Why It’s So Important to Gain Repeat Customers, and How to Do It

As an ecommerce brand owner, you spend so much of your time and money to get new customers to land on your website and make their first purchase.

But how many of those one-time customers stay with your brand in the long run? How many of them turn into repeat customers?

A healthy community of repeat customers can make the difference between a short-lived brand and a powerful business that thrives for years to come. Let’s find out how to calculate your repeat customer rate, why it’s so crucial for ecommerce to have repeat customers, and how you can gain them for your store.

But first, let’s answer an important question 👇

What is a repeat customer?

A repeat customer is someone who previously made a purchase from your online store — and who comes back to make more purchases.

Unlike new customers, repeat customers have gained some trust in your brand because they’ve been through the entire buying process.

Someone who comes back to buy again and again likely enjoys your products, but also finds it easy enough to shop and check out your website.

Some repeat customers also leave reviews, although many may buy from you for years without leaving a single review. However, they’re a prime target for you to ask for reviews, since there’s a good chance they like your products if they keep coming back to make more purchases.

What’s the difference between returning customers and repeat customers?

You may have seen the term “returning customers” and “repeat customers” used interchangeably. But there’s an important distinction between the two.

👉 A repeat customer has made at least two or more purchases. They are customers who come back to your store again and again.

👉 A returning customer , on the other hand, hasn’t necessarily made a second purchase. This term describes people who made a purchase once before and who come back to visit your website to consider additional purchases.

While a returning customer isn’t a repeat customer yet, they’re a perfect candidate to become one. Some one-time customers never come back at all, which means that any returning customer is someone you should treat with consideration.

Why are repeat customers better than new customers?

So what’s all the fuss with repeat customers? Isn’t it better to grow your customer base and invest in finding new customers?

Not necessarily. If the majority of your customers are already repeat customers, then you should definitely invest more of your time and budget into expanding your customer base. But for most ecommerce brands, investing in repeat customers is a key component of success — especially if you have thin margins.

That’s because it costs five times more to acquire a new customer than to retain an existing one. Part of this is because you can have an average success rate of 60-70% when you sell to someone who’s purchased from you before. With new customers, this falls to 5-20%.

A small increase of 5% in customer retention can help you grow your profits by as much as 25-95%

Plus, repeat customers spend 300% more money on their purchases than new customers. That’s likely because they now trust your brand and aren’t afraid that making a bigger purchase could mean big disappointment.

Since repeat customers are cheaper to convert and tend to buy more, it just makes good business sense to invest your resources into retaining existing customers and getting them to purchase again.

How to calculate your repeat customer rate

Should you invest your entire marketing budget into retaining existing customers to turn them into repeat customers? If not, how do you decide how much to spend on new customer acquisition and how much to keep for retention?

It all depends on your current repeat customer rate. If your customer base is already made up of repeat customers, there’s a good chance you could be investing more into acquisition. But if your repeat customer rate is too low, you should consider reshifting your priorities.

Alex Schultz, the VP of growth at Facebook, states that getting 20-30% of your customers coming back to make a purchase each month should help you do well.

So aim for at least 20%.

Here’s how you can calculate your repeat customer rate:

First, you need to go into your ecommerce website analytics and find out how many customers have purchased more than once from you. Divide that number by your total number of customers and multiply that number by 100 to get a percentage.

Here’s an example — let’s say I have an online store that’s been live for three months. During that time, I’ve made 90 sales.

67 customers only bought once. The remaining orders were made by repeat customers. 10 of them bought twice, so that accounts for 20 orders. The last three orders are from the same person.

This means I have 11 repeat customers and 67 unique customers, for a total of 78 customers.

Now I need to calculate this equation:

11 ÷ 78 = 0.141

0.141 x 100 = 14%

Now I know that my online store has a repeat customer rate of 14%. Knowing what we’ve just discussed, I’d know I need to invest in some retention strategies to get that number up.

How to encourage your customers to come back and make repeat purchases

If you find yourself with little to no repeat customers, what can you do? Luckily, there are several customer retention strategies you can implement to encourage those customers to come back and buy again and again.

1. Implement a post-purchase email sequence

A post-purchase email sequence is a series of automated emails that get dripped out to your customers after they’ve made a purchase. They’re a crucial component of the relationship you build with all customers, but especially the new ones.

Many brands use post-purchase emails for transactional purposes, such as shipping confirmation or receipts. But you can do so much more than that.

First, you can give your customers ideas for how they can use their newly purchased products when they arrive at their door, as Harry’s does:

You can also entertain them or provide some information about your brand’s mission. If you do the latter, make sure you do it in a way that makes the customer feel included. The emails shouldn’t be about your brand so much as they should be about the customer.

All of these actions can help you build a relationship to encourage repeat customers. But you can also use post-purchase email sequences to upsell or cross-sell other items on your website.

Cross-selling during a post-purchase email sequence works well because you can curate the content based on what your customer purchased. For example, Epic entices parents to purchase more books by providing examples of other books a child will love:

You can take advantage of the fact that these customers are currently engaged with your brand to keep them engaged and buying!

2. Invest in customer service

Did you know that 33% of customers will consider buying from another business instead of yours if they experience a single instance of poor customer service? Plus, 60% of customers would buy from someone else after two or three bad experiences.

This data shows that the majority of customers won’t buy from you again if your customer service stinks.

69% of people say they’ll spend more money with a company that has good customer service.

And if your customer service stands out — whether it’s good or bad — people will find out. Nine out of 10 Americans will tell other people about the service experiences they’ve had with various brands.

So what do your customers expect from you? 40% of customers wish brands could take care of their needs more quickly, while 18% wish brands could train their representatives to make a personal connection with them.

But what YOUR customers want may vary. And there’s no better way to find out than to ask.

Consider creating a customer satisfaction survey that you can send to your entire email list or show as a popup on your website using a zero-code app like Getsitecontrol: