Grow revenue by increasing repeat purchase rate
As a local business owner, you are putting a lot of money and effort into driving more foot traffic. But, are you tracking the effectiveness of your effort? How many of them are new customers? How many are repeat visits?
Many businesses are neglecting that it is 7X more costly to convert a new customer than an old one. Knowing what Repeat Purchase Rate is and periodically monitoring it are vital to building a successful business.
The Repeat Purchase Rate shows you what percentage of customers are coming back to your store to shop again. It is a good metric on how loyal your customers are and an important factor in customer lifetime value. A low value suggests that your customers are leaving maybe because of a bad purchase experience (You will surely want to find out). On the other hand, a high value indicates that your customers are satisfied and will continue to spend; thus you also don’t have to spend more marketing dollars on them.
To calculate Repeat Purchase Rate, just divide the number of customers that have bought from you more than once by the total number of customers that have bought from you before. For instance, suppose you have 100 total customers, of which 23 have shopped more than once, your repeat rate would be 23%.
One fascinating information about repeat visit rate is that it can have a compounding effect on your revenue. [1]
- At a 10% RPR, you’re adding 11% more revenue
- At a 15% RPR, you’re adding 18% more revenue
- At a 25% RPR, you’re adding 33% more revenue
- At a 50% RPR, you’re adding 100% more revenue (doubling your revenue)
Just think about this: If 10% MORE of your customers come back to make purchases, how much of your revenue would increase?
To learn about how Smiley can help you increase your repeat purchase rate, request a free demo here.
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