How should repeat purchase be measured?
Group customers or orders by the month of the first observed purchase, then track repeat orders at consistent intervals. This avoids mixing older customers with more opportunity to repeat and newer customers with less elapsed time.
Build the cohort table
- First-purchase month, product, channel, and acquisition source where available.
- Customers or orders observed at each later time interval.
- Repeat rate, reorder timing, average order value, and product sequence.
- Discount, advertising, refund, and service cost tied to each stage.
- Cumulative contribution rather than revenue alone.
Separate natural replenishment from promotion effects
A coupon or event may pull a repeat order forward without increasing long-term demand. Compare cohorts and later periods to see whether customers continue purchasing after the incentive ends.
Use retention to set an acquisition limit
Estimate the contribution earned within a conservative payback window. Increase acquisition spending only when repeat economics are measured reliably and the business can fund the time between the first order and later profit.