Repeat Sales

What Are Repeat Sales?

Repeat sales are purchases that customers make to replace the same items or services that they had bought and consumed previously. Repeat sales are an example of brand loyalty. If a customer is happy with a particular brand of shampoo, for example, they may purchase the same product — or another related product of the same brand — when it's time to replace it. A repeat sale may also be called a "replacement sale" or "repurchase."

Understanding Repeat Sales

Repeat sales are similar to repeat purchases and are related to repeat customers. Repeat purchases may involve purchasing the same item from a different seller. Repeat customers are those who frequent the same seller and/or make repeat purchases of the same or brand-related items, creating a "halo effect."

A key tenet for a seller in garnering repeat sales is to take better care of customers than does the competition. As such, learning how to secure repeat sales and repeat purchases is a critical aspect of a salesperson's training. Making repeat sales is a significant achievement, either as an individual salesperson relying on commissions and incentives or as a corporation looking to increase profits.

Many businesses focus the bulk of their time and budget on acquiring new customers. Studies show that — because of marketing and advertising expenses — it costs companies more money to attract new customers than to bring back existing customers. So, if a business needs to increase revenue, it might be wise to look first at ways it could cater to it's existing customers.

When marketing to a prospective customer, you have only a 13% chance of persuading them to make a purchase; with repeat customers, however, there's a 60%-to-70% chance that they will buy.

How Repeat Customers Equal Repeat Sales

Concentrating on customer retention and encouraging repeat customers creates long-lasting, profitable relationships, which in turn can boost sales. Here's why:

Special Considerations

Measuring Repeat Sales

A business or individual can measure repeat sales and repeat purchases by calculating a repeat purchase rate, which is the percentage of a company or brand's customers who return to make another purchase. The repeat purchase rare may also be called a "reorder rate," a "repeat-customer rate," or a "customer-retention rate." The goal is to gain increasingly higher rates.

Repeat Sales and e-Commerce

Each industry, retailer, or brand has a standard repeat sales or purchase rate. A good benchmark for a business is to have about one-quarter of customers return to repeat a sale. For e-commerce companies, however, repeat sales account for as much as 50% of total sales. It is challenging for Internet companies to earn these customers, as shoppers can do their own research and go anywhere online to get what they want.

However, there are a number of strategies that e-commerce companies may employ to help ensure that new customers become repeat customers: