Strategies to Increase Your Repeat Purchase Rate

Every eCommerce business owner invests heavily in marketing their products or services online. The best measure of success is a strong repeat customer rate.

Repeat customers bring eCommerce businesses many advantages, including a loyal customer base and higher profitability. Measuring this key performance indicator or metric requires that you know how to calculate the repeat purchase rate.

In this post, we cover the repeat purchase rate formula and customer retention strategies to enable you to make the most of your efforts. Ready to begin?

What is a Repeat Purchase Rate?

In the context of an online store, a repeat purchase rate (RPR) is expressed as a percentage that looks at your total customer data in terms of purchases made and considers which customers buy from you repeatedly (more than once) over a given period (such as monthly, quarterly or annually).

The RPR is also called a repeat customer rate, a reorder rate or a customer retention rate. 

In eCommerce, a high PRP means customers are happy to buy from your business repeatedly, increasing purchase frequency and thus boosting customer loyalty and profitability.

According to industry standards, the average RPR you should aim for is between 20% and 35%. However, the higher your RPR, the better for your business. It’s also important to remember that different products have different usage time horizons.

For instance, if you sell laptops and computers online, you may attract repeat customers who return to purchase laptop cases and accessories if they are satisfied with your product offerings and customer service.

Why is The Repeat Purchase Rate Important

Tracking and aiming to boost your RPR has many advantages for your business. It enables you to monitor your business’s performance and marketing strategies’ effectiveness.

It’s also about seeing whether your customers perceive good value in your product or service. In addition, there are many other benefits of keeping tabs on your RPR.

Here are a few remarkable ones worth mentioning:

• It leads to increased customer lifetime value (CLV).
• Improves your brand recognition.
• Boosts customer loyalty.
• Indicates customer satisfaction.
• It allows you to scale your business faster without costing you too much money.
• Enables you to upsell and cross-sell to existing customers.
• Contributes to revenue growth and stability.
• Introduces cost efficiencies in your marketing efforts.
• Enhances word-of-mouth marketing.
• Offers valuable insights into customer behaviour and preferences.
• Gives your business a competitive advantage through long-term growth and sustainability.

Thus, every online business should encourage loyal customers and boost their experience to ensure they see returning customers for a better bottom line.

How to Calculate Your Repeat Purchase Rate

Measuring customer retention is essential. However, you need clean customer data to ensure your repeat purchase rate calculation is accurate. This means you will gain valuable insights into your RPR metric.

The formula for calculating your eCommerce repeat purchase rate is as follows:

Repeat Purchase Rate = Number of Repeat Customers/Total Number of Customers x 100

Let’s take a look at an example. Say that you have 500 customers. 153 of these are repeat customers who made more than one purchase over your predefined period. We take 153 and divide it by 500 to give us 0.306. We then multiply this by 100 to give us the RPR percentage, which equals 30.6%.

Always aim for a high repeat purchase rate. By encouraging repeat purchases through various marketing strategies and providing excellent customer service, your customer acquisition cost (CAC) will decrease while ensuring your business runs profitably.

How to Increase Your Repeat Purchase Rate

While gaining new customers is essential, you also want to boost customer engagement and loyalty.

Below, we outline several strategies you can follow to achieve this and reap the rewards of multiple customer purchases from the same buyer.

Customer Experience Enhancement

First, you need to focus on enhancing your customer experience (CX) and customer satisfaction levels.

For this, you’ll need to do the following:

• Improve product quality: Ensure that your products are of high quality. Attracting customers’ attention is more than just presenting beautiful visuals on your website. It’s about offering them products that match the value for money they pay.

• Offer exceptional customer service: Do your customers have questions or concerns? Make it easy for them to reach out to you. Once they’ve done this, aim to resolve their issues as quickly and professionally as possible. Ensure you have different communication channels, providing an omnichannel customer service experience.

• Simplify the purchase process: The process can get bogged down in details. You need to make it as simple as possible. By ensuring you offer guest and user checkout options, streamlining the payment by offering tap to pay contactless payments through a reliable payment services provider, and accepting multiple forms of currencies, you’ll help your customers press the “buy” button quickly.

• Personalise the shopping experience: Dynamic pricing, personalised emails with special offers, and suggested items based on past shopping history can create a more personalised shopping experience, encouraging repeat purchase rates from your online store.

By enhancing your customer experience, you’re more likely to boost customer loyalty. Let’s discuss ways to do this in more detail below.

