If you’re running an online business, then you know that customer satisfaction is key to your success. In fact, according to a study by the White House Office of Consumer Affairs, American businesses lose around $60 billion every year due to dissatisfied customers. So how can you increase the percentage of satisfied transactions and keep more of your hard-earned money? Here are tips that will help.
What Is a Repeat Customer Rate?
In business, the repeat customer rate is a measure of how often customers return to make additional purchases. This can also be called your repeat customer rate, re-order rate, or even customer retention rate.
This metric is important because it can give insights into customer satisfaction levels and overall brand loyalty. A high repeat customer rate indicates that customers are generally happy with their purchases and are likely to continue doing business with the company in the future.
Conversely, a low repeat customer rate may indicate that there are issues with the product or service that need to be addressed. Additionally, the repeat customer rate can be used to identify which products or services are most popular with customers and which ones may be at risk of being discontinued. Ultimately, the repeat customer rate is a valuable metric for assessing the health of a business and its ability to retain customers over time.
Why Is Repeat Customer Rate Important?
Any business owner knows that acquiring new customers is important, but what is often overlooked is the importance of repeat customers. Not only does repeat customer rate (RCR) provide a steady stream of revenue, but it also indicates that a customer is happy with your product or service.
In fact, studies have shown that it is up to 7 times more expensive to acquire a new customer than it is to retain an existing one. Furthermore, loyal customers are also more likely to refer your business to their friends and family.
According to Bain & Company, a 5% increase in retention correlates with at least a 25% increase in profit and that after 10 purchases, shoppers refer as many as 50% more people than one-time buyers.
- Repeat customers are more likely to be loyal customers, which can lead to increased sales and profitability for e-commerce companies.
- Repeat customers are a source of free marketing, as they are more likely to recommend a company to their friends and family members.
- Repeat customers are more likely to forgive mistakes or problems with an order, which can lead to fewer customer service interactions and a reduced need for customer support staff.
- Repeat customers are more likely to buy additional products or services from an e-commerce company, increasing the company’s revenue potential.
- Repeat customers provide valuable feedback that can help e-commerce companies improve their products and services, increasing customer satisfaction and loyalty in the process.
For all these reasons, it is clear that RCR should be a key metric for any business owner. By focusing on retaining existing customers, you can not only boost your bottom line but also encourage organic growth through word-of-mouth marketing.
How To Calculate Repeat Customer Rate?
There are a few different ways to calculate your repeat customer rate. Still, the most common is simply to take the number of repeat customers in a given period and divide it by the total number of customers during that period.
For example, let’s say you have 100 total customers in January, 60 of whom are repeat customers. Your repeat customer rate would be 60%.
- Step 1: count the number of repeat customers (i.e. > one purchase)
- Step 2: count the total number of customers
- Step 3: divide the number of repeat customers by the total number of customers
- Step 4: multiply by 100 to convert to percentage form
The formula for calculating the repeat purchase rate is:
Repeat Purchase Rate = Number of Repeat Purchase Customers ÷ Total Number of Customers
What Is A Good Repeat Customer Rate?
There is no magic number for what constitutes a good repeat customer rate, as it will vary depending on the industry and the type of product or service being sold. However, businesses generally want to have a high repeat customer rate, as it can be an indicator of customer satisfaction and loyalty.
Stores that sell consumable products should have a higher percentage of repeat customers than stores with large and expensive items. But all retailers can use email to drive Repeat Purchase Rate, as long they know what type their product line falls into – naturally, those who focus on food & beverages will see more frequent purchases than if you were selling computers or furniture!
A high repeat customer rate can also lead to increased profits, as repeat customers tend to spend more money than new customers. In general, a repeat customer rate of 20-40% is considered good, while a rate over 50% is considered excellent. Ultimately, the goal is to create satisfied customers who will continue doing business with the company in the future.
It was founded that an average of 28% for eCommerce brands and we discovered tea shops have an even lower number at 20%.
Alex Schultz, VP of Growth at Facebook who says, “If you can get 20-30% of customers coming back every month and making a purchase from your store, you should do pretty well”.
A high repeat customer rate is a good indication that your customers are happy with your products or services and are likely to continue doing business with you. It’s also a good sign that you’re attracting new customers.
5 Ways To Measure Your Repeat Customer Rate
Here are the five ways to measure repeat customer rates:
Survey your customers
The best way to find out how often your customers come back is to simply ask them. You can do this through customer surveys or by asking customers directly.
Look at your sales data
Another way to measure repeat customer rates is to look at your sales data. This can give you a good idea of how often customers are buying from you again.
Look at customer loyalty programs
If you have a loyalty program, this can be a good way to measure repeat customer rates. This is because these programs typically track how often customers come back and make purchases.
Use customer retention rate
Customer retention rate is another metric that can be used to measure repeat customer rates. This metric looks at the percentage of customers that continue to do business with you over time.
Use Net Promoter Score
Net Promoter Score is a metric that measures customer satisfaction. This can be a good way to measure repeat customer rates because it looks at how likely customers are to recommend you to others.
14 Tips To Increase Repeat Customer Rate
Here are some tested and good tips for you to increase your repeat customer rate:
Email marketing
Email marketing is a great way to keep in touch with customers and remind them about your store. You can send emails about new products, sales, and other news.
Loyalty programs
Loyalty programs are a great way to reward customers for their loyalty. They can earn points for every purchase that can be redeemed for discounts or other rewards.
Retargeting ads
Retargeting ads are ads that are shown to customers who have visited your store but didn’t make a purchase. They are designed to remind them about your store and encourage them to make a purchase.
Social media marketing
Social media marketing is a great way to connect with customers and promote your store on social media platforms. You can post updates about new products, sales, and other news.
Upselling and cross-selling
Upselling and cross-selling are techniques that are used to encourage customers to buy more products or services. Upselling is offering a customer a product that is slightly more expensive than the one they are considering, while cross-selling is recommending related products that the customer might be interested in.
Keep Your Customers Happy
Make sure your customers are always happy with your service or product. If they’re not, they won’t come back.
Provide Excellent Customer Service
Your customers should always feel like they are your top priority. Provide them with the best possible customer service and they will be more likely to come back.
Offer Discounts And Coupons
Discounts and coupons are a great way to keep your customers coming back. Everyone loves a good deal, so offer them often!
Personalize Your Service Or Product
Make sure your customers feel like they are getting a personalized experience. This could include customizing your product or service to their specific needs or adding a personal touch to your interactions with them.
Send Thank You Notes
Sending a thank you note after a purchase is a great way to make your customers feel appreciated. They’ll know that you value their business and they’ll be more likely to come back.
Keep In Touch
Staying in touch with your customers is a great way to keep them coming back. Send them periodic emails or letters updating them on your product or service.
Make It Easy To Purchase From You
Make sure your customers can easily purchase your product or service. If it’s difficult, they’re less likely to come back.
Be Consistent
Make sure your product or service is always consistent. If it’s not, your customers will notice and they’ll be less likely to come back.
Always Exceed Expectations
If you want your customers to keep coming back, you need to always exceed their expectations. Go above and beyond to make sure they’re happy and they’ll be sure to come back.
Following these tips will help you increase your repeat customer rate, making your business more successful in the long run. So don’t wait – start implementing them today!
The Final Verdict
Increasing your repeat customer rate is a matter of understanding what customers want and providing it to them in a way that makes them comfortable. It’s also about offering an excellent customer experience, which starts with great customer service and continues through the entire purchase process. Have you tried any of these methods for increasing your repeat customer rate? Let us know how they worked for you!