The Value of Calculating Your
Repeat Customer Rate
Every store has two types of customers: New Customers and Repeat Customers. Knowing your Repeat Customer Rate will show you what percentage of customers are coming back to your store to shop again. This is an important factor in customer Lifetime Value. Customer Acquisition Costs (CAC) are one of the highest expenses in the ecommerce world. When you pay buckets of marketing money to Google Adwords, Bing Ads, Facebook Ads and Pinterest, you want to ensure you’re effectively encouraging customers to shop more than once.
Learn how to calculate your Repeat Customer Rate and strategies for increasing repeat purchases. Help increase sales revenue with customer retention and loyalty.
Visualizing a Repeat Customer Rate
A customer who has purchased twice or more from your site.
What is a Paying Customer?
A customer who has purchased once or more. (You might be thinking, but isn’t that all of my customers? No. Remember to exclude customers who created an account but failed to make a purchase. Those customers fall into your Zero Purchased segment.)
Example: You have 250 total customers in your store. Out of those: 25 have never purchased, 150 have purchased once and 75 have purchased twice or more. In this example, your Repeat Customer Rate is 33%.
75 (Total Repeat Customers)/225 (Total Paying Customers) = 0.33
What is a Healthy Repeat Customer Rate?
What statement most closely resembles your product selection?
Example: Shoe company, jewelry store, online apparel retailer
Example: Camera store that also sells camera lenses, bike store that also sells biking accessories
Example: Beauty products, food or beverage companies, electronic vape-companies
Strategies for Increasing Your Repeat Customer Rate
If you sell one main product but customers can still buy accessories, contact them quickly. The most crucial window of time to encourage a repeat purchase is very soon after their initial purchase. Send a follow-up email that shows the accessories they could add-on to their purchase.
If your products can be purchased multiple times from your website, wrap your strategy around average time between purchases. If you sell shampoo and a bottle is typically used up after two months, time your emails to go out when a customer would need to order more.
3 Ways to Learn About Your Business from Your Repeat Customer Rate
1. Look at Quarterly Changes to Your Repeat Customer Rate
Q1: January 1-March 31
Q2: April 1-June 30
Q3: July 1-September 30
Q4: October 1-December 31
2. Run a Split Test on Email Timing
3. Evaluate How Each Channel Changes Your Repeat Customer Rate
Tools to Quickly Calculate Your Repeat Purchase Rate
Glew is the best tool for stores who want to quickly view their New vs. Repeat customers. You can easily isolate a timeframe and then filter even further by evaluating customers who came in from a specific Source, Channel, Device or Campaign. This makes the reporting process easy and fast. Instead of retroactively figuring out your Repeat Purchase Ratio, proactively monitor what is and is not working to bring in repeat purchasers.