Understanding the Top Seven Fresh Box KPIs

Introduction

Key Performance Indicators (KPIs) are essential metrics used to monitor and measure the success of a business. For businesses in the flower subscription box industry, these KPIs can provide insight into customer loyalty, purchase, and conversion trends, as well as customer cancellations and feedback. In this blog post, we’ll take a look at the top seven Fresh Flowers Subscription Box Business KPIs, to help business owners and entrepreneurs track and calculate their success metrics.

The KPIs explored in this blog post are:

• Average customer lifetime value
• Repeat Customer Rate
• Average customer acquisition cost
• Net promoter score
• Average order value
• Monthly active subscribers
• Cancellation rate

Average customer lifetime value

Definition

Average Customer Value (ACLV) is a metric used to measure the total value of a customer during their relationship with a company. This metric takes into account the initial purchase, as well as any additional purchases or services the customer may receive from the business.

Benefits of Tracking

• Measures a customer’s overall profitability
• Identify the most valuable customers
• Provides insight into which customers are most likely to return

Industry Benchmarks

Average customer lifetime value varies by business type and industry. Generally, the average customer value is between ,000 and ,000.

How to calculate

The calculation of the ACLV is:

Calculation example

For a fresh flower subscription business, the ACLV calculation might look like this:

Tips and tricks

• Track customer acquisition costs separately to better understand ROI
• Track average purchase value and number of repeat transactions separately to better understand customer loyalty
• Track average annual value to better understand the value of a long-term customer

Repeat customer rate

Definition

Repeat Customer Rate (RCR) is a Key Performance Indicator (KPI) that measures the percentage of customers who buy from a business more than once over a period of time. This metric is important for measuring customer loyalty as well as the effectiveness of marketing campaigns and customer service.

Benefits of Tracking

CPR tracking helps companies identify trends and opportunities for improvement. It’s an effective way to measure customer loyalty and the effectiveness of marketing and customer service efforts. Additionally, CPR tracking helps businesses determine which customers are likely to be long-term customers and which customers may need extra attention to keep them coming back.

Industry Benchmarks

The average RCR for companies in the flower subscription box industry is around 25%. This means that around 25% of customers buy from the company more than once over a period of time. This is a good benchmark for business versus business, as a higher CPR indicates high customer loyalty and satisfaction.

How to calculate

RCR is calculated by dividing the number of customers referred by the total number of customers over a certain period of time and multiplying the result by 100. The formula is:

Calculation example

For example, if a flower subscription business had 100 customers in the last month and 25 of those customers purchased more than once, the RCR would be calculated as follows:

Tips and Tricks for KPIs

• Set a realistic goal for CPR and track progress towards it.
• Analyze customer data to identify opportunities to increase CPR.
• Encourage customers to buy more often with discounts, coupons and loyalty programs.
• Test different marketing campaigns and customer service initiatives to see which have the biggest impact on CPR.

Average customer acquisition cost

Definition

The average customer acquisition cost (ACAC) measures the cost of getting a new customer to a business. This metric is used to determine the effectiveness of marketing and sales campaigns, as well as the cost associated with acquiring new customers.

Benefits of Tracking

Tracking the average cost of customer acquisition helps businesses understand the effectiveness of their sales and marketing campaigns. Additionally, ACAC allows businesses to determine how much they can spend to acquire new customers. This information helps them allocate their resources more efficiently and maximize their return on investment.

Industry Benchmarks

The average cost of customer acquisition varies widely by industry. For example, the ACAC for online businesses is generally lower than the ACAC for traditional businesses. Additionally, businesses that have high customer loyalty and repeat business tend to have lower ACAC than businesses that require additional advertising and marketing efforts to acquire each new customer.

How to calculate

The average customer acquisition cost is calculated by dividing the total cost of acquiring new customers by the number of customers acquired. The formula is:

Calculation example

For example, if a company spent ,000 on marketing and advertising efforts to acquire 100 new customers, the average customer acquisition cost would be:

Tips and tricks

• Track average customer acquisition cost over time to identify opportunities for improvement.
• Analyze ACAC for different marketing campaigns to identify the most effective tactics.
• Compare your ACAC to industry benchmarks to determine whether you’re spending too much or too little to acquire new customers.

Net promoter score

Definition

Net Promoter Score (NPS) is a measure of customer satisfaction used to measure customer loyalty and identify areas for improvement in a company’s services and products. This is an important metric for businesses in the fresh flower subscription box industry as it helps them measure customer loyalty, customer satisfaction, and customer engagement.

