What is repurchase rate?

Natalie Smithson
AI enthusiast | Tea addict | Focused on using AI assistants to win the working week

What is repurchase rate?

Repurchase rate measures the percentage of customers who return to make additional purchases from your business within a specified time frame. It serves as a significant indicator of customer loyalty and satisfaction, reflecting your capacity for customer retention.

A high repurchase rate signifies satisfied customers who continually engage with your brand, nurturing long-term relationships and positive business outcomes. By maintaining a high repurchase rate, you solidify your customer base, drive profitability, and establish a positive reputation within the market, ultimately enhancing operational performance and long-term sustainability.

How do you calculate your repurchase rate?

To calculate the repurchase rate, divide the number of customers who have made repeated purchases within a defined period by the total number of customers, then multiply the result by 100 to get a percentage eg. if 50 customers out of 100 make a repeat purchase, your repurchase rate is 50% (50/100 x 100).

This simple calculation empowers your teams to track customer loyalty and engagement effectively, providing valuable insights for strategic decision-making. By actively calculating and tracking the repurchase rate, you can gain a robust perspective on customer behaviour, facilitating informed decision-making to bolster your business performance.

What is a good repurchase rate benchmark?

Aiming for a repurchase rate of 20% or higher is often seen as a robust benchmark, signifying strong customer loyalty, consistent engagement, and sustainable revenue streams.

Rethinking repurchase rate strategies to suit the age of AI

Customer experience has become a vital part of sales and branding. So much so, Forrester found “63% of customers will leave a company after just one poor experience”.

McKinsey says AI automation is now “the quickest and most effective route” to delivering personalised, “proactive experiences that drive customer engagement,” and if you’re looking to improve customer retention and increase your repurchase rate, you need customers to be engaged ― using an AI assistant, you can do this in real time. Pop up on request and it’s a more personable experience and encourages people to stick with you. That close connection gives you a competitive edge too, where AdWeek found 70% of people who “feel a connection to a brand spend twice as much as those who don’t”.

Take the opportunity to examine every part of your service, including how its delivered and in what way, to encourage customers to make repeat purchases and stay loyal.

“Coop wants to build a level of customer experience that is unparalleled in the Swedish retail marketplace. The work that EBI.AI is doing gives us a tool to build strong relationships with our customers and support them with an important part of their daily life.” ~ Amer Mohammad, Chief Digital Officer for Coop Sweden

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What role does customer loyalty play in determining the repurchase rate?

Customer loyalty is integral to a high repurchase rate as well as upsell and cross sell rate success, indicating satisfied customers who want continued engagement with your brand, leading to sustained revenue growth and positive business outcomes.

Can a high repurchase rate positively impact customer satisfaction levels?

Yes, a high repurchase rate often correlates with increased customer satisfaction scores as it signifies repeated positive experiences that lead to brand loyalty and a long-term relationship.

How can I improve the repurchase rate besides offering quality products or services?

Providing excellent customer service, personalised experiences, loyalty programs, and regular communication can enhance the repurchase rate by improving customer engagement and creating stronger connections with them.

Why is tracking and analysing the customer repurchase rate important?

Tracking the customer repurchase rate is crucial as it gives insights into customer retention and satisfaction levels, which may improve your Customer Satisfaction Score (CSAT), helps you identify trends in purchasing behaviour, and allows for targeted strategies to enhance customer loyalty and repeat sales.