of all scores received is the CSAT score.
Benefits of Tracking
Tracking customer satisfaction scores provides valuable insights into the customer experience. It provides an easy way to identify areas for improvement and allows companies to measure the impact of the changes they implement. Additionally, customers who are happy with their experience are more likely to be loyal and recommend your business to others. Tracking the CSAT allows businesses to monitor the success of their customer service efforts.
Industry Benchmarks
The average CSAT score for beauty subscription box companies is 8.5 out of 10. This score may vary depending on the type of subscription box, customer base, and customer service policies. It’s important to track your own CSAT score over time so you can gauge the impact of the changes you make.
How to calculate
Calculation example
For example, if a beauty subscription box received 10 ratings of 8, 9, 8, 10, 9, 9, 10, 8, 8, 7, the CSAT score would be calculated as follows:
Tips and tricks
- Send surveys regularly to gauge customer satisfaction.
- Encourage customers to provide feedback on their experience.
- Analyze customer feedback to identify areas for improvement.
- Use the CSAT score as a measure of customer service success.
Monthly revenue growth rate
Definition
Monthly Revenue Growth Rate (MRGR) is a Key Performance Indicator (KPI) used to measure revenue growth for a beauty subscription business in a given month. It provides a measure of revenue changes from period to period and allows business owners to track their progress towards their goals.
Benefits of MRGR Tracking
- Having an accurate measurement of revenue growth helps business owners better understand their performance and identify areas for improvement.
- It allows business owners to make informed decisions about their strategies, such as whether to focus on increasing sales or reducing costs.
- It can provide useful insights into customer behavior and trends, helping to inform marketing and sales strategies.
Industry Benchmarks
Industry benchmarks for MRGR vary by industry and company size. Generally, companies should aim for an MRGR of at least 5% per month, with higher growth rates indicating strong performance.
How to calculate
To calculate the monthly revenue growth rate, you will need to use the following formula:
Calculation example
If a beauty subscription vault business had revenue of ,000 in May and ,100 in June, their MRGR for the month would be calculated as follows:
Tips and tricks
- Track MRGR on a monthly basis to better understand your business performance.
- Compare your MRGR to industry benchmarks to gauge your performance.
- Use MRGR in combination with other KPIs, such as customer acquisition cost (CAC) and customer lifetime value (CLV), to better understand your business.
Order Fulfillment Cycle Time
Definition
Order fulfillment cycle time is a business KPI that measures the time it takes for a business to receive an order, process it, and ship it to the customer.
Benefits of Tracking
Tracking order fulfillment cycle time is beneficial because it allows companies to identify areas where their workflow could be improved. Knowing how long it takes for the business to process an order can help them find ways to reduce delays and ship orders faster. It also allows businesses to set realistic expectations for customers, so they know when to expect their orders.
Industry Benchmarks
Industry benchmarks for order fulfillment cycle time vary by industry and type of product being shipped. Generally, companies should aim to fulfill orders within two days of receiving them. That said, some companies may have longer lead times due to the complexity of their products or the size of their inventory.
How to calculate
The formula for calculating the order fulfillment cycle time is as follows:
This formula measures the time it takes for the company to process and ship an order, from the time it is received until it is shipped to the customer.
Calculation example
For example, if a company receives an order on January 1 and ships it on January 3, the order fulfillment cycle time is two days.
Tips and tricks
- Track order fulfillment cycle time as often as possible to identify delays that could be improved.
- Set realistic expectations for customers, so they know when to expect their orders.
- Consult industry benchmarks to ensure your processes meet industry standards.
- Implement changes to reduce delays and ship orders faster.
Average order value
Definition
Average order value (AOV) is a measure of the average amount of money that customers spend per purchase. It is calculated by dividing the total turnover by the total number of orders in a given period.
Benefits of Tracking
AOV is a useful metric for understanding customer behavior and determining a company’s financial performance. It can be used to measure the effectiveness of marketing campaigns and identify potential areas for improvement. It also helps identify customer segments with high AOV and target them for special offers.
Industry Benchmarks
The average order value of beauty subscription boxes varies by region and product type. Generally, the AOV ranges from to . However, it may be higher or lower depending on product pricing and promotions offered.
How to calculate
Calculation example
For example, if a beauty subscription vault company had total revenue of 0,000 in a given month and a total of 2,000 orders during the same period, the average order value would be 50 $.00.
Tips and Tricks for KPIs
- Track AOV over time to identify trends and changes in customer behavior.
- Monitor AOV for different customer segments to identify potential areas for improvement.
- Compare AOV between different marketing campaigns to determine which ones perform better.
Conclusion
By using the seven key performance indicators listed above, beauty subscription box business owners can gain valuable insights into their performance that can be used to determine improvement strategies. Therefore, it is essential to have these KPIs properly in place, diligently track them and measure their results in order to have the best understanding of business performance.
The KPIs listed above are a great starting point for any business, and by regularly tracking and measuring their progress, beauty subscription box business owners can make more informed decisions and drive their business to success. .
- Home
- Average customer lifetime value
- The number of subscribers retained
- Customer acquisition costs
- Customer Satisfaction Score
- Monthly revenue growth rate
- Order Fulfillment Cycle Time
- Average order value