Repeat Purchase Rate

If you have been thinking about checking out how loyal your customer base is, you must add repeat purchase rates to your list of metrics that need to be tracked.

If your customers buy your product for the second time, third time, or even more then you definitely have a good and valuable customer willing to spend for the products you offer.

In this article, you’ll learn about the repeat purchase rate metric, how to calculate it, and other metrics you can track.

What is Repeat Purchase Rate?

Repeat Purchase Rate (RPR) is a metric that is commonly used by many e-commerce businesses to measure the percentage of customers who make a repeat purchase of a product or service that is offered in the market.

It is an important key performance indicator of customer loyalty and the effectiveness of your business’s marketing and customer retention efforts.

Take note that a positive result of repeat purchase rate implies satisfied and happy customers which can increase customer retention and potentially higher customer lifetime value.

Repeat Purchase Rate Formula

The formula for repeat purchase rate is:

For instance, if you had 500 customers in your online shopping store in a given month, and out of those, 200 made a second purchase during that same month, the Repeat Purchase Rate would be:

RPR = (200 / 500) * 100 = 40%

In this example, 40% of your customers made a repeat purchase, indicating a level of loyalty and satisfaction among the customer base.

Repeat Purchase Rate Benchmarks by Industry

Benchmarks for repeat purchase rate could be around 25 – 30% returning customers but it varies from industry to industry. In fact, it may also vary by the niche and company you have chosen because your audience has specific characteristics and purchasing power.

Although according to Alex Schultz, VP of growth at Facebook mentioned that a monthly 20 – 30% repeat customers may mean that your business is doing well.

How to Track Repeat Purchase Rate?

Tracking repeat purchase rate is necessary for understanding customer loyalty and the success of your business. There are several tools and methods you can use to track this important metric:

Customer Relationship Management (CRM) Software: Numerous CRM software programs provide tools for tracking customer purchases, including the number and frequency of repeat purchases. Salesforce, HubSpot, and Zoho CRM are a few well-known CRM platforms with these features.

Google Analytics: The number of returning visitors to a website can be tracked using Google Analytics. You can learn how frequently users return to your website to make additional purchases by setting up specific goals and monitoring user behavior.

Email Marketing Platforms: Platforms like Vibetrace, Mailchimp, Constant Contact, or SendinBlue frequently offer analytics that can assist you track customer engagement and repeat purchase rates by means of email campaigns if you use email marketing to interact with your customers.

Loyalty Program Software: The introduction of a loyalty program can promote repeat purchases, and many loyalty program software solutions, including Smile.io and LoyaltyLion, provide tracking features to track customer engagement and participation.

How often should you check Repeat Purchase Rate?

The frequency of tracking your Repeat Purchase Rate (RPR) depends on your business type, size, and the specific goals you have set. 

Generally, it’s a good idea to monitor RPR regularly to stay informed about customer loyalty and the effectiveness of your retention strategies. 

Here are some considerations for how often you should check your Repeat Purchase Rate:

Monthly Basis:

You can adopt a common strategy used by many businesses, which is to check RPR on a monthly basis. This time frame enables you to spot trends and recognize any shifts in client behavior over a relatively short period of time. 

Quarterly Basis:

Checking RPR on a quarterly basis might be more appropriate if your company sells products or services that are more expensive or have longer sales cycles. This strategy enables you to spot more significant trends and patterns, which can be especially beneficial if your customer base is small or your customer retention rate is steady.

Seasonal Considerations:

Seasonal changes in customer behavior may occur depending on your industry or the nature of your business. In these situations, monitoring RPR seasonally may offer a clearer picture of client loyalty and retention. For instance, e-commerce companies frequently experience an increase in repeat business during the holiday season.

Real-time Monitoring:

Real-time RPR monitoring may be crucial if your online business processes a lot of transactions. With this strategy, you can identify potential problems that could affect customer retention or quickly react to any sudden changes in customer behavior.

Repeat Purchase Rate Calculator

Do you want to calculate your repeat purchase rate? Use our simple calculator below:

Simple Coupon Conversion Calculator

Metrics related to Coupon Conversion

There are several other metrics that are closely related to Repeat Purchase Rate and should be considered when evaluating the performance of your business:

Your business requires a proper report of the best metrics that need to be tracked so it’ll be easier for you to make decisions that will go according to the needs of your business.

Maintaining aa proper and healthy customer base is important because your customers hold the key to the success of your business. In fact, their loyalty will help you keep going in the future without even spending so much on marketing.

One of the best strategies to keep your communication continuous is to use email automation software to promote email campaigns which are believed to be the most effective marketing channel today. Choose Vibetrace to unlock all the features you need from the software!

In fact, VIbetrace also allows you to track metrics like repeat purchase rate and many more.