Customer Satisfaction

Repeat Customer Rate

Introduction

Optimizing Repeat Customer Rate is one of the best ways to increase the loyalty of your customers and expand your brand reputation. By definition, Repeat Customer Rate is the percentage of your customer base that has made more than one purchase (thanks, Liquid Web). More specifically, we like to look at it as how you calculate the loyalty of your customers to the point of repurchasing your products. While the metric seems simple on the surface, it gives valuable insights into areas of future growth and improvement. We'll take you through how to calculate this metric, how to understand it in the context of your industry, and how to apply it to the platforms you're using now.

How to Calculate Repeat Customer Rate

You can calculate Repeat Customer Rate by dividing the number of repeat customers by the total number of customers. Repeat Customer Rate can be assessed for various time-periods (i.e. day, week, month, year) and, if your repeat customers are tied to certain products or campaigns, you can assign a specific rate for each.

If you’re confused about how to differentiate repeat customers from the total number of customers, we’ve included some nifty definitions and examples below:

  • Repeat Customers are those who subscribed to your product or service and return to your business within a period.
  • Total Number of Customers is the total number of your product or service subscribers for a specified period. It includes one-time subscribers and repeat customers.

When choosing what to include in your calculations, remember: consistency is key! That means, if you decide to include XYZ in your Repeat Customer Rate for the month, you should include it in the next month’s Repeat Customer Rate as well. Having consistent metrics will allow you to identify the causes of good or bad performance better. For instance, if the number of your customers is higher in August than in July, but your repeat customer rate decreases, then it may be because your customers are not satisfied with your product or service.

Connecting Repeat Customer Rate to Your Business

Again, as you begin (consistently) monitoring Repeat Customer Rate, you’ll be able to find insights specific to your strategy. Of course, it’s also important to understand your Repeat Customer Rate in relation to your broader industry. To help you know what to expect, we’ve included a list of average Repeat Customer Rate per industry:

  • Food Products - 24.5%
  • Cosmetics - 25.9%
  • Apparel - 26.0%
  • Pet Products - 31.5%
  • Sports Clothing - 33.0%
  • Media and Entertainment - 43%
  • Travel & Lifestyle - 36%

Further, while you can find the total number of customers from many channels, we’ve identified popular platforms that are particularly relevant to Repeat Customer Rate. These may be good places to begin if you’re getting started with this metric:

  • Shopify: This e-commerce company offers Repeat Customer Rate on its Analytics Dashboard. Click here for more information.
  • Stripe: While this platform doesn’t directly offer Repeat Customer Rate, you can find a related metric called Churn Rate, which, inversely, addresses the rate at which customers stop subscribing/purchasing from your business.

Tracking Repeat Customer Rate with Lido

While Repeat Customer Rate is easy to calculate, it’s important to keep in mind that Repeat Customer Rate is one of many valuable metrics to track your performance. If you don’t want to spend hours at the end of the month juggling numbers from your Shopify and Stripe accounts, consider trying Lido. Lido can help you build a dashboard to monitor your data and give a look into how your key metrics (such as Repeat Customer Rate) change over time. With that, we invite you to check out our integrations for the following platforms below:

Shopify
Stripe

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