Active customers are the users who have engaged in a procurement process and completed a purchase from an online store within a certain time frame. Measuring the number of active customers is essential to assess the health of an e-commerce business, identify trends, and drive strategies to foster growth. An active customer portfolio reflects market penetration, customer loyalty, and the effectiveness of promotional campaigns.
Active Customers = Total Number of Unique Customers that Completed a Purchase within a Given Period
Suppose you have an online store, and over a month, you registered 500 unique customers who made at least one purchase. In this case, the number of active customers for that month would be 500.
Why is Active customers important?
- Indicate the success of marketing and promotional efforts for attracting and retaining customers.2. Serve as a key performance indicator, assessing the effectiveness of strategies employed to enhance user experience.3. Provide insights for better forecasting, as well as tailoring products and services to cater to customer preferences.4. Reflect growth in customer loyalty and brand reputation.5. Help identify patterns in customer behavior for improved targeting and personalization.
Which factors impact Active customers?
- Market trends and consumer preferences.2. Seasonal purchasing habits.3. Economic environment and purchasing power.4. Competitor marketing and promotions.5. Product quality and pricing.6. Customer support levels.7. Website effectiveness and ease of use.8. Credibility and trustworthiness of the e-commerce platform.
How can Active customers be improved?
- Enhance customer experience through improved website navigation, personalized recommendations, and superior customer support.2. Implement promotional campaigns such as discounts, referral programs, loyalty rewards, and targeted offers.3. Leverage social media and email marketing for increased discoverability and engagement.4. Optimize product descriptions, images, and reviews for better conversions.5. Regularly analyze consumer behavior patterns and demands, adjusting offerings and strategies accordingly.
What is Active customers's relationship with other ecommerce metrics?
- Conversion Rates: The percentage of visitors who become active customers, reflecting the efficiency of the marketing and sales funnel.2. Customer Lifetime Value (LTV): Assessing the total value a customer brings over their lifetime, active customers help determine the LTV, guiding promotional strategies.3. Customer Retention Rate: The proportion of customers who continue purchasing over time, an increase in active customers enhances retention rates.4. Average Order Value (AOV): Active customers directly affect the income generated through AOV, an essential metric for projecting revenue and growth.