What is a Repeat Purchase Rate?
The percentage of customers who make more than one purchase.
How Repeat Purchase Rate Works
Repeat purchase rate measures the percentage of customers who return to make additional purchases after their first order. It's a key indicator of customer satisfaction, product-market fit, and the foundation for calculating customer lifetime value.
Repeat purchase rate is calculated by dividing customers with more than one purchase by total customers. E-commerce benchmarks vary by category: consumables might see 30-40% repeat rates, while one-time purchases like mattresses might be under 10%. Improving repeat rate requires: excellent product experience, post-purchase engagement (email nurture, loyalty programs), subscription options, cross-sell recommendations, and addressing reasons for not returning. Even small repeat rate improvements compound significantly in CLV calculations.
Frequently Asked Questions
What is a Repeat Purchase Rate?
The percentage of customers who make more than one purchase.
Repeat purchase rate measures the percentage of customers who return to make additional purchases after their first order. It's a key indicator of customer satisfaction, product-market fit, and the foundation for calculating customer lifetime value.
Why is Repeat Purchase Rate important?
Repeat purchase rate reveals whether your business can build sustainable customer relationships or is stuck on the acquisition treadmill. High repeat rates indicate product satisfaction and enable profitable growth—selling to existing customers costs 5-25x less than acquiring new ones. Low repeat rates signal product or experience problems that no amount of acquisition spending can fix.
How do you calculate Repeat Purchase Rate?
Repeat Purchase Rate = (Customers with 2+ Orders ÷ Total Customers) × 100. For example, if you have 10,000 customers and 2,500 have made 2+ purchases, repeat purchase rate is (2,500 ÷ 10,000) × 100 = 25%.