Repeat Purchase Rate
Quick definition
Repeat purchase rate is the percentage of customers who have placed more than one order in a period. It is also called the repeat customer rate.
Formula
Repeat Purchase Rate = Customers with 2+ Orders ÷ Total Customers × 100
Formula variables
- Customers with 2+ Orders
- Customers who placed two or more orders in the period.
- Total Customers
- Customers who placed at least one order in the same period.
Worked example
- Customers in the period
- 4,000
- Customers with 2 or more orders
- 800
800 ÷ 4,000 × 100
Result: 20%
One in five customers ordered more than once. The figures are illustrative.
How definitions differ
- Order-based version
- Repeat Orders ÷ Total Orders × 100
- Some reports divide repeat orders by all orders. This is a different measure from the customer-based rate.
- Time window
- The rate depends on the window. A rate over twelve months differs from one over three, and a short window under-counts slow repurchase cycles.
How to interpret it
The rate shows how much of the business comes from customers who return. A higher share of repeat customers often means lower reliance on paid acquisition, though it depends on the product's natural buying cycle.
Products bought rarely will have low repeat rates for reasons unrelated to marketing.
When it is useful
- Measuring loyalty in ecommerce and subscription-adjacent businesses.
- Comparing customers acquired through different channels.
- Choosing between acquisition and retention efforts.
Limitations
- It depends on the time window and the product's buying cycle.
- It counts customers, not the value of their orders.
- Guest checkouts can make customers hard to identify.
Common mistakes
- Comparing windows of different length.
- Mixing the customer-based and order-based formulas.
- Ignoring products with long natural repurchase cycles.