Repeat purchase rate

Repeat purchase rate definition

The repeat purchase rate measures the percentage of customers who make more than one purchase from a business within a given time period. It is a metric that is often used by businesses to assess the effectiveness of their customer retention and loyalty strategies.

Calculation of the repeat purchase rate

The repeat purchase rate is calculated by dividing the number of customers who make more than one purchase by the total number of unique customers during the same period, and multiplying the result by 100 to get a percentage. For example, if a business has 1,000 unique customers in a month, and 300 of them make a repeat purchase during that same month, the repeat purchase rate would be 30% (i.e., 300/1,000 x 100).

A high repeat purchase rate indicates that a business has successfully retained its customers and generated repeat business, which can lead to increased revenue and profitability. On the other hand, a low repeat purchase rate may indicate that a business needs to improve its customer experience, product quality, or marketing efforts to encourage more repeat purchases.

Repeat purchase rate usage

This rate is often used to compare the performance of different products, customer segments, or marketing campaigns. By identifying which products or campaigns have higher repeat purchase rates, businesses can focus their efforts on strategies that are most effective in driving customer loyalty and retention.