Retention Rate vs Repeat Purchase Rate vs Churn
Retention rate measures who stays over a period, repeat purchase rate measures who ever buys twice, and churn rate measures who leaves. They answer different questions, and using the wrong one produces confident, wrong decisions. For most non-subscription DTC brands, repeat purchase rate is the workhorse. Here are the formulas, a worked example, and the cadence for each.
Retention rate. (Customers at period end − new customers added) ÷ customers at period start × 100. It is a period metric — “of January’s customers, how many were still active in June?” — and it requires defining “active,” which is exactly the trap: in a store bought from every eight months, a 90-day activity window manufactures churn that is not real. Match the window to your natural purchase cycle or the number lies to you politely, forever.
Repeat purchase rate. Customers with 2+ orders ÷ total customers × 100. No activity definition needed, which is why it travels so well across categories. It answers the existential DTC question — does anyone come back? — and it feeds directly into lifetime value. Tactics that move it live in customer retention strategies.
Churn rate. The share of subscribers lost in a period — the inverse of retention, and the native metric for subscriptions, where “active” is unambiguous: you are subscribed or you are not. If you run a subscription program, churn is your primary number, and its causes deserve their own analysis; we cataloged them in why subscribers cancel.
One store, all three numbers. Suppose a store has 10,000 total customers, of whom 2,800 have ordered at least twice: repeat purchase rate 28% — healthy for most DTC categories. Its subscription program started the quarter with 1,000 subscribers, added 300, and ended with 1,150: churn is (1,000 + 300 − 1,150) ÷ 1,000 = 15% for the quarter, a number the topline growth completely hides. And a 12-month retention view of January’s 500 first-time buyers might show 180 still active — 36% — provided “active” was defined to fit the purchase cycle. Three metrics, three different diagnoses, one store: the repeat rate says the flows work, the churn says the subscription offer leaks, the cohort view says the winback window opens around month eight.
Where to pull each number without lying to yourself. Repeat purchase rate: your commerce platform’s cohort or returning-customer reports, cross-checked against a raw order export once a quarter — dashboard definitions of “returning” vary and sometimes count within-session reorders. Churn: your subscription platform’s cohort view, not its topline subscriber count, because growth masks leakage. Retention by cohort: a spreadsheet built from order data, since most native dashboards will not let you set the activity window yourself — and the window is the whole game. Treat platform-attributed revenue as a starting claim rather than a verdict: reconcile it against store totals monthly, dedupe email against SMS, and document the windows. The instrumentation takes an afternoon to set up. The alternative is metrics that drift apart quietly until two dashboards disagree in front of your CFO.
Which to track, at what cadence. One-off purchase catalog: repeat purchase rate, monthly, cohort-based. Subscription or membership: churn weekly, retention curves by cohort monthly. Hybrid: both, reported separately — blending them averages away the signal, and the averaged number will look fine while one side quietly deteriorates. Quarterly, convert whichever rate you track into dollars: a two-point repeat-rate lift is abstract until the customer lifetime value calculator prices it against your AOV and margin — that conversion is what turns a dashboard into a budget argument.
The uncomfortable part. Whichever metric you pick, it moves through the same machinery — flows, segmentation, loyalty mechanics, subscription saves. Tracking is diagnosis; the program is the cure. If the numbers say the program is missing, our comparison of the top retention marketing agencies is the practical next read — including what each shop actually staffs and what the retainers run.
