What is Repeat Purchase Rate & How to Increase it? (With Examples)
In e-commerce, trends and technologies are evolving fast. Yet, one important metric continues to be significant for Shopify sellers: the repeat purchase rate. This isn’t simply a number, it’s the key to maintaining a sustainable business. Acquiring new customers remains a priority, of course, but if we can keep them coming back for more, even better.
But what exactly is repeat purchase rate and why should Shopify sellers have it on their radar? In this article, we’ll explore this somewhat underestimated metric and how it plays a role in increasing revenue and customer retention. If you sell on Shopify–or are thinking about it–continue reading to learn all about it.
What is Repeat Purchase Rate?
The repeat purchase rate is an important e-commerce metric. You might see it referred to as RPR. As metrics go, it is pretty straightforward and is an insightful indicator of a store’s success. This shows how a brand fosters customer loyalty and retains its customers.
In simple terms, the repeat purchase rate represents the percentage of customers who come back and make additional purchases after their initial one. As such, business owners know how many previous customers come back instead of exploring the wider marketplace again.
In essence, RPR isn’t only a metric. Rather, it is a reflection of the store’s ability to provide a great customer experience and long-lasting connection. For example, when customers know that your contact center service is reliable, responsive, and cares about their needs, they’re more likely to return.
For Shopify sellers and other e-commerce retailers, the repeat purchase rate is a gauge that demonstrates the brand’s marketing effectiveness as well as its customer service quality.
Why Does Repeat Purchase Rate Matter?
Knowing your repeat purchase rate is one thing, using this knowledge is another. The most successful Shopify sellers use the RPR as a force to drive business success. Here are some of the ways in which sellers can leverage this metric to their advantage.
1. Increase revenue and profitability
When your repeat purchase rate is high, your revenue will reflect this. Many businesses focus on making sales and pay less attention to customer retention. When you concentrate on the overall customer experience, they keep coming back. Customer loyalty translates into a steady revenue stream that boosts your bottom line.
Knowing your repeat purchase rate–and any fluctuations in it–means you can see what is working.
2. Acieve cost-effective marketing
When Shopify sellers retain existing customers and have a strong repeat purchase rate, they save money. This is because keeping existing customers is more cost-effective than acquiring new ones. When customers come back, you’re getting business without spending on customer acquisition campaigns. This frees up resources for other important business matters.
3. Building customer loyalty and brand advocacy
When you build a loyal customer base, they become your marketers, too. Returning customers not only boost your sales but they often become powerful brand advocates too. They write glowing reviews and spread the word about their positive experience. Essentially, they’re free marketing–and because of their lack of bias, they bring people on board readily.
4. Gain a competitive advantage
E-commerce and Shopify are fiercely competitive markets. When a business has a high repeat purchase rate, it stands out as a leader. It’s these Shopify sellers that thrive rather than survive. They outperform competitors, build customer loyalty, and become more recognizable as a brand. And each one of these factors contributes to improving the others, too. Ultimately, focusing on your repeat purchase rate means gaining a competitive edge that can feed itself.
How to Calculate Repeat Purchase Rate?
Calculating the repeat purchase rate on Shopify can help you understand where your e-commerce business stands in terms of its success.
To calculate your repeat purchase rate, you’ll need to find two items of data from your Shopify Analytics. The data needed is only available for customers using the Shopify Plan and higher.
Here is a step-by-step guide to finding the data you need and working out your RPR:
- Log in to your Shopify admin dashboard and find your reports.
- Click ‘categories’, then select ‘customers’.
- Within this section, you need to find two metrics: the Returning Customers report and the Customers Over Time Report.
- Use the Returning Customer Report to produce a figure for a specific amount of time–a quarter or a year, for example. This report tells you about anyone who has made more than one purchase in that time.
- Use the 'Customers Over Time' report for the same timeframe to get an overall figure. This tells you how many different customers have purchased from you in that time.
- Use the following equation to determine your Repeat Purchase Rate:
Repeat Purchase Rate (%) = (Number of returning customersNumber of unique customers ) x 100
10 Powerful Strategies to Improve Repeat Purchase Rate
E-commerce has grown so big that customer loyalty is hard-won. Understanding sales engagement strategies and other tactics can improve repeat purchase rates considerably. Here are some key considerations.
