Email & Retention
Customer retention rate vs repeat purchase rate: what's the difference?
Repeat purchase rate and customer retention are related but not always calculated the same way.
Repeat purchase rate
A simple ecommerce version measures the percentage of customers who place more than one order during a period or cohort window. Example:
1,000 customers.
300 buy again.
Repeat purchase rate = 30%.
Retention rate
Retention usually asks what percentage of an original customer cohort remains active or returns during a defined later period. The exact formula varies by business model. Subscription brands often measure retention differently from transactional Shopify stores.
Why definitions matter
A company can report "40% retention" while another reports "25% repeat purchase rate" and both be describing healthy behaviour using different windows and denominators.
Pick a consistent cohort view
For ecommerce, useful reporting can include:
- Percentage with second order by 90/180/365 days
- Time to second purchase
- Repeat contribution
- Orders per customer
The metric should help you understand whether acquired customers become more valuable over time.
Connect retention metrics to acquisition targets
If your retention metrics look good but do not connect clearly to LTV or allowable acquisition cost, send us an inquiry.