Repeat Customers: What They Are, Why They Are Important & How to Encourage Them

Aws Alnabulsi
August 31, 2023
|
10 mins
Repeat Customers

Repeat customers are customers who make multiple purchases from a business. They are an important part of any ecommerce business as they not only generate revenue, but also act as brand advocates when sharing their positive experiences with others.

These existing customers are more likely to spend more money and make more frequent purchases than new customers.

Encouraging repeat customers is vital for the success and growth of an ecommerce business. One way to achieve this is through providing excellent customer service and personalized experiences that make customers feel valued and appreciated.

Loyalty programs, promotions, and targeted email campaigns can also incentivize repeat purchases and keep customers engaged with the brand.

Coretava helps ecommerce stores in their efforts to encourage repeat customers.

Through its customer engagement and retention tools, Coretava helps businesses build strong relationships with their customers and increase their lifetime value.

Coretava provides personalized recommendations, targeted ecommerce marketing campaigns, and loyalty programs that drive customer loyalty and retention.

Table of Contents

  • What Is a Repeat Customer?
  • Why Are Repeat Customers Important?: 6 Repeat Customer Statistics
  • How to Measure Repeat Customers: 6 Metrics
  • How to Get Repeat Customers: 7 Strategies
  • How to Increase Repeat Customers With the Coretava Tools
  • Encouraging Repeat Customers for Your Ecommerce Business

What Is a Repeat Customer?

What Is a Repeat Customer?

One repeat customer definition is that they are customers who make a purchase from a business on multiple occasions, for the same or different products. Another word for repeat customers is "loyal customers."

These customers are loyal to the brand and have a higher retention rate, which is why they are an essential part of any ecommerce business's customer base.

The repeat customer meaning is significant to ecommerce businesses as they represent a valuable source of continuous revenue and long-term growth.

Firstly, they tend to spend more money and make more frequent purchases than new customers.This means that if you have a high number of repeat customers, they generate a higher revenue per customer and contribute to the business's bottom line.

Secondly, they are more likely to recommend the business to others, which can help attract new customers through positive word of mouth.

Moreover, repeat customers are easier and cheaper to retain than acquiring new customers. According to OutboudEngine, it's five times more costly to attract a new customer than to retain an existing one.

Therefore, ecommerce businesses should focus on building strong relationships with their repeat customers through excellent customer service, personalized experiences, and targeted marketing campaigns.

What Is the Difference Between a Recurring Customer and a Repeat Customer?

While "recurring customer" and "repeat customer" are often used interchangeably, there is a subtle difference between the two.

A repeat customer is a customer who has made multiple purchases from a business, regardless of the time interval between each purchase.

A recurring customer is a customer who makes purchases from a business on a regular basis, typically at a fixed time interval.

For example, a customer who buys from the same online store is considered a repeat customer. However, a customer who subscribes to a biannual delivery, like a subscription to a product, is considered a recurring customer.

Why Repeat Customers Are Important: 6 Repeat Customer Statistics

Repeat Customer Benefits

Any business that operates an ecommerce website must prioritize attracting and retaining repeat customers to achieve sustainable success and growth. They not only generate revenue, but also act as brand ambassadors by sharing their positive experiences with others.

The most important benefits of having repeat customers include:

1. Increased Revenue

As quoted by Business.com, repeat customers spend 67% more on average than new customers. This means that retaining customers is more cost-effective than acquiring new ones and can lead to a significant increase in revenue.

2. Higher Profit Margins

Repeat customers also have higher profit margins than new customers, as they are more likely to make larger purchases and require less marketing spend.

For most industries, a consumer's average order value will increase the longer they buy with your brand. After six months of doing business with a company, beauty and cosmetics customers spend 30% more each order, and after three years, they spend 45% more per order, according to Smile.io.

3. Positive Word of Mouth Marketing

Repeat customers are more likely to refer friends and family to a business than new customers.

More than any other sort of marketing communications, 88% of customers indicated they trusted recommendations from people they know, based on Buyapowa figures.

