Repeat Purchase Rate: The Metric That Matters More Than ROAS
Sean Clarke
By Jennifer Courtney - Strategic Specialist
You already paid to acquire the customer. What happens next might matter more than what it cost to get them.
I spend a lot of time looking at ecommerce data. And I can tell you that almost every founder knows their ROAS. They know what Meta did last month. They know whether CAC is up. They know when paid performance starts slipping because everyone starts talking about it immediately.
But ask, "What percentage of your first-time customers ever buy again?" That's usually a much harder question to answer. And I think that's a problem.
Especially once you're doing $250K, $500K, $1M a year and wondering why growth keeps getting more expensive. Because at some point, you cannot just keep feeding more people into the top of the funnel and calling that growth. You have to keep some of them.
The First Sale Is Not the Win
I think we give the first purchase way too much credit. Yes, it's important. Obviously. But there are a lot of reasons someone might buy from you once.
Maybe your ad was really good. Maybe the product looked interesting. Maybe an influencer they trust recommended it. Maybe you offered them 25% off. Maybe they needed a gift. Maybe they had two glasses of wine and Instagram got them at exactly the right moment.
Whatever. You got the order. The second order is where it gets interesting. Because now they know you. They've actually used the product. They've experienced the shipping. They've opened the package. They've decided whether what showed up at their door lived up to what they thought they were buying. And then they came back anyway.
That second purchase tells me a lot more about the health of a DTC business than one great acquisition campaign does.
This Is Where ROAS Can Get Misleading
Let's say you spend $10,000 on Meta and generate $30,000. Great. 3X ROAS. Now let's say almost every one of those customers buys once and disappears. Next month, you need to go find a whole new group of people. And pay Meta again. Then do it again the next month. You're not really building much of anything. You're renting customers.
Compare that with a brand spending the same $10,000 and generating $25,000 on the first purchase. Not quite as exciting on the acquisition report. But those customers come back. Some place a second order 45 days later. Some try another product. Some subscribe. Some eventually become customers who have ordered eight times. Now the math looks completely different.
This is why I get nervous when a brand tells me acquisition is "crushing it" and the only thing we're looking at is ROAS. I want to know what happened to those customers afterward.
I Learned This on the Brand Side
When I was helping scale a CPG brand, we grew DTC from roughly $10M to $30M in a year. And yes, conversion was a huge part of that.
We took site conversion from around 3% to 5.5%, and I will talk about conversion rate all day long because getting more value out of the traffic you already have is one of my favorite things to fix. But once you're operating at real volume, something becomes very obvious:
You can't just acquisition-hack your way through every problem. You can keep finding more people. You can keep improving ads. You can keep optimizing landing pages. But the economics become dramatically better when the person who bought one bottle comes back for another.
And then tries another flavor. And then buys a bundle. And then realizes she's somehow become the person with seven bottles sitting on her kitchen counter. That's a customer.
The first order was just an order. There's a difference.
So Why Aren't They Buying Again?
This is the question I wish more brands spent time on. Not: "What campaign should we send Thursday?"
Not: "Should we increase the discount?" Not even: "Should we launch a loyalty program?" Why aren't people coming back?
Sometimes it's actually pretty simple.
Maybe they don't know what to buy next. Maybe nobody showed them how to get the most out of the product they already bought. Maybe they liked it but forgot about you. Maybe the product lasts 60 days and you're asking them to replenish after 30. Maybe shipping makes a second small order feel ridiculous. Maybe your first-purchase discount attracted a ton of deal seekers who were never going to pay full price.
And yes, sometimes the uncomfortable answer is that they just didn't like the product enough to buy it again. That's important information too. A retention problem isn't always an email problem.
Look at How People Actually Buy Your Product
One of the first things I'd look at is the natural time between purchases. If you sell something consumable, you should know this.
Let's say the average customer reorders around day 45. Now we have something useful. What happens at day 30? Day 45? Day 60?
At what point does the likelihood of that customer ever coming back fall off dramatically? Because that should drive your marketing. Instead, I still open accounts and find win-back flows set to 180 days. Six months!
If someone normally needs your product every 45 days and you haven't heard from them in six months, we're not really "winning them back." We're performing a resurrection.
You should have noticed that customer was disappearing months ago. That's what I mean when I talk about using customer behavior instead of just sending more email. The data is already telling you when something is off.
And Please Stop Immediately Throwing Discounts at Them
This one drives me crazy.
Customer hasn't reordered? Here's 10% off.
Still hasn't reordered? 15%.
Still nothing? 20% AND FREE SHIPPING!
At some point you've taught the customer exactly what to do: Wait.
Discounts absolutely have a place. I'm not anti-discount. But a discount should be a lever, not the entire retention strategy. Before you give away margin, ask why the customer didn't purchase again.
Maybe she bought Product A and has no idea Product B is the logical next step. Tell her. Maybe there's a better way to use the product. Show her. Maybe people get dramatically better results when they use it consistently for 30 days. Explain that.
