Why Repeat Customers Are the Lifeblood of Your Ecommerce Business

Smart retailers both online and off value one kind of customer above all others: repeat buyers. Why? Because the most profitable customers are those you already have, so it pays to keep them coming back.

The average ecommerce storeowner spends more than 80% of their marketing budget on customer acquisition. Yet an Adobe Digital Index study showed that more than 40% of the total revenue generated came from only 8% of the sites' visitors: namely, returning customers and repeat buyers.

The Numbers Don't Lie

• 61% of small and medium-size businesses report that more than 50% of their revenue comes from repeat customers
• It takes 5-7 new shoppers to bring in the same amount of revenue as a single repeat buyer
• It costs 5 times as much to acquire a new customer than it does to keep an existing one
• It costs 16 times as much to bring a new customer up to the spending level of repeat purchasers

Higher Conversion Rates

It's also easier to sell to repeat buyers: Whereas the average conversion rate for ecommerce businesses is 1%-3%, a repeat customer has a 60%-70% chance of converting. According to Adobe, repeat buyers are 9 times more likely to convert than a first-time shopper.

Growing Order Values

Repeat purchasers tend to spend more the longer they stay with you. A study by Bain & Co. shows that in the apparel category, a shopper's 5th purchase was 40% larger than their first purchase, while their 10th purchase was 80% larger.

Word of Mouth Marketing

Repeat purchasers double as your best brand advocates, telling an average of 4-6 other people about their experience with you. More than 90% of consumers trust and buy from a brand recommended by friends or family.

The Bottom Line

A mere 2% increase in customer retention is the equivalent of cutting costs by 10%, while increasing customer retention by just 5% boosts the average company's profitability by a staggering 75%.