4. Better Customer Lifetime Value

For repeat consumers, the customer lifetime value (CLTV) is higher. With making more repeat purchases or accepting upsells, a devoted client will always spend more money than a brand-new one. Why? There are many variables at work here, but one is trust.

Customers are less hesitant to make purchases from you as you gain more loyal followings. Because of this, promoting new products to existing customers requires less work than promoting them to new ones.

5. Improved Brand Loyalty

Repeat customers are more loyal to a brand than new customers.

It has been demonstrated that keeping current customers can boost brand loyalty by 25% to an incredible 95%, as quoted by ThinkImpact.com. Approximately 8% of a company's most devoted customers account for about half of its revenue.

Some businesses derive at least 70% of their value from their most valuable clients.

6. Increased Referral Rates

Repeat customers are more likely to refer friends and family to a business than new customers.

According to Sprout Social, referred customers are worth 16% more in the long run than average customers. This means that over time, customers who come to your company through a referral will generate more money than customers you find in other ways.

How to Measure Repeat Customers: 6 Metrics

Measuring repeat customers is an essential part of understanding the success and growth of an ecommerce business. Businesses can identify areas for improvement and develop strategies to increase customer retention through these metrics.

Here are some of the key metrics used to measure repeat customers:

  • Repeat Purchase Rate

This metric calculates the percentage of customers who make a repeat purchase within a specific time frame. A high repeat purchase rate indicates strong customer loyalty and satisfaction.

  • Average Order Value

This metric calculates the average value of each order made by a customer. Repeat customers have a higher average order value than new customers as they tend to make larger purchases.

  • Customer Lifetime Value (CLV)

CLV is a metric that estimates the total value of a customer to a business over their entire lifetime. Repeat customers have a higher CLV than new customers as they are more likely to make multiple purchases over time and to buy at higher values.

  • Churn Rate

This metric measures the percentage of customers who stop purchasing from a business over a specific time frame. A low churn rate indicates strong customer retention and loyalty.

  • Purchase Frequency

This metric measures the average number of purchases made by a customer within a specific time frame. Repeat customers typically have a higher purchase frequency than new customers.

  • Net Promoter Score (NPS)

NPS is a metric that measures customer satisfaction and loyalty by asking customers how likely they are to recommend a business to others. Repeat customers typically have a higher NPS than new customers as they are more familiar and more satisfied with the business.

What Is the Repeat Customer Rate?

The Repeat Customer Rate (RCR) is a metric that calculates the percentage of customers who have made more than one purchase from a business within a specific time period.

The formula for calculating RCR is:

RCR = Number of Repeat Customers/Total Number of Customers x 100%

For example, if a business had 1,000 customers in a given time period and 200 of those customers made more than one purchase, the RCR would be:

RCR = 200/1,000 x 100% = 20%

This means that 20% of the business's customers made more than one purchase within that time period, indicating a level of customer loyalty and satisfaction.

The Repeat Customer Rate is a valuable metric for ecommerce businesses to track as it can help them identify areas for improvement and develop effective strategies to increase customer retention.

What Is a Good Repeat Customer Rate?

The ideal Repeat Customer Rate (RCR) varies depending on the industry and the business model. However, in general, a good RCR for an ecommerce business is around 20-40%.

The average RCR for ecommerce businesses is around 27%, according to Socital, while top-performing businesses have an RCR of 32% or higher. Businesses with an RCR of 40% or higher generate more than half of their revenue from repeat customers.

RCR can be influenced by many factors, such as the quality of products, customer service, and marketing efforts. Therefore, businesses should focus on continually improving the customer experience to increase their RCR and drive long-term growth.

How to Get Repeat Customers: 7 Strategies

How to Get Repeat Customers

An ecommerce business must actively work to attract and retain repeat customers. Without a loyal customer base, the business will struggle to generate consistent revenue and compete in the market.

