Retention Rate Over Time: Is It or Isn't It a Repeat Customer?

Measuring your customer retention rate helps you understand where your business stands and where you want to take it.

Building customer loyalty should be a top priority for your ecommerce business, because sustainable growth and profitability depend on it—as you minimize the costs tied to acquisition strategies: the more customers you lose, the more you spend to win new ones.

You have probably asked yourself: How do I get people who have already purchased to buy again? What is the key to retention? Although it may sound surprising, it is not price. 80% of people prioritize qualities such as delivery speed, service, and convenience over product value.

Following that line of thinking, the first step to finding opportunities for improvement is to evaluate your customer retention rate, or customer retention rate (CRR) in English.

In this post, we explain how to calculate this metric and how it relates to purchase frequency per customer—another useful data point for building an effective action plan that benefits your business.

How to measure your retention rate (CRR)?

Retention rate is a metric used to evaluate the service you offer and your customers' loyalty. The higher the percentage, the better your repurchase levels and the positive perception your users have of your brand. To find this indicator, you need to know your total number of customers in a given period of time—and of those, how many are repeat customers.

In the following example, we will consider an ecommerce business that had 600 customers during the last month, of which 200 were repeat customers: 👇

Now that you know how to perform this calculation, you can do it monthly, quarterly, or semiannually according to your goals.

You can also compare results from one period to another to evaluate its behavior:

• If your CRR stays stable or increases, great! You are doing things right—your operation is generating happy, engaged customers.
• However, if performance declines, it could be a warning sign of dissatisfied customers or poor experiences, so you will need to review your strategy, processes, and other operational variables that help you identify improvements and increase the likelihood of repurchase.

Retention rate over time: Is it or isn't it a repeat customer?

What happens when a customer stops buying from you for a certain period of time? Do they stop being a repeat customer? Does this necessarily mean their loyalty level dropped? It is relative. Let's look at the following example, where we assume you have an ecommerce business selling appliances and technology products:

👉 María is a woman who enjoys Christmas and sharing it with her loved ones. Every year in December, she buys a product from your ecommerce store for each family member as an end-of-year gift. She usually chooses tech items that are educational or entertaining. For María, it has become a tradition to shop at your ecommerce store during this season, because she receives the guidance and support she needs to choose the ideal gift for each member of her family.

👉 Now let's look at Juan, a retail technology merchant who buys products on your website and sells them at a small shop in his neighborhood. Juan has quarterly turnover, meaning it takes him 3 months to sell all the units he purchased. After that time, he buys from your store again because he finds good prices and after-sales service.

👉 Finally, we have Francisco, who runs an independent company with several locations across the city. His sales volume allows him to buy from you twice a month to meet demand. He chooses your online store because he always finds available inventory, and he also enjoys advantages such as fast, high-quality delivery—something he does not find at other ecommerce stores.

As we can see, they are all customers, although with different consumption frequencies. They choose your store monthly, quarterly, and annually according to their needs. Would you evaluate all three as repeat customers? Do you measure retention rate in general, individually, or both? Monthly, quarterly, annually, or all of the above? It all depends on your measurement goals, marketing strategy, and planning—which will be different for each business.

That is why there is no set timeframe or period after which a customer stops being considered repeat—it is each ecommerce business that determines how to evaluate its CRR and under which periods. Some companies may classify as repeat a user who buys monthly; others only someone who buys at least once every 3 months.

In this case, the general formula for calculating CRR changes, and you can adjust it according to the frequency with which you measure this indicator. For example, if within your strategy a repeat customer is one who has made a transaction in the last 3 months, the formula would look like this:

You can also measure your CRR during specific periods with high sales volumes, when customers increase their purchase intent thanks to greater benefits and offers. Dates with this effect include, for example: Cyber Monday, Buen Fin, Black Friday, the Christmas holidays, and others. Have you identified users in your database who only buy from you during these dates? It is more common than you think—you can have repeat customers here too, and use this information to target your advertising campaigns toward these profiles with high purchase probability.

💡 #CubboInsight Buen Fin is coming up—how many customers in your database bought from you during past editions of this event? Many of them could be repeat customers this year.

What is the optimal retention rate?

‍In general, there is no set optimal CRR value, because it does not behave the same across all categories. For example, the rate will not be the same in a grocery business with frequent consumption as in an appliance company where products are replaced less often.

⚡CubboHack: If you run a business focused on selling electronics, check out this mini-video "What ecommerce won't tell you," where technology industry experts explain how they apply repurchase strategies.

Therefore, the best approach is to focus on your own retention rate based on your existing customers, new customers, and the total you achieve at the end. Always monitor its behavior to protect its evolution over time and maintain repurchase potential.

To adapt this to your ecommerce business, we suggest keeping the following in mind:

What was your customer retention rate in previous months? If you compare the current rate with past ones, you can identify its trend. If it is rising, identify what new action you implemented and amplify it. If it is falling and you are losing customers, detect the error and fix it.

Compare with your competitors. Although it may not be easy to obtain this information, if you have the opportunity, it will be an excellent benchmark to validate how your ecommerce business performs against others in its category. Another option is to search for studies and surveys on the topic in the sector where you operate—many organizations conduct this type of research.

