What is repeat purchase rate?
Repeat purchase rate is a metric that measures the percentage of customers who made a repeat purchase with your brand within a set time compared to your overall customer base. It measures the percentage of customers who completed two or more purchases during a set time frame.
While repeat purchase rate is generally used for the e-commerce industry, a similar concept exists in the SaaS industry called renewal rate.
How to calculate repeat purchase rate?
To calculate the repeat purchase rate, divide the ‘number of customers who purchased more than once’ from your company during a given time frame by the ‘total number of customers’ who purchased during the same period.
Now, multiply this number by 100 to express the repeat purchase rate as a percentage.
Formula for calculating repeat purchase Rate
Real-life example of repeat purchase rate
You run a small e-commerce company and you had a total of 5,000 customers last year. Out of those, 900 customers purchased more than once from your company.
Therefore, your repeat purchase rate would be: 900/5000 x 100 = 18%
What’s considered a good repeat purchase rate? (benchmark)
A good repeat purchase rate sits between 20% - 40%. A repeat purchase rate below 20% might be bad for your company and indicate a problem.
According to Moran Khoubian, Senior Director, Ecosystem & Community at Yotpo, “Average eCommerce retention rates differ based on industry, size, and business model, but they typically sit somewhere between 15% to 30%.
Online retailers have an average repeat customer rate of 28.2%.
Ways to increase your repeat purchase rate
- After-sales service: 87% of customers will make another purchase if they had a good first experience. Once you sell your product/service to the customer, your job doesn't end there. It is just the beginning of building a strong customer relationship and loyalty. Follow up with your customers, ask for their feedback and constantly provide good customer support.
- Send re-engagement emails: Re-engagement emails are sent to customers who haven’t bought from you in a while. You may also include some incentives in your mail to drive more conversions. Check out some re-engagement email templates you can use today
- Use social proof to win repeat purchases: Positive reviews make 91% of consumers more likely to use a business. You need to exhibit your positive reviews and user-generated content in order to win more repeat purchases.
Also Read: Related Metrics
- Net Promoter Score
- Customer Churn Rate
- Customer Lifetime Value
- Customer Retention Rate
- Customer Satisfaction Score (CSAT)
- Renewal Rate
- Customer Acquisition Cost
- First Contact Resolution Rate (FCR)
- Free Trial Conversion Rate
- Daily Active Users (DAU)
- Monthly Active Users (MAU)
- Average Revenue Per User
- Referral Program ROI
- Upsell Rate & Cross-sell Rate
- Viral Coefficient
- Participant Share Rate
- Invitation Conversion Rate
- Net Dollar Retention
- Product Adoption Rate
- Sessions per User