Want to boost customer loyalty and revenue? Focus on your repeat purchase rate. This metric tells you how many customers return to buy again, helping you measure loyalty and predict steady income. Here's what you need to know:
- Formula: Repeat Purchase Rate = (Returning Customers ÷ Total Customers) × 100
- Example: If 420 of 1,200 customers made multiple purchases in Q1 2025, the rate is 35%.
- Why It Matters: Repeat buyers are cheaper to retain, spend more over time, and provide consistent revenue.
To calculate, gather data from tools like Shopify Analytics or export customer data for deeper insights. Use strategies like rewards programs, personalized marketing, and excellent after-sale care to improve your rate and grow your business.
Calculating Repeat Purchase Rate
Here's how to figure out your repeat purchase rate, step by step.
Basic Formula
The formula to calculate repeat purchase rate is simple:
Repeat Purchase Rate = (Number of Customers Who Made Multiple Purchases / Total Number of Customers) × 100
For instance, if you have 500 customers and 150 of them made more than one purchase, the calculation is: (150 ÷ 500) × 100 = 30%.
Calculation Steps
Follow these steps to calculate your rate:
- Choose a specific timeframe (monthly, quarterly, or annually).
- Count the total number of customers during that period.
- Identify how many customers made two or more purchases.
- Divide the number of repeat customers by the total number of customers.
- Multiply the result by 100 to express it as a percentage.
Once you’ve got this, you can move on to pulling your data from platforms like Shopify.
Sample Calculation
Let’s look at an example for Q1 2025:
- Total customers: 1,200
- Customers with multiple purchases: 420
The calculation would be: (420 ÷ 1,200) × 100 = 35%.
When working on this metric, consider the following tips:
- Exclude canceled orders and factor in seasonal trends.
- Monitor trends across several timeframes for better insights.
- Break down the data by product categories or customer groups to identify patterns.
Finding Data in Shopify
Shopify Analytics Dashboard
You can access repeat purchase data directly from Shopify's Analytics dashboard. Head to Analytics > Reports > Customers and look for the "Customer Cohort Analysis" report, which provides insights into customer purchase habits over time.
This report highlights:
- First-time vs. returning customers
- Customer lifetime value
- Time between purchases
For precise calculations, check out the "Customers by Lifetime Orders" report. This report is essential for calculating your repeat purchase rate and preparing data for further analysis.
Data Export Guide
To dive deeper into your repeat purchase rate, you'll need to export customer data. Here's how:
- Go to Customers > Export in your Shopify admin.
- Select "CSV for Excel, Numbers, or other spreadsheet" as the export format.
- Choose "All customers" under the export range.
- Set the export's date range to match your calculation period.
- Include these key fields:
- Customer email
- Number of orders
- Total spent
- First order date
- Last order date
Filter the exported data to focus on customers with more than one order. This will help you isolate repeat purchasers and apply the repeat purchase rate formula discussed earlier.
Pro Tip: Use separate worksheets for different time periods when analyzing your exported data. This makes it easier to spot seasonal trends and evaluate the success of your retention efforts.
Once your data is exported, you’ll be ready to move on to interpreting the results in the next section.
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Reading Your Results
Industry Standards
Different retail sectors see varying repeat purchase rates. Consumable products tend to have higher repeat rates compared to durable goods, as they need frequent replenishment.
Key Influencing Factors
Several factors influence how often customers return to buy again, including the product lifecycle, price point, and overall customer experience.
- Product Lifecycle: Items that need regular replacement or are consumed quickly naturally lead to more frequent repeat purchases. In contrast, products built for long-term use often result in fewer repeat sales.
- Price Point: Lower-priced items typically encourage more repeat purchases, as they involve less financial commitment. Higher-priced products, on the other hand, usually see fewer repeat buys due to their occasional purchase nature.
- Customer Experience: A positive shopping experience is crucial. Fast and reliable shipping, consistent product quality, responsive customer service, easy returns, and effective follow-ups all contribute to building loyalty and encouraging repeat purchases.
Target Rates by Business Size
Your store's size and stage of growth can impact repeat purchase goals. Newer businesses may see lower rates as they work on building a loyal customer base. Larger, established stores often achieve higher rates over time as they refine their operations and customer relationships.
Keep an eye on any ongoing drops or inconsistencies in repeat purchase rates across product categories. These trends can signal problems with customer experience or operational issues, helping you identify areas for improvement and strategies to encourage more repeat purchases.
Increasing Repeat Purchases
Customer Groups
Organizing your customers into groups can help you tailor your marketing efforts more effectively. Here are some ways to segment them:
- Purchase History: Separate customers based on how often they shop (one-time vs. repeat buyers) and their total spending.
- Product Categories: Identify which product types they prefer and group them accordingly.
- Purchase Timing: Spot seasonal shoppers versus those who buy consistently throughout the year.
- Geographic Location: Adjust your approach based on shipping zones or regional preferences.
Shopify offers tools to make creating and managing these segments easier.
Rewards Programs
A rewards program is a great way to encourage loyalty and keep customers coming back. Focus on these features to make your program effective:
- Offer points-based rewards that increase with purchase value.
- Introduce tiered memberships, where customers unlock better perks as they spend more.
- Provide early access to new products or exclusive sales.
- Include personal touches like birthday rewards or anniversary perks.
- Reward referrals by giving bonuses to customers who bring in friends or family.
The key is to ensure the rewards are easy to earn and genuinely appealing.
Targeted Marketing
Use personalized marketing campaigns to re-engage your customers and encourage repeat purchases:
- Email Sequences: Automate follow-ups based on what customers have previously bought.
- Product Recommendations: Suggest items that complement their past purchases.
- Replenishment Reminders: For consumable products, send reminders when it’s time to restock (e.g., day 25 for a 30-day supply).
- Win-back Campaigns: Reach out to customers who haven’t made a purchase in over three months.
Combine these efforts with excellent post-sale support to strengthen customer relationships.
After-Sale Care
How you treat customers after a sale can make or break their decision to return. Here are some ways to deliver outstanding post-purchase support:
- Send order confirmations and shipping updates quickly.
- Provide clear product care instructions to help customers get the most out of their purchase.
- Follow up after delivery to check on their satisfaction.
- Handle any issues swiftly and in a professional manner.
- Share helpful product tips and usage advice through email.
Summary
Building on the calculation methods and customer strategies mentioned earlier, here are the key points to remember.
Main Points
Improving repeat purchase rates can significantly contribute to business growth:
- Formula: Repeat Purchase Rate = (Returning Customers ÷ Total Customers) × 100
- Use Shopify's Analytics Dashboard regularly to track trends and spot opportunities.
- Segment your customers, introduce rewards programs, and implement targeted marketing to encourage repeat purchases.
- Providing strong post-purchase support helps keep customers coming back.
UltraLabs applies these strategies to achieve measurable results.
UltraLabs Services
UltraLabs helps businesses increase repeat purchase rates with these solutions:
- Email Automation: Create personalized campaigns and send timely reminders.
- Store Optimization: Design Shopify stores that make reordering simple and seamless.
- Analytics Setup: Set up tools to track and understand customer behavior.
- Strategic Consulting: Provide actionable advice to strengthen customer retention efforts.