Maybe she should have reordered two weeks ago and genuinely forgot. Remind her.
Those are marketing problems. "Here's 20% off" is just the easiest answer.
Your Post-Purchase Flow Should Be Doing More Than Tracking a Box
This is another place where I see brands leave so much opportunity sitting there.
Customer buys. Order confirmed. Order shipped. Order delivered. "Please review your purchase." And we're done.
We spent all this money getting someone to trust us enough to purchase and then basically turned the relationship over to UPS. Post-purchase should be some of your best marketing.
If I just bought your product, I'm probably more interested in what you have to say right now than I was two weeks ago.
Tell me how to use it. Tell me what I should expect. Tell me the mistake everyone makes. Show me what other customers are doing with it. Help me actually get the result I bought the product for. Then, when the timing makes sense, show me what comes next.
That doesn't feel like being marketed to. It feels useful. And useful marketing sells really well.
Sometimes Your "Best" Acquisition Campaign Isn't Actually Your Best
This is where things get even more interesting.
Let's say Campaign A has a fantastic CAC. Campaign B costs 20% more to acquire a customer. Easy decision, right? Put more money into Campaign A. Maybe. But what happens if you look six months later and Campaign A customers almost never reorder while Campaign B customers are twice as likely to make a second and third purchase? Now which campaign was expensive?
This is the stuff I wish more founders looked at before making decisions based on whatever Meta says happened in the last seven days. The cheapest customer to acquire isn't necessarily the best customer to acquire. And your biggest first-order promotion may not be creating the customers you actually want.
I've seen brands get very excited about aggressive first-order offers because conversion jumps immediately. Of course it does. But if you need 40% off to convince someone to try the product and then they never buy it again at full price, we need to be honest about what happened.
You acquired a discounted transaction. Not necessarily a valuable customer.
I Would Start Really Simple
You do not need another dashboard.
If I took over a $500K DTC brand tomorrow, I would probably spend an afternoon trying to understand one thing: What happens between order one and order two?
I'd look at how many first-time buyers ever come back. How long it takes them. What they bought first. What they buy second. And where those customers originally came from. That's enough to find a lot of problems.
Maybe one hero product creates amazing first-time conversion but terrible retention. Maybe another product quietly produces your best long-term customers. Maybe people who buy bundles are far more likely to reorder. Maybe your TikTok customers behave completely differently from your Google customers. Maybe customers who make it to purchase #2 are extremely likely to make purchases #3 and #4.
Now we know where to focus. And that's much more useful to me than knowing last Tuesday's ROAS to two decimal places.
Subscription Isn't a Magic Fix Either
I also see brands notice weak repeat purchase and immediately jump to: "We need subscriptions." Maybe.
If people naturally need the product again every 30 or 60 days, subscription can be fantastic. It removes friction.But subscription doesn't make someone want a product they weren't going to buy again anyway.
If your retention isn't good, forcing recurring billing on top of it can just create a different problem: Skips. Cancellations. Refunds. Customer service tickets. People emailing you in all caps because they forgot they subscribed.
I would rather understand why people come back first. Then make subscription ridiculously easy for the people who already want to.
Repeat Purchase Rate Is Also Telling You Something About Your Product
This might be the most important part.
Marketers love believing everything is a marketing problem because marketing problems are fixable with marketing. Sometimes they're not. If thousands of people buy your product and almost nobody wants it twice, pay attention.
Maybe expectations don't match reality. Maybe the value isn't there. Maybe there's nowhere logical to go next in your assortment. Maybe you have a genuinely low-frequency product and need to build your business around that reality.
Or maybe the product just isn't creating enough love.
No Klaviyo flow fixes that. And that's okay. That's what the data is for.
What I Would Actually Do This Month
If you're somewhere between $250K and $1M and you've spent the last six months obsessing over acquisition, I wouldn't stop acquiring customers. I'd just spend some time looking behind you.
Pull your first-time customers from the last year. See how many purchased again.
Find the average time to purchase #2. Look at what your best repeat customers bought first.
Then go experience your own post-purchase journey. Actually read the emails. Would they make you more excited about the product you just bought?
Would they help you use it? Would they make the next purchase obvious? Or are you basically sending shipping notifications followed by promotions?
Start there. Because you probably don't need 15 new retention initiatives. You need to understand why someone buys once, why someone else buys six times and what happened differently between those two customers.
The Part I Think We Get Wrong About Growth
We talk about DTC growth like it's constantly about finding more people.
More traffic. More impressions. More clicks. More customers.
But the brands that become really good businesses eventually stop starting from zero every month.
Last month's customers help create this month's revenue. This month's customers become next quarter's repeat buyers. The customer base compounds. That's when growth starts feeling different.
So yes, keep watching ROAS. Keep watching CAC. Keep testing creative. I absolutely do.
But I'd add one more question to every monthly meeting:
Did more of our customers come back?
Because the first purchase tells me your marketing worked. The second purchase tells me you might actually be building something.
