Measure repeat customer loyalty by combining two metrics

There isn't one metric that perfectly identifies your repeat customer performance.

Combining two metrics though and you can get really close.

Repeat Purchase Rate and Customer Purchase Latency (latency) when combined can describe much of your success with repeat customers.

Repeat Purchase Rate shows the number of customers who re-ordered in a given time-frame. In other words, what percentage of customers decided to come back and order again?

Latency refers to how long it was since the last order. A latency of 30 days means that on average, your customers are placing another order 30 days later.

Repeat Purchase Rate shows how often customers come back, latency shows how long it takes. When combined you can now predict how many customers will come back in a time-frame.

There's your repeat customer performance right there.

Ideally you want Repeat Purchase Rate to be high (more customers coming back) and Latency to be low (less time in-between orders). Start optimizing and running tests to try to maximize those two and your store's customer base will improve.

Both of these can be emailed to you every week or every month as part of Repeat Customer Insights. This will help you stay on-track with your improvements.

Eric Davis

Segment your customers automatically with RFM

Segmenting your customers has always been touted as a powerful marketing tool but many stores avoid it because it can be time-consuming.
Repeat Customer Insights will automatically segment your entire customer base for you based on the valuable data Shopify has already collected for you. Ranging from 5 to 30 to over 125+ different segments using RFM and other models, you can pick how much power you want to harness.

Learn more

Topics: Customer loyalty Repeat customers Customer analysis Repeat purchase rate Customer purchase latency

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