Repeat Purchase Rate: Your measure of customer loyalty
Returning customers are the foundation of profitable e-commerce businesses.
Repeat Purchase Rate is one of the most meaningful metrics in e-commerce. It shows not only how many customers return, but also reflects product quality, customer experience and brand strength.
Why Repeat Purchase Rate matters
Acquiring a new customer costs on average 5-7x more than retaining an existing one. Increasing Repeat Purchase Rate by just 5% can boost profits by 25-95%. Returning customers also have a higher average order value and lower service costs.
Calculate Repeat Purchase Rate separately by cohort (first purchase month) to spot trends. A declining rate in newer cohorts is an early warning signal.
How to increase Repeat Purchase Rate
There are proven strategies to boost Repeat Purchase Rate:
- 1 Post-purchase journey: Confirmation, shipping info, delivery confirmation, review request
- 2 Personalized recommendations: Based on purchase history and browsing behavior
- 3 Loyalty program: Points, tiers, exclusive benefits for regular customers
- 4 Reactivation campaigns: Targeted emails to inactive customers
Repeat Purchase Rate vs. Purchase Frequency
Repeat Purchase Rate shows WHO returns. Purchase Frequency shows HOW OFTEN. Both metrics complement each other: A high Repeat Purchase Rate with low frequency indicates potential. Perhaps your customers just need the right incentive for more frequent orders.
- Repeat Purchase Rate: Percentage of customers who bought at least twice
- Purchase Frequency: Average number of orders per customer
- Optimize both: First secure the repeat purchase, then increase frequency
Connection to CLV
Repeat Purchase Rate is a direct driver of Customer Lifetime Value. Every percentage point increase in Repeat Purchase Rate raises CLV. Investments in customer retention therefore pay off directly in higher customer value.