Turning one-time shoppers into repeat customers – that’s the golden ticket in ecommerce today. After all, repeat customers spend 67% more than new customers. So what’s considered a good repeat customer rate in ecommerce? And how can you benchmark your performance to know if you’re on the right track?
This guide will walk you through everything you need to know. By the end, you’ll have actionable insights to stack the odds in your favor for turning new shoppers into lifelong customers.
What is a Repeat Customer Rate?
“Repeat customer rate” is the percentage of customers who have purchased from your store more than once. It’s a metric that indicates how well you convert first-time buyers into repeat buyers.
The formula is simple:
Repeat Customer Rate = Total Number of Repeat Customers / Total Number of Customers
But why does repeat rate matter so much? Well, loyal customers are hugely profitable for several reasons:
– They convert at higher rates – Repeat customers convert 50% more often because they trust your brand.
– They spend more money – As mentioned, repeat customers spend 67% more per transaction.
– They cost less to convert – It’s estimated to be 5x cheaper to retain a customer than acquire a new one.
– They refer friends – Referrals are your best customers, spending 2x more than average.
– They forgive mistakes – Loyal customers will cut you more slack if problems arise.
So in short, a high repeat rate provides a foundation for long-term success. Let’s look at what good benchmarks are.
Benchmarks for Excellent, Good, and Average Repeat Rates
What constitutes an excellent, good or average repeat customer rate in ecommerce? While there are no definitive standards, we can look at benchmarks from leading retailers:
Excellent Repeat Rates:
– Amazon – Over 85%
– Walmart – Over 80%
– Chewy – Over 80%
– Wayfair – Over 60%
Good Repeat Rates:
– Over 50% is generally considered strong
– Home Depot – 45-50% range
– Best Buy – 45-50% range
Average Repeat Rates in Ecommerce:
– 15-30% is typical for most ecommerce stores
– Under 20% indicates opportunity to improve
As you can see, anything over 50% is admirable. Of course, benchmarks also depend on the type of product you sell. For example, subscription services and grocery delivery tend to enjoy higher repeat rates.
The key is to track your own repeat rate over time and aim for continuous improvement. Let’s talk about how to calculate that magic number.
Calculating Your Repeat Customer Rate
Figuring out your repeat customer percentage takes just a few simple steps:
1. Identify your total number of customers
Pull a customer list from your CRM and tally the total number of individual customers, including both first-time and returning.
2. Identify total number of repeat customers
Filter your list to count how many of those customers have ordered more than once. Alternatively, you can pull a report of their order history to specify “customers with 2+ orders” or more.
3. Plug the numbers into the formula
Repeat Customer Rate = Total Repeat Customers / Total Customers
For example, if you have:
10,000 total customers
4,000 repeat customers
Your repeat rate would be 4,000 / 10,000 = 40%
That’s it! Track this monthly to measure progress. Now let’s get into proven ways to improve it.
6 Strategies to Increase Repeat Customers
Provide 5-Star Service
Service can make or break the post-purchase experience. Train support staff to deliver friendly, empathetic assistance. Empower them to go above and beyond, like following up after issues are resolved.
Nail the Returns Process
Returns are inevitable – but they present an opportunity. Studies show 75% of customers would shop with a retailer again after a seamless returns experience. Make it easy to initiate and track returns.
Offer a Loyalty Program
Loyalty programs increase repeat rate by 30-50%. Offer points, tiered benefits, or discounts for repeat purchases. Send reminder emails when points are expiring.
Master Your Email Marketing
Email generates $42 for every $1 spent. Promote new arrivals, share curated content, and offer exclusive discounts to subscribed customers. Just avoid over-promoting.
Double Down on Quality
Never compromise on product quality – defects result in high returns and destroy trust. Likewise, ship orders professionally and quickly. This shows you value customers’ time.
Wrapping Up
Lifelong customers are the rock of a profitable ecommerce biz. While acquiring new shoppers is tough, getting them to return and spend more demonstrates the success of top ecommerce brands.
Now you’re equipped with actionable tips to turn first-time buyers into your best repeat customers. So get out there, start analyzing your repeat rate, and build experiences your customers won’t forget.
Want to get started with analyzing and optimizing your repeat customer rates? Schedule your audit with us today!