Benefits of measuring retention rate

Knowing the customer retention rate helps us understand where we stand and the capacity of the ecommerce business to project where we want to go. In that sense, evaluating your CRR will help you:

• Measure your customers' satisfaction level to identify opportunities within your operation.
• Carry out periodic measurement that allows you to build retention and investment strategies based on experiences, satisfaction, and customer service.
• Know and monitor valuable data for the company's sustainable growth.
• Identify your most loyal customers, request reviews and testimonials, and showcase them to site visitors to inspire purchase confidence.
• Design marketing and social media strategies with a stronger focus on conversion and customer retention.

In pursuit of loyalty: 5 #CubboTips to improve your retention rate

The first step to retaining existing customers is to understand them—meet and satisfy their current and future needs after the first purchase. Aim to build a long-term relationship that generates new sales, referrals, savings on acquisition strategies, and a longer customer lifetime, to improve retention rate.

The following tips will help you with this goal:

1. Know your customer‍

Nothing will be more useful for deploying a loyalty strategy than knowing who your consumers are and what they are like. For this, it is essential to define a buyer persona—that profile with the characteristics of your ideal customer where you can identify their desires and expectations. This way, you will know what matters most to them and how to satisfy them to earn their loyalty.

2. Make them feel special to your brand

The more they feel that your online business values and cares about them, the greater their satisfaction will be and the more likely they will buy from you again. To achieve this:

• Run surveys and analyze purchase preferences and interests to segment and personalize your communication.
• Share valuable information through consistent communications, emails, or highly personalized messages.
• Offer rewards and incentives, make suggestions, and invite them to discover other products. Let them know you remember their birthday or other special dates.
• Encourage feedback and ask about their purchase experience and interactions with business staff—request useful comments.

⚡#CubboHack: Within the Cubbo platform, you can identify who your new customers are and build a retention method focused on new buyers—people you can offer exclusive discounts or gift items to boost retention rate and your final customer count.

Identify new buyers on the Cubbo platform

3. Treat them specifically

According to data from various studies, businesses that base their operation on their customers are 60% more profitable. All your customers deserve attention, and this is where service quality plays a decisive role in loyalty and retention. This area must ensure everyone has an outstanding experience in every interaction.

To do this, using tools such as Simla.com, an AI-powered omnichannel CRM, can be key: it lets you centralize WhatsApp, Facebook, and Instagram in a single inbox, manage messages efficiently, and offer personalized responses without missing sales opportunities. This way, you ensure consistent, timely support that increases customer trust and their likelihood of buying again.

Focus on the moment each buyer is going through to improve your rates:

• For users who do not know you and are just getting closer, captivate them with valuable content that builds trust.
• If they already buy your products regularly, build a close relationship using tools such as personalized email marketing and other communication channels.
• If they are a repeat, loyal customer, in addition to the above, offer them greater incentives and differentiators that impact their wallet and make their money go further.
• If they have not bought from you in a long time, give them promotions and other incentives that help you avoid losing them and maintain your customer count.

In all cases, you must make them feel they are important to your ecommerce business.

4. Build loyalty

‍For a customer to be loyal, beyond economic benefits and service, you must create emotional bonds with the brand through strategies aligned with their desires, needs, and aspirations. This way, you will be offering more than an attractive promotion or offer—a customer-centered value proposition. Users will value discounts, giveaways, free services, payment options, or other conditions more if they feel they were designed for them, to support them or solve one of their needs. ‍

Among the loyalty strategies with the best results are gift vouchers or points programs accumulated through purchases that can be redeemed for preferential discounts or other benefits. This initiative has contributed excellently to building brand bonds and driving repurchases at giants like Mercado Libre. Analyze this option and evaluate its viability for implementing it in your online store‍

5. Surprise with your service

A satisfied customer is a happy, loyal customer. Excellent service should be your calling card and a constant in your relationship with the customer. Evaluate each stage of the process and implement improvement actions—analyze factors such as product preparation and delivery time (the faster, the better), the follow-up provided to the customer about their order status, delivery conditions, after-sales service, and handling of exchanges and returns, among others. Remember that customer service and logistics are two essential components in its operation, and they largely determine the perception and experience the customer has.
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Want to learn more about the importance of logistics in building loyalty? Read our article: Fulfillment: the solution for building loyalty in ecommerce

The work does not end when you acquire a customer and get them to buy—that is where it really begins. Retention is what allows your online store to scale over time and maintain sales growth that makes it more relevant in the market. Protect and build loyalty with your current customer base, then complement your actions with attracting new buyers.

If you liked this content and want to learn more about other highly useful measurement indicators for your online business, visit our article: 6 indicators you cannot stop measuring in your ecommerce

At Cubbo, we help you improve your retention rate through the best delivery times and after-sales service. Stop worrying about your operation—we handle it for you. Let's start working together—send us a message here and we will gladly get in touch.

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Information Sources:

Hubspot / Doofinder / Vtex / Hubspot Content‍