Let'southward say yous noticed your business wasn't acquiring every bit many new customers as y'all expected, and you desire that to alter. Well, believe it or non, one of the most sustainable ways to improve your customer acquisition toll is through customer retention. The reality is that the customers yous already have are the most assisting, and it's worth your time and effort to go on them effectually!


Before y'all go ahead of yourself, let us explain. Obviously, acquisition is important because you can't have a repeat purchaser if they never make that showtime purchase. Nevertheless, the problem is that the average ecommerce store devotes more than fourscore% of their marketing budget to acquisition, forcing retention to accept a back seat.

repeat customers - adobe revenue graphic

Source: Adobe Digital Index

Although this method of budgeting is common, it seems odd when y'all consider that 41% of an ecommerce store'due south revenue is created past only viii% of its customers; this 8% is made up of your repeat customers, making it clear that they are extremely profitable!

In this post, nosotros'll  get over the stats that illustrate the ability of repeat customers and the profits they represent.  By the end, we guarantee you lot'll have the proof yous demand to believe that retention marketing is worth adding to your marketing toolbox.

5 reasons repeat customers are profitable

one. A repeat client is more likely to store with you again and once more

I know what you lot're thinking—this seems pretty obvious.  After all, a repeat customer is, by definition, a site visitor that has made at least ii purchases. What'south Interesting, nevertheless, is that a customer becomes increasingly more likely to purchase from you again equally their amount of purchases increases.

repeat customers likelihood of purchase

After one buy, a customer has a 27% chance of returning to your store. While that's not a horrible return rate, if you can get that client to come back and brand a 2nd and third buy they have a 54% take a chance of making another purchase.

You lot may exist wondering how you can inspire your customers to make that 2nd or third purchase, and the play tricks is being careful with how yous entice them. While you lot may immediately think that giving a discount on the next order is a not bad way to get a customer to return, y'all should actually be cautious with this tactic. Discounts are effective at getting a client back, but they almost always set a negative expectation for your customers that you may non always be able to fulfil.

repeat customers discounting spiral

Customers who receive a discount either first to expect a discount every fourth dimension or wait until a discount exists to make another purchase. Instead, we recommend using sustainable retention tools like these to encourage customers to come back to your site.

two. A echo client is easier to sell to

While conversion rates in ecommerce are volatile and vary by industry, nearly experts judge that the average conversion rate is somewhere betwixt i% and 3%.

"A repeat client has a 60 to 70% take a chance of converting."
Paul Farris (Marketing Metrics)

According to Paul Farris' book Marketing Metrics, a repeat customer has a  60% to 70% chance of converting. This means that the more repeat customers you have, the less you'll have to spend on conversion tactics similar abandoned cart offers.

Adobe conducted a similar study that looked at conversion rates of echo customers. They found that a customer who has purchased with your store ii times before is 9 times more likely to convert than a get-go-time shopper.

"Repeat customers are 9 times more than likely to catechumen than a beginning time shopper."
Adobe Digital Index

As you tin can run across, that's a big fasten in conversion rates from merely a few actress purchases per client!

iii. Repeat customers spend more on each buy

Not only practise repeat customers convert more often, they have a higher boilerplate lodge value than first time buyers. This means that your repeat customers are buying more from your store and more often!

The number of previous purchases and how long they've been a customer directly impacts how much a repeat customer spends.

Let'due south wait at the starting time cistron affecting how much a repeat customer spends: the number of previous purchases. Did yous know that your loyal top x% spend iii times more than per order than the lower 90%, and your tiptop 1% of customers spend v times more than than the lower 99%.

repeat customers spending

The next important factor is how long a customer has been shopping with you. A study by Bain & Company found that apparel shoppers purchase 67% more than per order after shopping with a company for thirty months.

repeat customers bain company over time

They also found like results in all of the categories they studied. Clearly, repeat customers take a high lifetime value, which contributes to a higher value per order over time.

4. Repeat customers spend more at key times

Most ecommerce merchants brand the majority of their revenue during ane particularly busy season. If you lot sell bathing suits, you'll run across a spike in March or April. If y'all sell costumes, you will see a spike in October. That being said, the busy fourth dimension for most merchants is between Black Friday, Cyber Monday, and Christmas.

The surge in sales comes from both increased demand leading to more potential shoppers, and from people purchasing more due to the season. Just how much more exercise consumers buy in the busy season?

According to Adobe, the average shopper spends 17% more per transaction during the holiday rush. While this is great news, your store'southward echo customers actually spend 25% more per transaction during the decorated season.

Not only are repeat customers more valuable when shopping, they as well provide you with some massive marketing potential. A repeat customer gives your store increased discussion-of-oral fissure advertising, which is almost ever regarded as the best kind.

Customers refer more people to a brand when they have made more purchases with that store.

The corporeality of people a client refers to your site increases with the amount of purchases they have fabricated, according to Bain & Company. Each time a client makes a purchase they are becoming more comfortable with you lot and are more willing to make a positive referral.

repeat customers bain company repeat purchases

Bain found that later 10 purchases, shoppers refer 50% more people to a store than a one fourth dimension purchaser. This study demonstrates that echo customers tin can actually increase their profitability past attracting more shoppers.

This referral procedure can be further amplified past encouraging referrals with points every bit part of a loyalty plan (i of the strongest retention tools).

Echo customers are important

Increasing your store's profitability starts with the customers you already have. Echo customers are non only going to spend more at your store more ofttimes, but they'll also help market to new customers making them a powerful client conquering tool. Focusing on customer memory is a key step in getting the most out of your repeat customers.