# Retention Rate vs. Repurchase Rate?

What is the difference

Customer Retention Rate answers the question: how many of your customers are you retaining over time?

Customer Repurchase Rate answers the question: how many of your customers are making subsequent purchases 2, 3, 4, 5, 10 more times? This is answering the question; out of customers who originally purchased in each month, how many made another purchase? And when?

If we look at month 3 for the Jul 2020 cohort in the Peel demo, known as "Demo". Demo has retained 55.6% of customers and 42.19% of customers in that cohort have made 2 or more purchases by month 3. If customer come back in Month 6 and repurchase that 55.6% will increase because it means that more customers were retained at month 3 also since they came back after (in month 6) to repurchase. The retention numbers can increase to 100% to the left anytime someone comes back and repurchases because it means that you never churned those customers.

Repurchase Rate will tell you that by month 6, 52.7% of you cohort has made 2+ purchases by that point. And then in month 7 - 56.22% made a repurchase. Repurchase rate numbers increase to the right since its looking for how long does it take for them to come back and make another purchase.

The more repurchases all the customers create will increase these numbers. Goal is to have higher percentages for both as close to 100% (& the left of the chart as purple/pink as possible). :)

Check out this block this blog post to get more examples of what you can do with the Repurchase Rate & Retention Rate knowledge.

Updated 6 months ago