Repeat customers are always more profitable than new customers. Why? A variety of studies show that repeat customers spend more money and more often. About 40% of an eCommerce store’s revenue comes from a mere 8% of its customers.

That’s right – 40% of an eCommerce store’s revenue comes from repeat customers, who only make up 8% of the total customer base. It’s essential that a business focuses on retaining these loyal customers in order to see profit increases without increasing expenses.

They may be relatively small in number, but repeat customers help drive the success and profitability of a business by continually shopping there, recommending the business to friends, spending more than new customers, and shopping at key times of the year.

Repeat customers spend more money

Repeat customers spend more money than new customers. They have a higher average order value than new customers, which increases with two factors: The number of purchases they’ve made with a company in the past and how long they’ve actively been a customer.

RJ Metrics found that a company’s top 10% of customers – their repeat customers – spend 3 times more per transaction than the other 90% of customers. The top 1% of repeat customers spend 5 times more per order than the other 99%.

And once a customer has been doing business with a company for 30 months, they spend around 67% more per order than their initial purchase total. Still not convinced?

…and they shop more often

After a customer buys from a company and has a good experience, they have a 27% chance of returning to shop at that store.

If that customer does return to shop at that store and ends up making a second and third purchase, they are then 54% more likely to make a fourth purchase. Their likelihood to return to purchase again only increases from there.

They have much higher conversion rates

Repeat customers also have higher conversion rates than new customers. The average conversion rate is roughly between 1% and 3% – not abysmal, but nothing to get excited about, either. But the average conversion rate for a repeat customer is, according to Marketing Metrics author Paul Farris, 60% to 70%!

Adobe commissioned a study and found that a repeat customer, one who has purchased from a store at least 2 times, is 9 times more likely to convert than a first-time customer. Repeat customers convert more often because they feel more comfortable with a business they’ve already purchased from.

They spend more at important times of the year

All customers spend a little more during the busy holiday season, but repeat customers really bring their A-game. Adobe’s study found that customers, on average, spend about 17% more per order than usual during the holiday season. Not bad, but repeat customers spend 25% more per order than usual during the holiday rush!

It’s easy to see why repeat customers are so important for a business to cultivate and support. They are the key to increasing profitability without proportionately increasing expenses. Treat your customers well, provide a great customer experience, and they’ll return to shop with you again and again.