Boosting Your Repeat Customer Rate

In eCommerce, success isn't merely a matter of attracting customers — it's about keeping them. 

The repeat customer rate (RCR) is the heartbeat of any thriving eCommerce business. 

It signifies how many customers return to make additional purchases, reflecting your brand's ability to build lasting relationships and satisfaction beyond one-off transactions. 

Understanding and improving RCR is pivotal to sustaining growth and achieving long-term success for eCommerce brands.

This guide dives into why RCR is crucial, shares tips on improving it, and helps you track and benchmark this eCommerce metric effectively. By the end, you'll be all set to strengthen your customer base through loyalty.

Understanding Repeat Customer Rate

Repeat customer rate is the percentage of your customer base returning to make a subsequent purchase. It's a direct indicator of happy customers and whether your loyalty efforts are on point.

What makes RCR stand out from metrics like customer retention rate is its emphasis on the frequency of return purchases. 

Unlike the customer retention rate that includes any returning customer, RCR looks closely at how often your customers opt to come back, giving a sharper insight into genuine customer loyalty and engagement with your brand.

Why RCR Matters

Repeat buyers are the lifeblood of any healthy eCommerce business that provide tangible benefits:

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• Increased spending - when customers keep coming back, their spending goes up too. As they get more attached to a brand, they can end up spending up to 67% more.
• Lower costs - when it comes to customers, it's better to hold onto the ones you have than constantly chase new ones. Acquiring a new customer can cost you 6-7 times more than keeping an old one. Plus, just a small 5% increase in customer retention could bump up profits by a solid 25% to 95%.
• Increased loyalty - cultivating repeat customers fosters a sense of loyalty that transcends transactions, turning customers into brand advocates. And almost a third of loyal customers stay loyal for life.

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Essentially your repeat buyers, are a treasure trove of steady profits. They increase your revenue per transaction, often return within a shorter sales cycle, and act as organic brand promoters.

How to Calculate Repeat Customer Rate

Knowing how to calculate your RCR accurately is the first step towards taking active measures to improve it. It’s relatively easy to calculate if you have accurate data and this formula…

Repeat Customer Rate Formula

[Repeat Customer Rate = (Number of Returning Customers / Number of Total Customers) * 100]

1. Define the time frame - decide on the period over which you want to calculate the repeat customer rate. This could be a month, quarter, or year, depending on your analysis needs.
   
   
2. Identify total customers - count the total number of unique customers who made at least one purchase during the defined timeframe.
   
   
3. Identify returning customers - from the total customers, identify those who have made more than one purchase within the timeframe.
   
   
4. Apply the formula - use the numbers obtained in the steps above to calculate the repeat customer rate using the formula provided.

RCR Example

Let's say you run an online shop that sells custom t-shirts. Over three months, you had 1,000 different people buy from your store. Out of those, 300 people decided your tees were so awesome that they came back to buy more. 

To calculate your Repeat Customer Rate, you take those 300 repeat buyers and divide them by the total 1,000 customers you had in the quarter. This gives you 0.3. When you turn that into a percentage by multiplying with 100, you get a 30% RCR.

So, what does that 30% mean? It means that out of everyone who bought from you, 3 out of 10 loved your stuff enough to come back for more. This number is vital because it shows not just that people like your tees, but they like them enough to buy again. It’s like having a quick peek into how loyal your customers are and how much they’re vibing with your brand.

Repeat Customer Rate Benchmarking and Averages

How often customers return to shop again varies depending on what’s being sold. 

Some shops sell things that you run out of or want to switch up, like your favourite snack or the latest sneakers. This is why they tend to have higher average repeat customer rates.

On the other hand, brands that sell high-ticket items or things that are rarely replaced, like laptops or furniture, see fewer repeat customers in the short term.
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Across the board, the average repeat customer rate for eCommerce businesses is between 20 to 40%. 

What is a Good Repeat Customer Rate?

Determining a "good" repeat customer rate can be a bit like navigating through uncharted waters – it varies significantly across industries and products. However, armed with the knowledge that a general benchmark of 20-40% mentioned above exists you can start to aim for the stars.

If four out of every 10 customers are returning to your store to make another purchase, you’re probably doing something right. Anything more than that and you’re heading towards e-commerce greatness.

Empathy for your customers' experience encourages you to see beyond just numbers and percentages. It's about understanding the journey your customers undertake with each purchase and ensuring it's one worth repeating. 

So enhancing your repeat customer rate isn't solely about aiming for a good number; it's about ensuring every customer's journey with your brand is memorable and worth revisiting. Here’s how to do it…

Strategies to Improve Your eCommerce Repeat Customer Rate

1. Personalised Customer Interactions

Personalised customer interactions enhance the shopping experience by making each customer feel uniquely valued. A whopping 56% of customers are more likely to come back for more after such tailored experiences. Utilise the data at your disposal to tailor communications, offers, and product recommendations directly to the individual needs and preferences of your customers. 

Or do it the easy way and implement Shopbox's AI-powered personalisation engine. Our platform analyses customer behaviour in real time to create relevant and timely offers that will keep your customers coming back.

Here are five places on your site where you can tailor your customer's experience:

• Order confirmation page
• Order confirmation email
• Homepage featuring curated product recommendations
• Product listing and detail pages
• Rewards program/account login page

2. The Power of Loyalty Programs

Loyalty programs are a key strategy for retaining customers, offering rewards and exclusive benefits that not only incentivise repeat purchases but also foster a sense of community. 

Surprisingly, they are more effective in driving brand loyalty than even excellent customer service or positive search experiences, with over 50% of global consumers saying such programs encourage them to keep buying from a brand.

Check out what Marks & Spencer is doing with their rewards program! They're giving away products, offering free delivery, welcoming new customers with special deals, and even giving out coffee stamps. It's a fantastic way to make sure their customers keep coming back for more.

3. Nurturing Customer Relationships

Building and nurturing customer relationships goes beyond the initial sale, establishing an ongoing dialogue that fosters a deeper connection between your brand and your customers. 

By investing in these relationships, you create a devoted customer base that feels personally connected to your brand, making them more likely to return for repeat purchases.

4. Streamlining the Purchase Process

Streamlining the purchase process is crucial to ensuring a frictionless shopping experience that encourages customers to complete their purchases and come back for more. 

A straightforward and hassle-free checkout process minimises cart abandonment and enhances overall customer satisfaction. Plus, providing post-purchase support, such as easy access to order tracking and a straightforward return policy, reinforces trust in your brand. 

5. Implementing Referral Programs 

Referral programs effectively increase repeat customer rates by incentivising current customers to recommend your brand, which also boosts their likelihood of making future purchases. 

These programs can be strategically linked with up-selling and cross-selling opportunities, encouraging both referrers and referees to buy more products. This approach not only widens your customer base through trusted recommendations but also enhances the overall purchase value.

From One-Time Buyers to Loyal Fans

The repeat customer rate isn't just a number— it's a reflection of the relationships you build with your customers. It tells a story of trust, satisfaction, and connection, pivotal in transforming one-time buyers into loyal fans. 

In the dynamic landscape of eCommerce, where every click could lead to a discovery or a sale, focusing on RCR is not just strategic, it's essential. 

With our AI-powered adaptive shopping experience, we're here to transform your online store from a transactional space to a personalised shopping haven. If you're ready to elevate your eCommerce game, capture the hearts and minds of customers from the first click, and see tangible improvements in your repeat customer rate, let's chat.