How much of my business is driven by return customers?Understanding the relative significance of return customers to your current revenue stream helps to frame how important they are to your business.

We found return customers account for 22.6% of a business’ revenue, and it comes as no surprise that they also only make up 11.6% of the customer base.

Questions for decision-making:

Are we attracting more or less return customers than the average for our industry?

If we are above or below the average, does this mean our loyalty programs are a success or failure?

Are we over- or under-investing in retention?

How much do return customers spend on any given order?Across all industries, we found that return customers spend 15% more than new customers on any given order.

This trend is most pronounced in the Health and Personal Care and Home Furnishing industries, where the relative difference is nearly 30% in each.

Questions for decision-making:

How do our return customers compare to new customers on a typical order?

Is our marketing team taking this into account when budgeting for acquisition and retention?

What is the average customer worth to my business?Over the course of a year, the average return customer spends over 120% more than new customers.

In 2015, the typical return customer spent a cumulative total of $86.16, more than double the $38.81 spent by new customers.

Questions for decision-making:

How much does the average return customer spend at our store over the course of a year?

How much can we expect in revenue from each new customer that converts to a return customer?

Is this worth the time and cost we would need to be or are currently devoting to loyalty programs and retention?

How do I attract customers back after their first purchase?One of the most common methods for converting a new customer into a return customer is through exclusive targeted discounts, typically distributed via email.

Return customers are far more likely to be offered or take advantage of discounts than new customers, particularly in the Health & Personal Care, Apparel & Accessories, and Home Furnishing industries.

Questions for decision-making:

What proportion of our new and return customers are taking advantage of discounts?

Are we over- or under-utilizing targeted discounts as a retention strategy?

About Stitch Labs & Our DataStitch is an online inventory control solution that simplifies multichannel retail business. It automatically syncs inventory, orders, and sales across channels, providing retailers with operational efficiencies and a holistic understanding of their businesses. With Stitch, retailers are able to save time, make better decisions, and grow.

In order to better understand the value of customer loyalty in eCommerce, we turned to our dataset and analyzed over 22 million orders made by roughly 20 million unique customers with over 2,400 online retailers.

Additional Suggested Reading2015 Ecommerce Buyer Behavior Report, RJMetricsA comprehensive year in review looking at customer lifetime value across key variables such as industry, region, and average spending level.

The consumer decision journey, MckinseyThis is an excellent resource for dissecting the customer decision-making process. Any business decision maker should find this helpful for thinking about how customer loyalty fits within their marketing strategy.

The Power of Habit, by Charles DuhiggEvery habit has three components: a cue, a routine, and a reward. Understanding these and how they work together can help retailers design effective programs that guide consumers along the path to habitually coming back to their brand.