Overview

Repeat Purchases Rate measures the success of a company in retaining customers, with the number of repeat purchase customers divided by total customers.

What is Repeat Purchases Rate?

Repeat Purchases Rate (also known as Repeat Purchase Rate or Repurchase Rate) is a metric that is used to measure the success of an ecommerce company in retaining customers. The Repeat Purchases Rate formula is the number of repeat purchase customers (or those customers that have made multiple purchases from the company) divided by the total number of customers. This metric can provide insight into the effectiveness of customer retention strategies and can help ecommerce companies identify opportunities for improvement when it comes to customer loyalty.

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.