Identifying your repeat customers is the first step towards growing your business maturity. Why? Because correctly handling and increasing your repeat customers database shows that your company understands that investing in retaining customers and turning them into loyal ones is both much cheaper than acquiring new ones and more profitable in the long run.

A repeat customer is a customer who has purchased from your business time and time again. He already is or eventually might become what is called a loyal customer.

As an eCommerce store owner, you have access to a customer data platform, and you also pay close attention to harnessing and using the gathered data in your best interest. If so, today, we’ll talk about the importance of repeat customers and how to identify them. Sometimes, they will derive directly from your returning customers. These are the customers that tend to place more than one order in your online shop. In customer journey terms, they are known as the converted customers that are most likely to become retained, namely repeat customers. 

Paying close attention to returning customers’ data will help you identify customers that are already placing repeat orders – or are more prone to do so in the future. Communicating differently to these customers will net you visibly higher revenue in the long run – with much lower costs than you would endure if you’d focus your marketing efforts solely on customer acquisition. 

Repeat customers bring more real value to your business than any other kind of existing customers, so you need to pay more attention to data concerning them. As noted a bit earlier, most eCommerce stores have an integration of a customer data platform, and most customer data platforms have helpful Customers Over Time reports. 

You can use these reports to find out how many of your customers are first-time buyers and how many of them are returning customers. You can do it by applying simple search filters. For example, suppose you’re not using anything more advanced than the classic Google Analytics. In that case, all you have to do is go to the Audience Insights tab, find the Behavior section, and then see your first-time buyers and returning purchasers in the new vs. returning users tab. You can also see the percentage of revenue coming from your returning customers.

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Why repeat customers are important

Repeat customers are important because they represent your highest revenue source, having the most customer value, almost regardless of the type of business or online store you run. It stands perfectly true if we consider the Pareto Principle and encourage customers to become repeat ones much more important.

In the year 1906, at the beginning of the 20th century, the famous economy analyst Vilfredo Pareto deducted something that still holds true in 2021’s economy models: 20% of your customers will be responsible for 80% of your business profit. It’s called the Pareto Principle.

Running your repeat business procedures by the Pareto Principle adds a whole world of meaning to taking care of your repeat customers at all times, as they will be the ones that make up for most of your yearly revenue. They are the most valuable customers to your business. 

After cross-industry customer retention research, ResearchGate found out that the repeat customer rate among the businesses they reached ranges between 21% and 37%. If you wonder what a good repeat purchase rate is, the research shows us the average repeat purchase rate across all industries: around 28%. To find out where you currently stand compared to the 28% rate, you can use one of the formulas below. First focuses on customers that place a second order, the second on a customer that buys at least twice from your shop:

Var. 1: Repeat customers / Total customers x 100 = Repeat Customer Rate

Var. 2: Repeat customers who purchased 2+ times / Customers who have purchased 1+ times x 100 = Repeat Customer Rate

The repeat customer profile is one with high customer value. Let’s show you how you can keep in closer touch with them once you identify them and generate more and more repeat customers. Many marketers make the mistake of focusing solely on acquiring new customers and ignore retention strategies and customer churn rates reducing marketing tips. We won’t.

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The secret of making a customer a repeat customer 

The secret of making a customer a repeat customer is to look further by transforming a repeat customer into a loyal one via customer loyalty programs, as they are a category of high-value customers for your business or online shop. Of course, some of your repeat customers spend a lot but not all become loyal ones. Yet.

Turning your current customers into loyal customers happens mainly through employing retention marketing tactics. These advanced marketing tactics emphasize more direct and personal customer connection and engagement, directly increasing awareness and interest in your business.

The first step is to calculate your customer repeat rate using one of the formulas presented earlier – and then try to set improvement goals as realistic as possible, taking into account your eCommerce business size and marketing budget. The second step is to carefully analyze your customer’s preferences, their observable buying patterns, the average time between their purchases, the brands they get most excited by, and the exact products they buy from these brands. Taking this step increases customer knowledge.

Of course, you also have to consider the amount of money they are spending per purchase. A repeat purchaser of one box of matches isn’t exactly your most high-value customer, after all. 

In the end, take a look at the following fluctuation: do your customers have periods when they spend more or less? With all these metrics in mind, you will gain the most important insights into their behavior and understand how to approach them.

Use the gathered information, stay relevant to your current customer base, and try to enhance customer experience at all times. Doing so will increase the chances for them to further convert into valuable, repeat buyers. You can do this in various ways:

  • Constantly checking in with them after they get at the end of the sales funnel and complete a purchase of your product or service; 
  • Offering them excellent customer support; 
  •  Providing value to your customers for their purchase, even post-conversion

Making decisions based on customer behavior will visibly increase both customer satisfaction and customer loyalty.

Another good tactic for improving customer retention would be to shift from simple, overused transactional communication messages towards more empathetic, personal, and meaningful interactions. Your marketing department has to invest more time and effort into post-purchase strategies, as well as in your customer support department and social media presence.

Among the essential things eCommerce marketers should know about the value of repeat customers is that upselling and cross-selling are much more likely to happen within your repeat customer base. Besides, repeat customers have a notably lower likelihood of abandoning products in their carts.

The probability of selling to a new customer ranges from 5-20% (as in them going all the way down the sales funnel, past the checkout process, where most customers abandon it). Returning customers spend 67% more than first-time customers. The Pareto Principle mathematically stands true again, proving that you should stretch your efforts beyond improving retention rates towards creating repeat customers.

Here starts the domain of the CLTV, the Customer Lifetime Value. To increase your CLTV, you need to transform repeat customers into loyal ones by employing customer loyalty programs. Start by segmenting your highest-value customers and target them with dedicated campaigns to increase their sense of belonging to your brand. Send a coupon code or a special offer during the month of their purchase when the transaction is still fresh in the customer’s mind, incentivizing him to move beyond being a repeat customer. Also, always be ready to offer them special discounts or product/service packages.

In the end, try, if your estimated revenue allows for it, to offer rewards in exchange for purchases. This strategy should be aimed at your high-value customers and has a high success rate: around 70% of high-value customers will become repeat customers when presented with special rewards after making a purchase.

To sum everything up, besides bringing the most revenue for your eCommerce business, repeat customers turned loyal is your best free of charge marketing device. They are more likely to start telling others how great your online store is and what great rewards you can get by becoming a loyal customer. 

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FAQ

What is a repeat customer?

A repeat customer is a customer who purchases from your business time and time again. He has all the chances to be already or eventually become what is called a loyal customer.

What do you say to a repeat customer?

It would help if you were more empathic with your repeat customers. Regardless of the communication channel you use, try to make the content more meaningful and personal for this particular category of customers since they drive around 80% of your revenue, according to the Pareto Principle. 

How do you gain repeat customers?

Turning your current customers into loyal customers happens mainly through employing retention marketing tactics. Invest in more direct and personal types of customer connection and customer engagement, increasing awareness and interest in your business. Strategies such as checking in with them after they complete a purchase or offering excellent customer support have repeatedly proven successful when increasing your repeat customer rate. 

What does it mean to retain customers?

Retaining customers means making sure that you incentivize customers to shop from your time and time again. Investing in customer retention is much cheaper and profitable than investing in acquiring new customers.