Comparing Repeat Purchase Rate and Repeat Sales Percentage

Combining and comparing metrics can shed additional light on how your store works in a way that’s impossible to get from a single metric.

One of my favorite combinations is to compare your Repeat Purchase Rate with your Repeat Sales Percentage.

They are both percentages and similar but how they measure your orders differ:

  • Repeat Purchase Rate – measures the number of orders
  • Repeat Sales Percentage – measures your order amounts

By comparing them, your store falls into one of three types.

First, if your Repeat Sales Percentage is higher than the Repeat Purchase Rate then your repeat customers are spending more on their reorders than on their first. This is usually what you want to happen with your store as it shows improving customer loyalty.

Second, if your Repeat Sales Percentage is lower than the Repeat Purchase Rate then your repeat customers are spending less on their reorders than on their first. This could be a problem unless your product mix tends to be a major purchase followed by smaller or replenishment purchases.

You can get into this situation if you’re boosting and incentivising the size of the first order.

Sometimes this is also a sign that you’re discounting too soon to repeat customers and training them to only buy at a discount. There is where I’d recommend comparing your Customer Purchase Latency against your discounting policies.

Third, if they are the same then your store’s sales to repeat customers is linear and staying constant with each repeat purchase. This is okay but you might try to incentive customers to place larger repeat or first orders. It’s rare to see a store that stays here unless they only sell a single product at a single price.

That’s the power from comparing just these two metrics. You can tease out even more ideas if you run them on specific segments like only customers who have ordered 4+ times.

If you haven’t installed Repeat Customer Insights yet, it can collect all of this data for you automatically. There’s a 14-day trial too.

Eric Davis

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