Acquiring new customers today is not just challenging—it’s costly. Over the past five years, the cost of customer acquisition has increased by more than 50%, making it more expensive than ever to attract new customers.
Yet, despite this rising cost, many businesses continue to prioritize finding new customers over nurturing existing ones. However, retaining customers is often far more valuable.
Studies show that repeat customers are significantly more likely to buy again compared to first-time buyers. They already trust your brand, are familiar with your products, and require less convincing—making them a crucial driver of long-term business growth.
Moreover, the chance of selling to a repeat customer is 60%-70%, while for a new customer, it’s only 5%-20%. Plus, repeat customers spend more, refer friends, and help your business grow over time.
So, how do you track and improve customer loyalty?
That’s where Repeat Customer Rate (RCR) comes in.
This metric tells you how many of your customers return for another purchase. A higher RCR means stronger loyalty, lower marketing costs, and more revenue.
In this blog, we’ll explain what Repeat Customer Rate is, how to calculate it, and simple ways to boost it—so you can grow your business without always chasing new customers.
If you can get 20-30% of customers coming back every month and making a purchase from your store, you should do pretty well.
Table of Contents
- How to Identify a Repeat Customer?
- Why Do You Need to Calculate Repeat Customer Rate?
- What is Repeat Customer Rate (RCR)?
- Understanding the CLTV : CAC Ratio
- How to Improve Repeat Purchase Rate?
- What Is a Good Repeat Customer Rate?
- Measuring Customer Repeat Rate with a Cohort View
- Understanding Churn Rate vs. Repeat Rate
- Industry-Specific Differences in Repeat Rates
- Conclusion
1. How to Identify a Repeat Customer?
A repeat customer is someone who has made more than one purchase from a website, app or store. These customers are valuable because they are more likely to buy again and contribute to long-term growth.
To track repeat customers, brands can use tools like:
- Customer Data Platforms (CDPs) – Most eCommerce platforms have reports that show how many buyers are new vs. returning.
- Google Analytics – Go to Audience Insights > Behavior > New vs. Returning Users to see how many repeat buyers you have and how much revenue they generate.
By monitoring these insights, brands can focus on retention strategies to turn more first-time buyers into loyal customers.
2. Why Do You Need to Calculate Repeat Customer Rate?
Repeat customers are the backbone of a profitable business. They don’t just buy again—they help your business grow in multiple ways. Here’s why tracking Repeat Customer Rate (RCR) is essential:
- Higher Revenue & Profitability: Repeat customers tend to spend more per purchase and have a higher lifetime value than new buyers. This directly boosts your business’s profitability without needing constant new customer acquisitions.
- Lower Marketing Costs: It’s expensive to bring in new customers. By increasing your repeat customer base, you can reduce marketing costs and get more value from those who already know and trust your brand.
- Valuable Customer Insights: Loyal customers often provide honest feedback, helping you refine your products and services. Their insights can lead to better offerings and improved customer experience.
- Word-of-Mouth Marketing: Satisfied repeat customers are your best brand ambassadors. They are more likely to refer friends and family, helping you attract new customers organically.
3. What is Repeat Customer Rate (RCR)?
Repeat Customer Rate (RCR) is a key metric that tracks how often customers return to make additional purchases. It helps businesses understand customer loyalty and ongoing engagement.
Read More – Points Vs. Cashback: What Drives Customer Loyalty?
A high RCR means customers are consistently coming back, increasing their Lifetime Value (LTV) and strengthening long-term revenue. This is crucial because repeat rate directly impacts LTV, showing how much value a customer provides over their entire relationship with a brand.
Read more – Metric of the Week: Customer Lifetime Value (CLV)
On the other hand, a low RCR suggests that a business may be relying too much on new customers, highlighting potential gaps in customer retention strategies.
But RCR isn’t just about whether a customer makes a second purchase—it reflects the overall customer experience across multiple transactions. A strong RCR indicates that customers find value in your brand, while a weak one signals the need for better engagement and retention efforts.
3.1 How to Calculate Repeat Customer Rate (RCR)?
Repeat Customer Rate (RCR) helps businesses understand how many customers return for additional purchases. It’s a simple yet powerful metric to measure customer loyalty and retention.
Formula for RCR:
Repeat Customer Rate = (Total Repeat Customers ÷ Total Paying Customers) × 100
Example Calculation:
For example, a fashion eCommerce brand wants to track its customer loyalty.
- In February 2025, the brand had 1,500 total customers who placed an order.
- Out of these, 750 customers made another purchase within the same month.
The Repeat Customer Rate (RCR) would be:
(750 ÷ 1,500) × 100 = 50%
This means 50% of customers returned to buy again, indicating strong customer loyalty driven by good product quality, engagement strategies, or post-purchase experience.
4. Understanding the CLTV:CAC Ratio
The Customer Lifetime Value (CLTV) to Customer Acquisition Cost (CAC) ratio is a key metric that helps businesses assess the profitability of acquiring new customers. It shows how much revenue a customer is expected to generate over their entire relationship with the business compared to the cost of acquiring them.
- Customer Lifetime Value (CLTV): The total revenue a customer generates for a business minus the costs of serving them.
- Customer Acquisition Cost (CAC): The total expense incurred to acquire a new customer, including marketing, sales, and onboarding costs.
Formula:
CLTV : CAC = Customer Lifetime Value / Customer Acquisition Cost
Example Calculation:
- Suppose a business determines that the CLTV is $450 and the CAC is $125.
- The ratio is calculated as:
450 ÷ 125 = 3.6
This means that for every $1 spent on acquiring a customer, the business earns $3.60 in return.