Here are 7 strategies businesses can use to increase customer loyalty and encourage repeat purchases:

1. Personalization

Providing a personalized experience for customers can increase customer satisfaction and loyalty. Personalization can be achieved through tailored product recommendations, personalized emails, and targeted advertising.

2. Continued Marketing

Keeping the brand top-of-mind through continued marketing efforts is important to ensure customers remember the business and come back for more. Email marketing, social media advertising, and retargeting are effective methods to keep the brand in front of customers.

3. Omnichannel Experience

Providing a seamless and consistent customer experience across all channels, including online, mobile, and in-store, can increase customer satisfaction and encourage repeat purchases.

4. Customer Programs

Implementing customer loyalty programs, referral programs, and VIP programs can incentivize customers to come back for more and refer their friends and family. Businesses can give out various repeat customer discounts and benefits from these referrals.

5. Excellent Customer Service

Providing excellent customer service can create a positive impression and encourage repeat purchases. Quick response times, order tracking, easy returns and exchanges, and personalized support can all contribute to a great customer experience.

6. Quality Products

Offering high-quality products that meet or exceed customer expectations increase customer satisfaction and encourage repeat purchases.

7. Post-Purchase Follow-Up

Following up with customers after a purchase can show that the business values their patronage and is invested in their satisfaction. Sending personalized thank-you emails or requesting feedback helps build a stronger relationship with the customer.

How to Increase Repeat Customers With the Coretava Tools

Coretava offers a suite of tools that can help ecommerce businesses implement the strategies needed to increase and leverage how to reward repeat customers. Here are some of the ways Coretava tools can help:

Core Loyalty

Core Loyalty for Repeat Customers

Core Loyalty launches and manages customer loyalty programs, referral programs, and VIP rewards programs to incentivize customers to come back for more.

Core Marketing

Core Marketing creates and automates personalized email campaigns, social media advertising, and retargeting ads to keep the brand top-of-mind and encourage repeat purchases.

Core Personalization

Core Personalization offers personalized product recommendations, emails, and advertising to create a more personalized experience for customers, increasing customer satisfaction and loyalty.

Core Omnichannel

Core Omnichannel provides a seamless and consistent customer experience across all channels, including online, mobile, and in-store, increasing customer satisfaction and encouraging repeat purchases.

Core Teams

Core Teams improves customer service by helping build stronger, more qualified, and more united teams.

Encouraging Repeat Customers for Your Ecommerce Business

Repeat customers are the backbone of any successful ecommerce business. Understanding the importance of repeat customers and implementing the strategies to increase customer loyalty help businesses grow and thrive.

Metrics such as the repeat customer rate can be used to track progress and adjust strategies as needed.

Coretava offers a suite of tools that can help businesses improve customer service, automate personalized marketing campaigns, manage loyalty programs, provide a seamless omnichannel experience, and deliver personalized recommendations.

With Coretava, achieve your business goals and reach your full potential.

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Categories

Ecommerce

22

Marketing

11

Omnichannel

02

Loyalty

19

AI and Personalization

08

Tags

Customer Retention

Loyalty

Authors

Daniela Andreevska

Daniela has 6 years of experience in digital marketing for ecommerce businesses.

Aws Alnabulsi

Aws is the Co-Founder of Coretava, a complete retail ecommerce growth platform. He has 6+ years of experience in managing and growing ecommerce businesses.

Carlos Guerberoff

Head de Parcerias na Coretava. Especialista em desenvolver e fortalecer relacionamentos estratégicos. Orientado para resultados e apaixonado por construir conexões duradouras.

Henrique Letoldo

Head of Sales na Coretava. Com vasta experiência em liderança de equipes comerciais, busca constantemente impulsionar o crescimento e maximizar resultados. Apaixonado por inovação e estratégias de vendas eficazes.

Aws Alnabulsi

CEO e fundador da Coretava. Visionário e empreendedor apaixonado, lidera a equipe com visão estratégica e inovação, buscando transformar o varejo através de soluções tecnológicas.

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