Repeat purchase rate
Repeat purchase rate is the share of customers who bought more than once in a given period. If 1,000 people bought and 250 of them bought a second time that year, repeat purchase rate is 25%. It is a fast read on whether the product earns another order, which decides how much you can afford to pay for the first.
Theodor Lindfors, Founding Marketer ·
Formula
Repeat purchase rate = customers with 2+ orders / total customers in the period
How to calculate repeat purchase rate
Let's take a shoe workshop in Mexico as an example. They make leather shoes and sell them online to Mexico and the United States. A first pair can be a gift, a treat, or a test of the fit. A second pair is a verdict on the product. Repeat purchase rate is the share of buyers who came back.
Count customers with two or more orders in the period, divide by all customers who ordered in that period, and multiply by 100. Let's take a shoe workshop in Mexico as an example. They make leather shoes and sell them online to Mexico and the United States. The workshop has 5,000 customers in twelve months. 900 of those 5,000 customers placed a second order. Repeat rate is 18%. Say whether the window is 90 days, twelve months, or all time. Those are three different metrics wearing the same name. Cohort it where you can. A repeat rate measured on customers acquired this month will always look terrible, because most of them have not had time to come back yet.
Why repeat purchase rate matters
Repeat purchase rate is the engine behind LTV (customer lifetime value: what a customer is worth over time). A business where 40% of customers buy again can outbid a business where 10% do, on identical products at identical prices. Let's take a shoe workshop in Mexico as an example. They make leather shoes and sell them online to Mexico and the United States. The workshop can pay more to acquire a loafer customer if the boot comes later. Acquisition efficiency gets all the attention, and repeat rate quietly sets the ceiling on it.
Repeat purchase rate is also the earliest honest signal about product and fulfillment quality. People do not come back to a bad fit regardless of how good the ad was. Let's take a shoe workshop in Mexico as an example. They make leather shoes and sell them online to Mexico and the United States. If Meta ROAS (return on ad spend) looks strong and repeat rate is 8%, the ads are selling a first pair that does not earn a second.
How to read repeat purchase rate
Read repeat purchase rate by acquisition channel. Discount-led channels often produce a high first order count and a poor repeat rate, which makes them look better on ROAS (return on ad spend) than they deserve. Let's take a shoe workshop in Mexico as an example. They make leather shoes and sell them online to Mexico and the United States. A 25%-off prospecting campaign can fill the week and starve next season.
Watch repeat purchase rate alongside time to second order. A stable 18% with a lengthening gap between orders is a slow decline that a single quarterly number will not show. Let's take a software company as an example. They sell a subscription tool to plumbing companies. That business has a different shape (churn, not a second pair). Do not copy a software retention chart onto shoes.
Common repeat purchase rate mistakes
- Comparing a shoe workshop's rates across different time windows and calling it improvement.
- Including subscription renewals in a rate meant to measure voluntary repurchase. That is a software company's world, not shoes.
- Measuring repeat purchase rate on a recent cohort that has not had time to buy again.
Lemonado
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Lemonado reads spend and results together from the platforms you connect, so you can ask for this metric without building a sheet. It can also act on what it finds, inside rules you set.