Overview

A key performance indicator, Early Repeat Rate calculates the percentage of new customers making a second purchase within a specific period.

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What is Early Repeat Rate?

The Early Repeat Rate (ERR) is an essential measurement facilitating the understanding of a business’s ability to convert first-time buyers into repeat customers within a set timeframe. Typically, ecommerce companies look at this metric during the early stages following a customer’s first purchase. For instance, 30, 60, or 90 days are practical periods to evaluate a brand’s capacity to entice customers to make that crucial second purchase.

Formula

Early Repeat Rate (ERR) = (Number of customers making a second purchase within X days / Total number of new customers) X 100%.

Example

If an ecommerce website gained 1,000 new customers in January, and 200 of those customers made a second purchase within 30 days, the Early Repeat Rate for that period would be (200/1000) x 100%=20%.

Why is ERR important?

The Early Repeat Rate ERR metric carries significant importance as it gives an instant glimpse into the efficacy of a customer retention strategy. It reflects the company’s success in cultivating customer loyalty and re-engagement, which invariably boosts profitability. It also helps businesses identify any pitfalls in their customer satisfaction or re-engagement processes.

Which factors impact ERR?

The Early Repeat Rate ERR reflects numerous factors, including product quality, trust in the brand, customer service quality, and the post-purchase experience. Moreover, the nature of the product or service offered may influence the repurchase timeline. For example, perishable goods or subscription-based services may see a higher ERR than high-value purchases such as electronics.

How can ERR be improved?

Improving the Early Repeat Rate ERR begins with initially providing a satisfying purchase experience. It continues with proactive post-purchase communication, personalized email marketing, customer loyalty programs, and special promotions for first-time buyers. A seamless checkout process, excellent customer service, and speedy delivery are also integral to securing that all-important second purchase.

What is ERR’s relationship with other metrics?

The Early Repeat Rate (ERR) correlates strongly with other key ecommerce metrics such as Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLV). A high ERR corresponds to a low CAC and a high CLV, signaling greater profitability for the business. Conversely, a low ERR is suggestive of a higher CAC, lower CLV, and a potential need to adjust the customer retention strategy.