Benefits of Tracking

• Identifies customer loyalty and satisfaction
• Helps understand customer needs and preferences
• Provides key insights into customer behavior
• Helps optimize customer service and product offerings

Industry Benchmarks

The industry benchmark for NP is 70 and above. A score below 70 indicates room for improvement in customer service and product offerings.

How to calculate

NPS is calculated by subtracting the percentage of detractors (customers who rate their experience 0-6) from the percentage of promoters (customers who rate their experience 9-10).

Calculation example

For example, if a company has 20 Promoters (9–10 rating), 10 Passives (7–8 rating), and 10 Detractors (0–6 rating), their NPS would be calculated as follows:

Tips and tricks to improve NP

• Provide excellent customer service
• Listen to customer feedback and act on it
• Offer discounts, promotions and rewards to customers
• Encourage customer reviews and feedback

Average order value

Definition

Average Order Value (AOV) is a business metric used to gauge the average amount of each sales transaction in the fresh flower subscription box industry.

Benefits of Tracking

Tracking AOV is important for fresh flower subscription businesses because it can help inform sales and marketing efforts and improve overall profitability. AOV can provide insight into the effectiveness of pricing strategies, promotional campaigns, and other customer acquisition strategies. Additionally, AOV can be used to identify customer segments and track customer lifetime value.

Industry Benchmarks

The average order value varies by industry and typically ranges from to .

How to calculate

Average order value (AOV) is calculated by dividing total revenue by the number of orders. The formula is:

Calculation example

For example, if a fresh flower subscription business has total revenue of ,000 from 100 orders, the average order value would be calculated as follows:

Tips and Tricks for KPIs

• Monitor AVO for changes over time to identify the impact of different marketing campaigns and pricing strategies.
• Compare your AOV to industry benchmarks to understand how you perform against other companies.
• Segment customers by AOV to identify high-value customers and focus on retaining them.

Monthly active subscribers

Definition

Monthly Active Subscribers (MAS) is the Key Performance Indicator (KPI) used to measure the number of subscribers who actively use the fresh flower subscription box service during a given month.

Benefits of Tracking

Tracking monthly active subscribers is important in evaluating the performance of any fresh flower subscription business. It helps identify existing customer engagement and loyalty, measure the effectiveness of marketing campaigns, and provide insight into customer behavior.

Industry Benchmarks

The benchmark interval of average monthly active subscribers depends on the type of industry and the size of the company. Generally, companies with a high number of monthly active subscribers (MAS) indicate a higher level of customer engagement and loyalty.

How to calculate

The formula for calculating monthly active subscribers is:

Calculation example

For example, if a fresh flower subscription business has 500 subscribers in January and 400 subscribers in February, the monthly active subscribers for February would be:

Tips and tricks

• It’s important to track your company’s monthly active subscribers (MAS) over time to identify trends and customer engagement.
• Track customer engagement through other metrics like average order value (AOV) and customer lifetime value (CLV).
• Use customer feedback surveys to understand customer satisfaction and identify areas for improvement.

Cancellation rate

Definition

Cancellation rate measures the percentage of canceled orders out of total orders. This metric helps in understanding customer satisfaction and loyalty for the flower subscription box industry.

Benefits of Tracking

• Assess customer satisfaction
• Gain insight into customer behavior
• Identify potential problems and opportunities
• Improved marketing and delivery strategies

Industry Benchmarks

The industry benchmark for cancellation rate is typically 5-10%. Anything above this indicates that there are issues with customer satisfaction, delivery, or product quality.

How to calculate

Calculation example

If a flower subscription business has 100 orders and 10 orders are canceled, the cancellation rate would be calculated as follows:

Tips and tricks

• Regularly monitor cancellation rates to watch for any changes or trends
• Analyze reasons for customer cancellations to better understand customer preferences
• Focus on improving customer satisfaction to reduce cancellation rate

Conclusion

By understanding and tracking the seven Fresh Flowers subscription box KPIs above, business owners, entrepreneurs and managers have access to the data they need to make informed decisions and measure the success of their subscription-based business model.

From tracking average customer lifetime value, to understanding monthly active subscribers and churn rate, each of these KPIs provides valuable insights into the health of subscription-based businesses and empowers business owners. business to stay ahead of the competition and grow successful subscription – based businesses.