Why DTC sellers need to know their repeat purchase rate

Guides & Tips
August 28, 2023

In today's competitive market, DTC sellers face intense pressure to not only attract new customers but also to retain existing ones. One key metric to measure your success is your repeat purchase rate. Let's discuss why your repeat purchase rate is crucial and how to use it to increase profits.

Why your repeat purchase rate matters

Repeat customers are crucial for the long-term success of any business. Not only do they spend more than first-time buyers, but they also require less investment to keep active. According to a study by Bain & Company, increasing customer retention rates by just 5% can boost profits by up to 95%.

We've looked through the data on 130K+ Shopify stores and have identified three key ways knowing your repeat purchase rate can help increase your bottom line.

Identify what matters to your customers

Knowing the repeat purchase rate can help DTC sellers identify areas where they can improve customer retention. For instance, if the repeat purchase rate is low, it could indicate that customers are not satisfied with the product or the customer experience. By analyzing the reasons why customers are not returning, online sellers can make changes to improve their offerings, customer service, or marketing strategy.

Reward your most valuable customers

By keeping track of your repeat purchase rate, you can become aware of who your most valuable customers are. These individuals frequently buy and have a higher AOV. By getting to know who these customers are and what motivates them when they shop, you can develop strategies that will make those buyers even more loyal while increasing their spending levels.

The easiest way to keep these shopping with your brand is through a loyalty program.  Loyalty programs that are built specifically for Shopify sellers like Rivo loyalty & rewards offer the ability to create custom rewards programs that incentivize your most lucrative customers with unique gifts, discounts, status, and even early access to your newest products.  

Rivo loyalty platform built for Shopify sellers

Forecast your future revenue

Identifying the repeat purchase rate is essential for forecasting future revenue. Knowing how many customers will likely make a repeat purchase can help DTC sellers plan their inventory, staffing, and marketing efforts more effectively.

How to increase your repeat purchase rate

Increasing your repeat purchase rate is essential for Shopify sellers looking to stay competitive and grow their profits. Here are some key tactics that you can use to increase the repeat purchase rate of your eCommerce store:

  • Offer personalized discounts or rewards: Personalized discounts lets your customer know you understand what matters to them and builds trust.
  • Create timely emails: Send out emails that offer discounts and incentives for repeat buyers when they're most likely to be shopping.
  • Focus on customer service: Make sure your customers are getting the answers and help they need in a timely manner.
  • Analyze customer feedback: Take your reviews seriously so you can improve. It's often said the issue isn't what customers remember, it's how it was handled.
  • Examine your competitors: Analyze what your competitors are doing and find ways to differentiate yourself!

To maximize sales and achieve the desired 12:1 CAC-LTV ratio, it's essential to track your repeat purchase rate while using the strategies referenced above. When done correctly, you can experience a 40% improvement in revenue with ease.