What is Repeat Customer Rate?
Repeat Customer Rate measures the percentage of customers who make at least two purchases from your business during a specified timeframe.
Repeat Customer Rate is a customer loyalty and retention metric that helps you measure several different areas of the company. Sales performance, marketing performance, and product quality can all contribute to Repeat Customer Rate.
It’s also a common metric for ecommerce companies to track (and is oftentimes referred to as Repeat Purchase Rate), While attracting new customers is important for ecommerce brands, generating revenue from customers who already know the company and its offerings is a great way to increase revenue and decrease customer acquisition costs.
Further, this metric can help companies understand how customers feel about the product or service they receive. It allows them to use this information to improve customer retention, purchasing frequency, and overall loyalty.
How to calculate Repeat Customer Rate
Repeat Customer Rate is generally measured as a percentage and is calculated using this formula:
Repeat Customer Rate % = (Number of Customers Who've Purchased Before ÷ Total Number of Customers) × 100
For example, if your business has 50 total customers and 20 of them are repeat customers, then your Repeat Customer Rate would be 40%. If you have 100 customers and 10 of them make a second purchase, then your Repeat Customer Rate is 10%.
Track Repeat Customer Rate alongside other important sales performance metrics
On its own, Repeat Customer Rate doesn’t provide a complete picture of your sales team’s performance. That’s why it should always be tracked alongside other service metrics.
Repeat Customer Rate is commonly tracked in a tool like Salesforce. And while Salesforce is a powerful tool, we’ve noticed something interesting: Sales teams and individual sales representatives generally prefer to access and analyze data in operating documents that they already use everyday, like Google Sheets ❤️.
Getting high-quality data into an operating document like a GSheet isn’t necessarily easy, though. Especially if it requires you to spend hours manually downloading CSVs from different sources and copying the data into a rickety, VLOOKUP-filled spreadsheet 👎.
You can use the basic calculation above, but there’s a much more efficient way to calculate your team’s First Contact Resolution rate (and other important customer service metrics): AirOps.
With AirOps, you can automatically sync data from tools like Salesforce to Google Sheets, Notion, AirTable, and other operating documents.
In addition to Repeat Customer Rate, you can use AirOps to easily track other sales performance metrics such as:
- Average Revenue Per User (ARPU)
- Customer Lifetime Value (CLV)
- Net Revenue Retention (NRR)
- Net Promoter Score (NPS
… and more! Get in touch with our team to learn more and get started.
Frequently asked questions about Repeat Customer Rate
Should my organization track Repeat Customer Rate?
As always, the answer to, “Should I track X?” is a resounding, “It depends on your goals!”
Repeat Customer Rate is often considered a critical metric for ecommerce businesses because it’s a great way to measure customer sentiment and satisfaction. It’s especially helpful when paired with related metrics like Customer Lifetime Value.
If you have a high Repeat Customer Rate, that’s a sign that you’re doing something right. If your Repeat Customer Rate is low, it shows that customers don’t feel compelled to buy from you again. Either way, it pays to dig into the root cause to find the reasons behind the numbers.
What’s the criteria for a repeat customer?
A repeat customer has bought at least two products or services from a company. Repeat customers have an established relationship with your company. Because they've shown that they trust your brand, they're more likely to make additional future purchases.
There are many reasons why a customer might make repeat purchases, including:
- The product or service was satisfactory in the first place and provided good value for money.
- The customer has received excellent service from the company, including delivery times and quality of products/services.
- They are loyal customers who enjoy using the product/service and would not consider switching to another brand or supplier.
What is a “good” Repeat Customer Rate?
Attracting and acquiring new customers can be expensive, so it pays to encourage existing customers to buy again.
According to BigCommerce, the top 10% of your most loyal customers spend three times more per purchase than your other 90%. A good Customer Repeat Rate will vary by industry, but it often ranges between 20% and 30%.
A high rate of repeat customers means that your business is doing something right! It means that your product or service meets customer needs and expectations and that you have a good relationship with those customers. If you have a high Repeat Customer Rate, it's worth investigating what's going right so that you can keep doing it.
What are the benefits of having a high percentage of repeat customers?
A high percentage of repeat customers can be valuable to any business. If you have a high percentage of repeat customers, you can build long-term relationships with them and gain insights into what they want from you and how well you're meeting those needs. In addition, this feedback can help you improve your products or services over time.
Qualitative surveys are great ways to get customer feedback because they are more open-ended and allow customers to share their thoughts in a way your company can easily understand.
For instance, NPS (net promoter score) is an excellent way to gauge overall enthusiasm, loyalty, and satisfaction with your brand.
CSAT is another type of qualitative survey that asks customers to rate their experience on a scale from 1-10, with options like "very satisfied" or "very dissatisfied."
The feedback you receive from these surveys will help you adjust how you market your product/service, handle customer service issues, and interact with customers.
How can I improve my organization’s Repeat Customer Rate?
Some of the ways you can increase your Repeat Customer Rate include:
- Provide exceptional customer service throughout all interactions with customers. Happy customers are more likely to buy again.
- Offer discounts or incentives on products or services that encourage customers to return.
- Implement a loyalty program to reward customers who buy from you over and over again.
- Use digital marketing tools like email nurturing, retargeting, and personalized recommendations.
Recommended resources related to Repeat Customer Rate
Measuring sales performance: The 16 key metrics that highly productive teams monitor
How to calculate Average Revenue Per User in Google Sheets using AirOps
How to measure Customer Churn in Google Sheets using AirOps
How to design a winning metrics framework
Building your metrics framework: A 7-step guide