A new concept has emerged where the company’s value is gauged not by conventional financial metrics but by its customer behaviour. This is much easier to track on subscription based business models, but most businesses aren’t such. Rather, they are based on occasional purchases. Identifying the right data at the opportune moment is the challenge. Six metrics have been identified for this. They are active users, heavy active users, forward repeat rate, customer retention rate, new users and frequency. No single metric will provide the solutions, but business analytics will need to be performed on the whole host of data. Moving from two to three metrices, hardly had much incremental value add as pieces were still missing. Doubts still exist on the competitiveness of this scale, but corporates have already started buying into this model.

Source:http://knowledge.wharton.upenn.edu/article/customer-behavior-and-company-value/

Uploaded Date:14 July 2017