Loyalty Programs and Incentives

Want to reward your loyal, repeat customers? There are three main strategies you can employ in this regard.

Let’s see them below:

• Launch a loyalty rewards program: Implement loyalty programmes to encourage more than your customer’s initial purchase. A loyalty programme can include giving discounts to loyal customers, helping them earn points, or reaching certain tiers when they shop with you. This way, your business benefits, and the customer benefits as well.

• Offer exclusive member discounts: Another good idea is to create a membership club for loyal customers. These customers can receive exclusive member discounts, which means they’ll enjoy a sense of exclusivity while getting a lower price for the items they need.

• Provide referral bonuses: When you offer customers referral bonuses to inspire others to buy from your online store, you can ensure a second purchase and more. This is a great way to increase the repeat purchase rate.

By introducing loyalty programs and incentives, you’re encouraging your customers to keep buying from you because of your good deals, excellent customer service and refined online offering.

Communication and Engagement

In terms of strengthening customer relationships, keeping existing customers happy and encouraging brand loyalty is a must.

You can follow these strategies:

• Send personalised follow-up emails: Thank your customers for their repeat purchases by integrating email automation for your business. Offer them related products, accessories, or special discounts for loyalty.

• Share product updates and new arrivals: Trends come and go, but loyal customers shouldn’t. If you have new stock coming in, let your loyal customers know about it. This will keep them in the loop and create a sense of exclusivity by encouraging the fear of missing out on your great deals and discounts.

• Create engaging content to retain interest: Take care of customers who want to get to know your business better. Encourage customers to engage with your valuable content online, whether it’s newsletters, blog articles, exciting offers sent in personalised emails, push notifications, social media discounts, etc.

Remember that there are real people behind every purchase. Every person wants to feel unique and valued. By providing a personalised communication experience, you create a bond between your customer and your business that can help add value to both.

Feedback and Improvement

Continuous feedback and improvement are the name of the game. You can’t rest on your laurels once you’ve launched a marketing initiative. You need to track your repeat purchase rate by aiming to convert as many unique customers so they make multiple purchases. Here’s how.

• Request and act on customer feedback: Whether it’s positive or negative, you need to always and quickly acknowledge customer feedback. If it’s good, thank them and try to find out what they liked so that you can do more of the same. If it’s bad, then engage with them to determine where the fault lies so you can quickly resolve it.

• Conduct regular satisfaction surveys: Consider sending out regular customer satisfaction surveys to gauge if your customers are happy with your product and service offering and whether they’re willing to promote your business to others.

• Address customer complaints quickly: In the online space, customer complaints can seriously damage any ecommerce business. That’s why monitoring and regularly keeping track of negative customer behaviour and comments is key to ensuring happy customers and a stronger purchase history.

• Monitor and analyse repeat purchase data: Strong online businesses focus on monitoring and analysing how many customers make additional purchases while ensuring that they achieve a good repeat purchase rate. It’s a cost-effective way to convert one-time customers into loyal customers who keep coming back for more.

• Adapt strategies based on customer insights: Monitoring your RPR is one part of the equation. You need to use it to inform your decisions about whether you’ll introduce better and more competitive pricing, how you’ll encourage and bolster user generated content and how you’ll address customer inquiries for an even better CX.

Monitoring and tracking your performance should be done on an ongoing basis so that you can make informed decisions about your online business and look for new trends or insights that can help create an improved customer experience that encourages repeat buys.

Conclusion

An online business’s repeat purchase rate (RPR) is critical to measuring customer and brand loyalty and strengthening the business’s bottom line.

By keeping your finger on the pulse of your RPR, you can instantly see where your marketing and customer service efforts, pricing and product quality are working and where they are not.

These insights can help you create even more appealing offers that encourage customers to choose your business over competitors.

In short, implement different strategies for encouraging a higher RPR, see what’s working, and make tweaks to keep the repurchase rate as high as possible. This will strongly indicate customer loyalty and brand awareness and encourage many positive outcomes for your business.

Frequently Asked Questions

What other metrics can I track in addition to my RPR?

Other important metrics you should consider alongside your customer repurchase rate include customer lifetime value (CLV) and customer acquisition cost (CAC). These metrics are closely intertwined, and monitoring them in unison will help strengthen your strategy in the future.

What is the difference between a repurchase rate and retention rate?

The repurchase rate focuses on how many customers buy from your business more than once over a certain period, divided by your total number of customers. On the other hand, the retention rate looks at the rate of customers your business has retained or managed to keep over a certain period, irrespective of whether they purchased from your business.