1. Use Post-purchase upsells to instantly generate repeat purchases
One of the best ways to boost your repeat purchase rate is with post-purchase upsells. Think about it - when a customer has just bought an item, their purchase intent is peaking. So, it's the perfect time to hit them with a special post-purchase offer.
Post purchase offers are amazing because they have extremely low friction. For example, with a one-click upsell, there's no need for customers to re-enter their card details or delivery address
To illustrate, let's suppose your customer has just bought a pair of running shoes from your store. After they've confirmed their order, you can serve them a pop-up that offers them a pair of matching socks for 30% off.
Thank you page offers are another awesome strategy to boost repeat customer rate. Data from ReConvert shows that customers come back to view their thank you page 2.2 times per order. This means you can serve these eager customers more related products and cross-sell offers and turn a sizable segment of them into repeat buyers.
2. Personalize product suggestions based on past purchases
Engaging customers with personalized product engagement suggestions can be a game-changer.
One way of personalizing product suggestions is by using recommendation engines. Also called recommenders, these are data filtering systems that predict which products or services a customer is likely to consume. They then market those products and services through advertising.
According to research, the global recommendation engine market size was 1.77 billion USD in 2020–and it’s forecast to expand by 33% each year until 2028.
Shopify itself equips sellers with tools to make personalized product suggestions. The algorithms analyze customer data to suggest products.
These systems are fully automated, which makes it easier for sellers to take advantage of. Successful examples that almost everyone will be familiar with are Netflix’s “You might also like…” and Amazon’s “Customers who bought this also bought…”
3. Implement loyalty programs with exclusive offers
Loyalty programs are great for bolstering repeat purchase rates. They’re a win-win for customers and sellers alike. Loyalty schemes entice customers with exclusive rewards, free gifts, and discounts while sellers reap the benefits of increased retention rates and higher order values.
These programs also create a connection between the customer and the brand, which leads to greater customer lifetime value.
There are a range of loyalty program types. From simple points-based systems, tiered schemes, and paid memberships like Amazon Prime. When you create a loyalty program within Spotify, you need a clear strategy.
You’ll need to start with your goals and build rewards into them. Shopify has built-in tools to help. Ultimately, ensure that whatever you introduce is easy for customers to understand.
4. Engage customers with targeted email campaigns
Though many consider email marketing to be old-fashioned, it’s anything but. This is a great way of boosting repeat purchases. Email is direct and personal. You can inform customers of new productions and promotions as well as other updates. When done right, email campaigns build trust and loyalty around your brand.
It’s worth remembering that even though your email audience is comprised of all your customers, they’re also individuals.
Use segmentation to categorize them into groups depending on their demographics, purchase history, and behavior.
You can then personalize email content to the preferences and needs of each group. Shopify makes it easier to segment your customers to send tailored content.
One of the easiest strategies to boost customer repeat rate is to set-up a simple birthday email automation. For instance, you can use ReConvert to collect customer birthday's on your order confirmation page. Then sync ReConvert with your email software (e.g. Mailchimp, Klaviyo etc) to send customers special offers on their big day.
Seriously, a birthday campaign is one of the biggest bang-for-buck strategy when you consider these according to Experian.com, birthday emails have a
- 481% higher transaction rate than promotional emails
- 342% higher revenue per email than promotional emails.
- 179% higher unique click rates than promotional emails.
5. Leverage remarketing ads on various online platforms
Remarketing means recapturing lost purchase opportunities. It is a compelling strategy that boosts repeat purchase rates. Often referred to as retargeting ads, these are a strategic form of advertising designed to re-engage those who visited your site but didn’t make a purchase.
Remarketing ads are effective because you’re targeting people who have already shown their interest. By keeping your brand in their sights, you can increase sales and turn potential customers into repeat buyers.
Remarketing ads can occur on a range of different online platforms like Facebook, Google Ads, and more. The choice of platform will depend on your audience and their demographics. Thankfully, Shopify users will find various integrations to enable seamless connectivity to these platforms.
6. Build trust and loyalty through exceptional customer service
Customer service matters. It isn’t just about resolving problems; it’s about creating positive experiences. The level of service you provide can often be a deciding factor in whether customers continue to choose your brand over competitors.
Exceptional customer service isn’t a given; it’s the result of deliberate strategies like ensuring
- Prompt responses to customer inquiries and problems.
