Repeat Purchases Rate

Formula

Repeat Purchase Rate = (Number of Customers Who Made More Than One Purchase / Total Number of Customers) x 100

Example

• Let's say you run an e-commerce store that sells clothing. In a given month, you had 500 customers. Out of those 500 customers, 200 made more than one purchase during that month. To calculate the Repeat Purchase Rate:
• Repeat Purchase Rate = (200 / 500) x 100 = 40%

Why is Repeat Purchases Rate important?

Repeat Purchases Rate is an important metric for ecommerce companies for two main reasons. Firstly, it is an indicator of customer loyalty and satisfaction. Secondly, customers who make multiple purchases are more likely to become devoted, long-term customers who are willing to pay full price or more for items. By monitoring the repeat purchases rate, ecommerce companies can assess the effectiveness of their customer retention strategies.

Which factors impact Repeat Purchases Rate?

There are a few simple steps that ecommerce companies can take to improve their Repeat Purchases Rate. These include offering discounts or loyalty programs to repeat customers, providing engaging content, proactively reaching out to customers with targeted messages, and optimizing the customer service experience. Additionally, companies should provide incentives for customers to keep purchasing, such as free shipping, early access to new products, and exclusive offers.

How can Repeat Purchases Rate be improved?

The success of an ecommerce company’s customer retention strategies will have an impact on the Repeat Purchases Rate. Factors such as the complexity of the buying process and the satisfaction of the customers with their purchases can also influence the metric. Additionally, customers’ expectations of the products and services provided can have an effect on the Repeat Purchases Rate.

What is Repeat Purchases Rate's relationship with other metrics?

Repeat Purchases Rate is closely related to another important metric for ecommerce companies – Customer Churn Rate. Both of these metrics provide insight into the customer experience and customer retention strategies. However, while Repeat Purchases Rate measures the number of customers that make multiple purchases, Customer Churn Rate measures the percentage of customers that abandon a company’s platform within a given period of time. Both metrics can be used to identify opportunities for improvement in customer retention, but they measure different aspects of customer loyalty.