The compounding advantage of Repeat Purchase Rate

Optimizing your customer analytics for repeat customers can have some surprising results.

When you're acquiring new customers, a 10% boost in traffic should add around 10% to your revenue. It's linear.

Improve your repeat customer metrics like the Repeat Purchase Rate by 10% and you'll often see much more than a 10% boost to your bottom-line. It'll compound, all because each customer who buys again is likely to buy again and again and again...

  • 10% more orders on the 1st -> 2nd orders
  • 10% more orders on the 2nd -> 3rd orders (including the additional orders from the 1st -> 2nd)
  • 10% more orders on the 3rd -> 4th orders (including the additional orders from the 1st -> 2nd and the 2nd -> 3rd)
  • and so on.

A 10% overall improvement in your Repeat Purchase Rate can add 20% or 50% or even doubling your revenue. It all depends on how well you're performing now.

If your Repeat Purchase Rate is low, under 25%, then you're not getting this compounding benefit. I'd recommend you read my advice on the topic and use Repeat Customer Insights to measure your performance.

Eric Davis

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Measure the different levels of customer loyalty with Repeat Customer Insights. It uses various models to segment and grade your customers based on their behavior.

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Topics: Repeat purchase rate Repeat customers Customer retention

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