- Concerns are heard and understood.
- The support team is knowledgeable and empathetic.
- The support team can make decisions to benefit customers.
7. Maintain regular communication through newsletters
Newsletters are a direct line to your customers. Sending a regular newsletter creates a sense of community and makes customers feel valued. Besides this, they’re also a subtle reminder about your existence and what you can offer. As such, newsletters are a great way to nurture customer relationships to encourage repeat purchases.
Successful newsletter communications will mix creativity with relevance and strategy. You need to grab their attention, align with their interests, and be concise. Don’t forget to include visuals and clear calls to action (CTAs) too.
A newsletter can also be dynamic in its content. You can share stories, glimpses of life behind the scenes, how-to guides, industry insights, and more.
Shopify sellers can create newsletters directly from their admin section. There are customizable templates to use, too. You can set up marketing automation, schedule delivery at key times, and use customer segmentation to ensure you tailor content to the right audience. Shopify even makes it easy to track how your newsletters perform, too, which can help with strategy refinement.
8. Collect feedback to tailor offerings and improve experiences
Customer feedback provides valuable insights into your brand experience. You can learn what they love and what they don’t, which means you know what you need to work on. When brands listen to their customers, it demonstrates their commitment to them, which helps your repeat purchase rate immensely.
Feedback collection can be done in a range of ways: surveys, reviews, social media engagement, and direct communication. Each method has its own strengths, but the key to all this is what you do with the information garnered.
One of the easiest ways to collect customer feedback is with post-purchase surveys placed on your thank you page. Thank you page surveys work so well because they're non-intrusive, have a low barrier to conversion and capture data when it's fresh in your customers mind.
Analyzing data and using it to make improvements is crucial. Data should be used to inform all business decision-making. Businesses should prioritize areas where feedback is more likely to have a bigger impact.
Shopify has built-in features like product reviews and surveys that can help close the feedback loop to improve repeat purchase rates.
9. Offer subscription-based models to ensure ongoing engagement
Subscription-based models have advantages in abundance. Like loyalty schemes, they benefit both the customer and the seller. Subscribers receive regular services or products, which means they don’t need to make repeat purchase decisions. Sellers gain from predictable revenue and improved retention.
Shopify has subscription models to enable sellers to access this opportunity. Sellers can configure their frequency, offering, and pricing easily. Examples of successful subscription models include the beauty subscription service Birchbox and the razor service Dollar Shave Club.
10. Continuously improve product quality and user experience
Customers who aren’t happy with the product or service received won’t come back. Even if a customer has a poor experience, how it’s dealt with can swiftly change things around.
Collecting feedback from customers is a first step. The most important part of the whole process is translating that data into actionable insights to make improvements in the quality of your products and the purchasing of them.
A fine example of a brand that continuously improves its product and user experience is Apple. Apple has an iterative approach to product development. Rather than create absolute new products, each new item is simply a refinement of an already excellent item. Apple knows its iPhone is brilliant, and so the brand focuses on making it even better.
Boost Your Repeat Purchase Rate Today!
Shopify sellers take note: your repeat purchase rate matters, and you can improve it. Though this might appear to be a number on a screen, behind this figure is your business lifeblood. This represents your customers’ loyalty and your sustained revenue and success. Leveraging what Shopify has to offer means creating a thriving e-commerce business where customers seek you out for a holistic experience. Your RPR? It shows how committed you are to keeping your customers happy, and it’s the key to being successful in the long term.
Repeat Purchase Rate FAQs
Let's quickly cover some of the most commonly asked questions when it comes to calculating your repeat purchase rate
What is a good repeat purchase rate?
This figure varies depending on your industry, but as a general rule, a rate of 20% and above is considered good for e-commerce businesses. This means that 20% of customers (or more) make at least one more purchase after their first.
What is the average repeat purchase rate?
All industries are different, and there is no exact figure. However, average repeat purchase rates per industry tend to range between 10% and 40%, depending on the product or service offered. Subscription-based services often have higher RPRs for obvious reasons.
How can you see your repeat purchase rate on Shopify?
You’ll need to find out the number of repeat customers you have in a specific time frame and the total number of customers you have. Then, divide the first by the second, multiply the figure by 100, and you have your RPR percentage.