Boosting retention is a goal every brand should dedicate time and resources toward, as it’s much more profitable to sell to an existing customer than constantly trying to acquire new ones. There are plenty of customer retention statistics to back this up.
In attempting to drive higher retention and encourage repeat purchases, though, you’ll need to make sure you’re investing in customer loyalty analytics so you can gauge progress. One of the most important metrics is the repeat purchase rate, often abbreviated as RPR in e-commerce.
This is exactly what it sounds like - the percentage of your customers that consistently return to your online storefront to place orders. It’s a good way to gauge how loyal your audience is. So what is a good repeat purchase rate?
We’ll share some insights and show you how to calculate repeat purchase rate below. You’ll also gain tips on how to increase repeat purchase rate to drive more recurring sales, using a well-structured Shopify loyalty program. Let’s dive in!
What is Repeat Purchase Rate?
As we touched on already, repeat purchase rate (RPR) measures the percentage of your customers who make more than one purchase. It’s one of the simplest indicators of customer loyalty and you’ll need to keep a close eye on it as you start implementing retention strategies.
After all, the customer acquisition cost isn’t going down anytime soon. Our comparison of customer acquisition vs retention shows that it’s much easier and more lucrative to focus on retention over acquisition.
While you need both for a sustainable business model, we see so many brands constantly chasing customers rather than nurturing those that already exist in their ecosystem. What they should be doing is trying to drive more repeat purchases and increasing AOV.
Remember, returning customers spend more on average than new customers. They’re also more likely to try new products that you introduce. Better yet, repeat customers can turn into your brand’s biggest advocates with a well-structured Shopify referral program.
RPR is the pulse check on how well your brand achieves retention goals. It answers a simple question: how many of your customers come back for more?
If it’s low, you might have a product-related problem or it could just be that you need to do a better job re-engaging past customers with compelling offers or new products.
We’ll share more strategies on how to increase repeat purchase rate later. First, we need to go over the repeat purchase rate formula. Learn how to calculate repeat purchase rate below.
How to Calculate Repeat Purchase Rate
Just like the customer retention formula, the repeat purchase rate formula is fairly simple.
Repeat Purchase Rate = (Number of Repeat Customers / Total Number of Customers) x 100
In this case, any customer who has placed more than one order with your business is deemed a repeat customer. Let’s break down how to calculate repeat purchase rate a bit more, though:
- Define Your Time Frame: Choose a period to analyze, such as a month, quarter, or year. A seasonal brand might focus on quarterly data, while a subscription-based business might analyze monthly trends.
- Count Your Total Customers: This includes all the unique customers who made a purchase during your selected time frame. Make sure you’re not double-counting individuals who bought multiple times. This is an easy report to generate within Shopify.
- Identify Your Repeat Customers: All customers who made more than one purchase within the defined period. Again, you can navigate to the Customers tab in Shopify to isolate these buyers.
- Plug the Numbers into the Formula: Divide the number of repeat customers by the total number of customers, multiply by 100, and you have your RPR percentage.
So if you have 1,000 customers place an order in the first quarter and 300 of them made more than one purchase in that time frame, you’d have a repeat purchase rate of 30%.
There are plenty of analytics tools that will show you an ongoing look at your brand’s current RPR so you don’t have to manually calculate the repeat purchase rate formula, too. But let’s shift our focus and figure out, what is a good repeat purchase rate?
What is a Good Repeat Purchase Rate?
Now that you know how to calculate repeat purchase rate, what is a good repeat purchase rate to shoot for?
We want to be clear in saying that there is no universally “good” repeat purchase rate across business as a whole. A car dealership is obviously going to have a way lower RPR than a Shopify supplement brand.
We’ll focus just on e-commerce for the sake of this conversation. That being said, there are a few factors you should keep in mind when weighing your RPR:
- Product Type: Consumables naturally encourage repeat purchases, while luxury or high-ticket items have longer purchase cycles.
- Customer Loyalty Programs: Businesses with well-structured loyalty programs benefit from dramatically higher RPRs.
- Brand Trust and Satisfaction: A strong customer experience, reliable products, and excellent service build trust and influence repeat purchases.
For most eCommerce businesses, an RPR between 20% and 40% is considered strong. This can be broken down further based on industry benchmarks:
- Fashion and Apparel: These industries often see higher RPRs, averaging around 30%-40%, due to frequent new collections and seasonal buying patterns.
- Health and Beauty: Businesses here typically fall between 30-40% as well, especially for consumable products like skincare or supplements that get used up quickly.
- Electronics and High-Ticket Items: These tend to have lower RPRs, around 10%-20%, given the nature of less frequent purchases.
- Subscription-Based Services: Companies with a subscription model often boast RPRs above 50%, as recurring purchases are baked into the business model.
If you aren’t able to find direct benchmarks for your niche, it can be hard to gauge whether or not your repeat purchase rate is healthy or not.
You may need to look into other metrics, like customer lifetime value (LTV). If you have a high LTV relative to your customer acquisition cost (CAC), you’re likely doing a good job encouraging repeat purchases - or at the very least, you have an exceptionally high AOV. You can learn more about customer lifetime value vs customer acquisition cost in our blog if you’d like.
But what if your RPR falls short, and you want to start driving more repeat business? You’re in luck - we’ve got some advice on how to increase repeat purchase rate below.