Read more – Metric of the Week: Customer Lifetime Value (CLV)
Why Is This Ratio Important?
- A higher CLTV : CAC ratio (typically above 3:1) suggests that a business is acquiring customers profitably.
- A low ratio (close to or below 1:1) indicates that acquisition costs may be too high, and the business might struggle with profitability.
- Helps businesses determine if they should invest more in customer acquisition or focus on improving customer retention.
5. How to Improve Repeat Purchase Rate?
Increasing your repeat purchase rate (RPR) requires a strategic approach to segmentation and timing. Here’s how you can optimize your strategy to encourage more customers to buy again.
5.1. Identify the Ideal Time Window: Analyze customer data to find out when first-time buyers typically make their second purchase. This window varies by industry, product type, and customer behavior. Understanding this pattern helps you time your engagement efforts effectively.
5.2. Segment Customers Based on Buying Patterns: Once you identify the ideal repeat purchase window, group customers accordingly. This segmentation allows you to create marketing efforts for different customer behaviors, ensuring more personalized and relevant outreach.
5.3. Engage with Targeted Nudges: Use well-timed messages, personalized offers, and reminders to encourage repeat purchases. Discounts, exclusive deals, or loyalty incentives can be powerful motivators when delivered at the right moment.
Read more – Points Vs. Cashback: What Drives Customer Loyalty?
5.4. Implement Valuable Incentives: To further boost repeat purchases, offer incentives that add value to the customer experience:
- Personalized Offers – Send promotions based on individual customer preferences and purchase history.
- Tiered Discounts – Offer tiered discounts or incentives to reward frequent buyers.
- Exclusive Loyalty Programs – Provide special perks and benefits for loyal customers to enhance their experience and retention.
By combining data-driven insights with strategic engagement, you can significantly improve your repeat purchase rate and build long-term customer relationships.
6. What Is a Good Repeat Customer Rate?
There isn’t a single number that defines a good Repeat Customer Rate (RCR) because it varies based on industry, product type, and business model. But here’s a general guideline:
- 20-30% repeat customers is the average for most eCommerce businesses.
- 30-40% is a good repeat rate, showing strong customer loyalty.
- Above 50% means you’re in an excellent position and can focus on scaling growth further.
Studies show that retaining just 5% more customers can significantly boost profits. Even a small increase in retention can make a big difference in revenue over time.
On the other hand, if your repeat customer rate is below 25%, you might be missing out on potential revenue and need to focus on strategies that encourage repeat purchases.
One important factor to consider is the timeframe you use to measure RCR.
- A monthly RCR helps track short-term performance.
- A yearly RCR gives a bigger picture of customer retention trends.
So, instead of chasing new customers, take a closer look at how many are coming back—because that’s where long-term growth truly happens!
7. Measuring Customer Repeat Rate with a Cohort View
A single repeat rate figure doesn’t always give the full picture. Instead, tracking repeat purchases across different time periods helps uncover long-term retention trends.
- 1-month repeat rate → Measures how many customers return within the first month. This is useful for businesses with frequent purchases like groceries or personal care.
- 3-month repeat rate → Shows mid-term retention and is ideal for products like fashion, where customers might buy seasonally.
- 9-month & 12-month repeat rates → Help track long-term customer loyalty, particularly for categories like electronics, luxury, or furniture, where purchases happen less frequently.
By analyzing these cohorts, businesses can identify patterns, assess the impact of retention efforts, and predict future revenue more accurately.
Read more: Cohort Vs. Segment: Are Brands Using These Terms Correctly?
8. Understanding Churn Rate vs. Repeat Rate
Repeat Rate and Churn Rate are two sides of the same coin—one measures returning customers, while the other tracks those who leave.
Can Also Be Calculated By:
Churn Rate = 1−Repeat Customer Rate
For example, if 40% of customers buy again, your churn rate is 60%, meaning 60% of customers never return.
Why does this matter?
- A high churn rate signals weak customer loyalty and potential issues with product, pricing, or customer experience.
- Lower churn means strong retention, indicating satisfied customers who are likely to buy again.
9. Industry-Specific Differences in Repeat Rates
Different industries have different purchase cycles, so repeat rate expectations should align with the nature of the product:
- Quick Commerce (Zepto, Blinkit, etc.) – Weekly repeat rate: Customers buy groceries or essentials frequently, often multiple times a week. Retention strategies focus on convenience, fast delivery, and promotions.
- Fashion & Electronics – Monthly repeat rate: Customers might purchase clothes, gadgets, or accessories every few months. Brands use personalization, seasonal offers, and exclusive launches to drive repeat purchases.
- Luxury & Big-Ticket Items – Annual repeat rate: High-end fashion, furniture, or premium electronics have longer buying cycles. Retention depends on exceptional service, exclusive memberships, and post-purchase engagement.
By understanding these industry-specific benchmarks, businesses can set realistic retention goals and optimize their marketing strategies accordingly.
Acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.
10. Conclusion
Repeat Customer Rate (RCR) isn’t just a number, it’s a key indicator of business success. A strong RCR means lower acquisition costs, higher profits, and loyal customers who keep coming back.
By focusing on retention strategies like loyalty programs, personalized offers, and excellent post-purchase experiences, businesses can boost their repeat purchase rate and drive sustainable growth.
Instead of constantly chasing new customers, invest in the ones you already have. Improve their experience, reward their loyalty, and watch your business thrive!
If you’d like to discuss how we can help enhance your customer repeat rate and optimize your strategies, we’d be happy to set up a consultation call. Feel free to reach out to us at alibha@daiom.in
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