Customer retention is the foundation of long-term ecommerce success. Acquiring new customers is important, but keeping them coming back is where profitability really scales. In this article, we’ll break down the key customer retention metrics every ecommerce brand should track—and how to interpret and act on them.

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Why Retention Matters

• Lower acquisition costs: It’s more cost-effective to retain an existing customer than to acquire a new one.
• Increased Lifetime Value (LTV): Repeat customers spend more over time.
• Stronger brand loyalty and referrals: Satisfied customers become advocates.

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Key Customer Retention Metrics

1. Repeat Purchase Rate (RPR)

Formula: (Number of customers who made more than one purchase / Total number of customers) × 100

This shows the percentage of customers who come back to buy again. A healthy RPR indicates strong product satisfaction and effective retention marketing.

Benchmark: For most ecommerce brands, 20–30% is a good target.

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2. Customer Lifetime Value (CLTV or LTV)

Formula: Average Order Value × Purchase Frequency × Average Customer Lifespan

CLTV estimates how much revenue a customer generates over their lifetime. The higher the LTV, the more you can afford to spend on acquisition and retention.

Use EcomBiz.AI to calculate dynamic LTV based on marketplace data.

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3. Purchase Frequency

Formula: Total Orders / Total Customers

This tells you how often customers buy from your store within a specific period. Increasing purchase frequency often leads directly to higher LTV.

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4. Churn Rate

Formula: (Customers lost during a period / Customers at the start of the period) × 100

Churn rate measures how quickly customers stop buying. A rising churn rate signals the need for better post-purchase engagement.

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5. Time Between Purchases

This metric tracks the average time it takes for a customer to return and place another order. Shorter intervals generally indicate higher engagement.

Tip: Use email/SMS campaigns to re-engage customers just before their average reorder point.

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6. Net Promoter Score (NPS)

A qualitative retention signal, NPS gauges how likely customers are to recommend your brand to others.

Formula: % Promoters − % Detractors

Use NPS surveys post-purchase or periodically to gather loyalty data.

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Tools to Track These Metrics

• Google Analytics
• Ecommerce platforms (Shopify, BigCommerce, etc.)
• CRM/marketing automation tools (Klaviyo, Omnisend)
• EcomBiz.AI Reports & Dashboards

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How to Improve Retention

• Use email flows for post-purchase follow-ups, reviews, and personalized offers
• Offer loyalty programs or incentives for repeat buyers
• Segment customers by behavior for targeted marketing
• Improve fulfillment speed and communication
• Make returns seamless and stress-free

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Final Thoughts

Retention metrics help ecommerce businesses move beyond transactional thinking and build long-term customer relationships. By tracking these KPIs and using insights from platforms like EcomBiz.AI, you can boost revenue, improve customer satisfaction, and grow sustainably over time.