Performance Analysis

Key Performance Indicator Repeat Purchase Rate (RPR) in Startups

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One of the most important steps in the growth and development of startups is to turn customers into loyal customers. Calculating and analyzing the key performance indicator Repeat Purchase Rate (RPR) can show the success rate of the business in creating a sense of loyalty among customers. The key performance indicator of Repeat Purchase Rate (RPR), which is one of the important indicators related to users, is obtained according to the following formula.

How to Choose Key Performance Indicators for Our Business?

What is the key performance indicator Repeat Purchase Rate (RPR) and how is it calculated?

Repeat Purchase Rate (RPR) =  Number of customers who made a purchase more than once in one time period / Total number of customers who made a purchase in the same time period 

The key performance indicator Repeat Purchase Rate (RPR) measures customers buying more than once in a given period of time. As this indicator is influenced by business efforts to retain customers, it is a good indicator of the value provided to customers.

If your business is in the field of e-commerce, one of the most important factors for your success is to increase the number of repeat purchases by the customers, but what are the factors that make the buyer become a repeated and loyal customer? In this article, we intend to address the factors that improve the key performance indicator of Repeat Purchase Rate (RPR).

Why is focus on increasing the KPI of Repeat Purchase Rate (RPR) more appropriate than attracting new customers?

It is interesting to note that most e-commerce businesses spend about 80% of their marketing budget on new customers, while 40% of their average revenue is generated by only 8% of their customers. Although attracting new customers is essential to growing in the early stages of a business establishment, many businesses benefit from various advantages of focusing on existing customers and spending money to retain them.

According to research, the average key performance indicator Repeat Purchase Rate (RPR) for e-commerce businesses is between 20 and 40 percent. Achieving a Repeat Purchase Rate (RPR) of 20 to 30% per month requires a lot of business effort. For instance, the e-commerce platform of Shopify was able to have a Repeat Purchase Rate (RPR) of 27%. According to Shopify statistics, the probability of repeat purchases increases to 45% and 56% for customers who have returned for the second time and the fourth time, respectively.

Some factors leading to Repeat Purchase Rate (RPR) are as follows

  1. Creating a dashboard consisting of key performance indicators of marketing and follow them at regular intervals (tools such as Databox can be used that allow you to place all the indicators related to the marketing funnel in one environment).
  2. Preparing a list of customers’ emails and send emails with the aim of creating interaction with the business, increasing the likelihood of visiting the website and finally increasing the Repeat Purchase Rate (RPR) .
  3.  Ensuring the appropriateness of the website environment and creating a pleasant user experience.
  4. Maintaining interaction with customers and answering all their questions and comments on the website.
  5.  Categorizing customers and sending personalized purchase offers.
  6. Designing incentive programs with the aim of revisiting and encouraging purchases.

What are the key performance indicators associated with the Repeat Purchase Rate (RPR)?

Similar to other key performance indicators, it is better to use several indicators in the process of calculating and monitoring the key performance indicator Repeat Purchase Rate (RPR). The most important indicators that are calculated along with Repeat Purchase Rate (RPR) contributing to take a closer look at the current situation of the business include Conversion Rate, Customer Retention Rate, Customer Churn Rate, Customer Lifetime Value,  Purchase Frequency and Website Traffic.

It should be noted that the selection of key performance indicators for a business is influenced by the maturity level of the business, the market in which it operates, the competitive environment and many other factors that require sufficient knowledge and experience. Retiba’s experts are ready to carefully evaluate your startup business model, select key performance indicators, and analyze your business performance. All you have to do is enter your information in the evaluation application form and wait for Retiba’s experts to contact you.

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