How to Increase Repeat Purchase Rate
One reason we see brands suffer from a low RPR is they feel like constantly nudging their customers to buy more is going to scare them away for good.
Sure, spamming your audience with constant offers might have the opposite effect - but there are plenty of customer loyalty strategies you can implement that will make a difference in your RPR while creating stronger customer relationships!
But you can even increase repeat purchase rate simply by delivering a better experience for your customers on their initial order and any other touchpoints that follow. Let’s start with how to increase repeat purchase rate there.
Deliver Exceptional Customer Experiences
The entire foundation of customer retention is built on experience. From seamless website navigation to prompt customer service, every interaction matters.
Start by simplifying your checkout process if necessary. The last thing you want is to spend heavily on advertising and have friction at the last minute costing you sales. One-click payments, saved billing details, and autofill options are all options.
You should also make sure you’re engaging customers after their order, too. This can be as simple as personalized thank-you emails immediately post-purchase, but we’ve seen brands take it a step further with handwritten notes in packages.
This is one of the best ways to make customers feel special and get them coming back for more, setting the tone for a long, lucrative relationship. You might even include a discount on their next purchase!
Your support team should be trained to handle complaints quickly and with empathy, turning dissatisfied customers into loyal advocates. Always respond to negative feedback in earnest, as it can not only potentially save a customer from lapsing but show other customers you’re committed to their happiness.
Create a Loyalty Program That Adds Value
A loyalty program is a proven way to keep customers coming back - 83% of consumers say a loyalty program makes them more likely to continue doing business with a brand! If you don’t have one of these programs in place already, you’re leaving money on the table.
It’s not a question of whether you should set up a loyalty program, but rather, how to reward customer loyalty. The possibilities are endless when you use the right platform, like Rivo. Here are just a few customer retention examples you can try:
- Point-Based Rewards: Offer points for purchases that can be redeemed for discounts, free products, or exclusive perks. You can also offer points for everything from social media interactions to reviews.
- Tiered Loyalty Systems: Create levels like “Gold” or “Platinum” with increasing rewards to encourage higher spending. This will bring your most loyal customers out of the woodwork.
- Referral Incentives: Reward customers for bringing their friends, family, or even complete strangers into your ecosystem, creating a virtuous cycle of loyalty. Our blog will show you how referral programs work if you’re interested.
Rivo has helped more than 7,000 brands improve retention, with many seeing a 3.1x improvement in their repeat purchase rate! Request a demo today.
Leverage Personalization
Customers who receive personalized experiences are 60% more likely to become repeat buyers. There are so many ways you can leverage personalization, too.
This could entail more dynamic product recommendations based on browsing history, past purchases, or abandoned carts. A lot of this can be automated with the right tech, too.
It could even be as simple as sending out special discounts or gifts on important dates to show you value your customers personally, be it their order anniversary date or their birthday.
Loyalty segmentation should not be taken lightly, either. Divide your customer base into specific segments, be it high spenders, lapsed customers, or anything that makes sense for your unique brand. Then, you can tailor campaigns accordingly to drive better results.
Stay Top of Mind
While you don’t want to drive customers away with spammy marketing tactics, you do need to stay top of mind with consistent communication. How do you toe that line, though? Simple - offer value in every interaction you have!
This can be early access to sales or limited-edition products to your VIP customers, or it can be educational content such as tips, tutorials, or resources related to your products.
It’s worth setting up win-back campaigns to get dormant customers to come back and make another purchase after it’s been a while, say 6-12 months. You can sweeten the pot with some sort of compelling offer.
Build Better Products (and Introduce New Ones)
If you find that a low repeat purchase rate is the result of product shortcomings, it’s time to go back to the drawing board. Gain feedback on where you’re currently missing the mark and what could be better, and make it happen.
Even if you don’t have product issues, though, developing new lines is one of the easiest ways to get customers to come back and buy something fresh. This is easier for certain brands than others, of course, like apparel, supplements, etc.
Still, any brand can benefit from introducing bundles or subscriptions for frequently used items. There is definitely some way for you to optimize your product line to drive more repeat purchases.
Encourage Feedback and Act on It
There’s one final piece of advice we want to share on how to increase repeat purchase rate. A common reason why loyalty programs fail is brands failing to listen to their audience. Customers want to feel heard, so encourage them to share their opinions and act on what they say.
This can involve post-purchase surveys, or you might even go as far as incentivizing reviews with loyalty points or small discounts. Be quick to respond to negative feedback and make it right, as we talked about earlier.
Share updates with customers on how their feedback has shaped your offerings. If they hear that you took their insights to heart and changed your product, they will likely rush to see the difference firsthand!
Closing Thoughts on the Repeat Purchase Rate Formula
That does it for our guide on how to calculate repeat purchase rate. Beyond the repeat purchase rate formula you’ve also learned what a good RPR looks like and how to increase repeat purchase rate if you’re currently falling short of expectations.
This metric speaks to how well you’re nurturing customer relationships and whether your strategies for encouraging customers to return are paying off or not. Understanding it can help unlock valuable insights that drive sustained revenue and growth.
If you’re not already rewarding customer loyalty, it’s time to start. You’re leaving money on the table. Rivo is here to help you build loyalty programs that boost your repeat purchase rate - schedule a demo today!
