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:
The people who answer will let you know exactly what you could improve. By doing this, you won’t waste your time and money improving in places that your customers don’t care about.
If you want more people to take your survey, you can offer a limited number of gift cards or other survey incentives, just like Click and Grow did here:
Another way you can improve your customer service is to add a chatting tool to your website. Chatting tools are a great way to connect customers with your reps, but they can also be used to provide quick links to other useful information.
Let’s look at what pops up when we click on CocoVillage’s chatbox:
Customers can start a live chat to get live support. But they can also access the FAQs or navigate through product categories. This makes navigation easier, especially on mobile!
💡If you don’t want to use a chatbox, you can add a WhatsApp button to your website and let customers chat with you through the app.
3. Email customers regularly
You don’t have to limit your ecommerce email marketing to just automations and drip sequences. In fact, you should regularly email your list.
Sales and promotions are good reasons to send a newsletter, but since most businesses run promos only once in a while, here are a few more ideas:
- Curated content from your social media channels or customers using your products
- Product roundups
- Behind the scenes content
- Resource roundups (that are relevant to your target audience)
- Quick tutorials or other helpful information
- Teaser content for new products
It helps to segment your audience so that you can send targeted newsletters and promotions. You can segment your audience based on:
- Purchasing history
- Source of opt-in
- Behavior (single-time buyers, repeat buyers, people who abandon their carts)
- Website activity
- Level of responsiveness on your list (have they opened an email in the past three months, for example?)
When you segment your audience, you can send more relevant content that’s more likely to engage them — and an engaged subscriber is more likely to buy. For instance, Knix sent me this early access invitation about their new swimwear collection, likely because I purchased swimwear from them before:
They know that if they want me to continue as a repeat customer, they need to keep me — and their other subscribers — engaged. That’s why they send frequent emails.
Something else you can do that Knix does is add personalization in newsletters — and I don’t just mean using a subscriber’s first name! You can add other merge fields to personalize an email.
For instance, if you have a rewards program, you can add a reminder for your subscribers to let them know how many points they have. They’ll remember why they’re better off purchasing from you instead of going to a new brand!
4. Send a re-engagement email sequence
If you segment your audience based on responsiveness, you’ll know when some of your subscribers become cold.
Cold subscribers are people who haven’t opened your emails in a while. Some people consider subscribers to be cold after six months of inactivity while others see three months as long enough to become “cold”.
Think of all the one-time buyers who may be on your list because they purchased a while ago and simply forgot about your brand. It’s time to re-engage them!
You can re-engage cold subscribers, but you can also re-engage active subscribers who haven’t bought for a specific amount of time.
Most email marketing platforms allow you to automate this. You can create your re-engagement sequence once, then let your email software do its job.
In this following email, Allea reminds previous buyers who haven’t purchased in a while about their brand’s goal while asking about their skincare routine.
The more information you have about your one-time customers, the more relevant you can make your re-engagement sequences. For instance, you can create a different sequence for each product category so that your emails give more tailored suggestions.
5. Use retargeting ads
What if your one-time buyers aren’t opening their emails? Luckily, retargeting ads are a powerful way to re-engage those buyers.
Facebook, Instagram, YouTube, TikTok, Google, and so many other platforms provide ecommerce businesses with ad management tools. But instead of spending the bulk of your ad budget on new customer acquisition, retarget users who’ve bought from you before.
Make sure you use retargeting ads in addition to email marketing. Ads on their own are powerful, but they’re not the most cost-effective way to get repeat customers.
Remember the re-engagement email from Knix? They used retargeting for the same campaign:
3rd-party ads displayed on websites can work, too:
But if you have a limited ad budget, don’t spread yourself out too thin by using all the platforms. Start with one and expand from there. For instance, many ecommerce businesses have seen success on TikTok.
6. Start a loyalty program
If your customers can get points or other loyalty incentives for shopping on your website, they’ll have additional encouragement to do their shopping with your brand instead of all over the place.
Let’s say a customer has $1000 to spend on clothing for the year. They could purchase from several brands and earn a few loyalty points from each brand. But if they bought from a single source, they could accumulate more points and get rewards much faster.
There are so many ways to create a loyalty program, but one of the most popular options is to offer free products in exchange for points accumulated during purchases. David’s Tea’s Frequent Steeper program earns customers one point for every dollar spent in-store — and 100 points get them a free 50g bag of tea!
They also have the VIP tier for Super Steepers. This program is eligible for customers who spend $400 or more in 12 months.
Programs like the Super Steeper program make it so much more enticing for customers to become frequent repeat customers. If you don’t have a loyalty program yet in your own business, try it out.
7. Add recommendations in your transaction emails and pages
Finally, you can turn your transactional emails and pages into opportunities to make repeat sales.
We’ve already covered how you can use post-purchase emails to add product recommendations. But you can add curated product recommendations on transactional pages, too. A transactional page can include purchase confirmations or shipping updates.
When customers open the shipping status link in a Lovevery email, they’ll see relevant products on the same page.
While those customers may not make a purchase right away, this type of curated list can help with brand awareness, too.
Gain lifetime customers who become fans of your brand
Getting a bunch of new customers is great — but turning those new customers into raving fans who buy from you again and again is even better.
Many of the tactics in these articles suggest that you have a list of your customers’ emails and use it to reconnect with them and encourage one-time buyers to come back. One tool that can help you build an email list is Getsitecontrol. Use it to display a pop-up form before or after checkout and capture your customer’s emails.
Learn more about ways to convert ecommerce customers into email subscribers and give Getsitecontrol a try!
Charlene Boutin is a freelance content writer & email marketing strategist for hire specializing in helping Ecommerce and SaaS businesses increase conversions by growing authentic relationships with their audience. She loves helping business owners tell their unique stories to capture the hearts of more customers.
You're reading Getsitecontrol blog where marketing experts share proven tactics to grow your online business. This article is a part of Customer engagement section.Subscribe to our newsletter →
You're reading Getsitecontrol blog where marketing experts share proven tactics to grow your online business. This article is a part of Customer engagement section.