Repeat Purchase Rate

No doubt, in order to grow a business you can not only focus on acquiring new customers. You also need to make sure that you attract follow-up purchases from your existing customers to increase your turnover.

So let's take a look at your Repeat Purchase Rate!

Definitions

Before we move forward with data analysis, let's make sure that we are on the same page with some definitions:

The repeat purchase rates are presented as color-coded bar charts, followed by absolute numbers:

Use Cases

The best customers are the ones you already have! After a customer has placed an order, it is your job to inspire them to place the next one. Therefore, it is important to perform your retargeting campaigns at the right time to increase the chance that they will catch your customer's attention.

Step 1: Understand how many orders it takes to create loyalty

Usually, the biggest challenge is to convert one-time buyers into repeat customers. Benchmarks show that the likelihood of repeat purchases increases with every subsequent purchase - in fact, achieving a second purchase results on average in three additional orders over the customer's lifetime.

So let’s understand at which order number your customers become loyal and make it a habit to buy from your brand again and again. You should aim to develop your customers to that loyalty level.

Check this with the Repeat Purchase Rate report. For each order, this analysis shows the percentage of customers who placed a follow-up order. This report answers important questions such as: How many of your first-time buyers came back for a second purchase? How many of those shopped again for a third time?

Identify the order number at which the repeat purchase rate becomes stable at a high level. Now, it is up to you to incentivize your customers to reach at least that order number.

Step 2: Find the perfect time for your reactivation campaigns

Now we know which order is critical to create loyalty, but when is it overdue? The Time Between Purchases report helps you to understand the regular buying behavior of your customers. The median days between purchases indicate when the customers’ follow-up order is overdue. Only when this time has passed, customers should receive additional inspiration or incentives.

If the median days between the 1st and 2nd order is e.g. 103 days, all customers who placed their first and only order more than 103 days ago are overdue.

Step 3: Segment your overdue customers

To put these insights into action, we need to identify the customers we want to work with based on customer segments.

For this, segment all overdue customers who haven’t yet placed the number of orders required to achieve loyalty. E.g., all overdue customers who have shopped either once, twice, or three times. Taking one-time buyers as an example, the segment conditions are as follows:

Step 4: Create dynamic audiences

To engage with these customers, start by connecting your favorite marketing platform to RetentionX. Thereby, you can push your segments as audiences to those. Unlike traditional customer lists, segments are dynamic, meaning they grow as customers meet the segment conditions, and shrink when they no longer meet them. Use your customer segment to create audiences which target your overdue customers, reaching them at the right time.

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