Revenue from returning customers is the share of sales coming from repeat buyers. This can be very different from retention rate. A small percentage of loyal customers can still make up a big part of your revenue. Or the other way around.
So it’s smart to try and increase both retention rate and the spending of returning customers. Go the extra mile for those customers to win their loyalty so they buy as much as possible.
The formula for calculating the share of revenue from returning customers is:
RRC = (Revenue from repeat purchases / Total Revenue) * 100
Our recent research found an average revenue from returning customers of 60%. That’s beyond awesome, but keep in mind that most of the brands surveyed prioritize retention so it’s a result of intentional efforts. What we also see in the data is that the general correlation between retention rate and share of revenue from returning customers is 1:2, meaning that whatever the share of return customers is, the percentage of revenue they generate is at least double that. Returning customers are essential for growing in revenue.
|High-performance sports clothing||64%|
|Own food products||47%|