To calculate repeat purchase rate, divide the number of bills in a month by the number of distinct customers. The result tells you how often one customer buys, and it sets your stamp count, your notification timing and your reward size — so it is the first thing to work out.
One number that governs every decision you make
Most reward-programme failures are not failures of generosity or design; they are failures to look at this figure. A merchant who sets ten stamps for a customer who visits once a month has designed a cycle that takes ten months, and nobody's interest survives that. The generosity was fine. The arithmetic never happened.
The formula is one line: bills in the month ÷ distinct customers in the month. Note the word distinct: someone who came eight times counts once in the denominator and eight times in the numerator, and that asymmetry is precisely what makes the number useful.
| Trade | Bills | Customers | Purchases each |
|---|---|---|---|
| Neighbourhood cafe | 3,240 | 810 | 4.0 a month |
| Family restaurant | 1,150 | 760 | 1.5 a month |
| Barbershop | 620 | 410 | 1.5 a month |
Notice the restaurant and the barbershop landed on the same figure despite having nothing else in common. That is not a flaw in the measure, it is the point of it: it describes rhythm rather than trade, and rhythm is what a programme has to be built around.
From the figure to your stamp count
The working rule: pick a stamp count that completes a cycle in three to six weeks. Under three weeks and the reward feels cheap to the customer while costing you dearly. Over six and it feels remote, so they stop trying before they arrive.
| Visits a month | Sensible stamp count | Completes in |
|---|---|---|
| 8 or more | 8 to 9 | about 4 weeks |
| 4 to 6 | 5 to 6 | about 5 weeks |
| 2 to 3 | 3 to 4 | about 6 weeks |
| Once | Stamps do not fit | Consider points instead |
That last row matters most. If your customer comes once a month there is no stamp count that works: even three stamps means three months, which is longer than anyone remembers a reward programme. Those are points or cashback customers, not stamp customers.
And from the figure to notification timing
The natural gap between two visits is thirty divided by your frequency. A customer visiting four times a month has a natural gap of seven and a half days. So when do you send a reminder? When the gap passes double the natural one — fifteen days of absence, not a month.
That rule alone settles the biggest argument about notifications: how often should I send? The answer is that you do not send on a fixed schedule at all — you send to each customer when their own rhythm slips. Two customers in the same shop deserve reminders on two different days.
Four ways to measure it wrong
- Measuring the first month after launch Every customer is new, so frequency looks low and means nothing. Wait three months before trusting the figure.
- Merging branches A mall branch and a residential one have completely different rhythms, and the average between them describes neither.
- Ignoring seasonality Ramadan and the school holidays invert the rhythm entirely. Measure an ordinary month, or compare like for like against last year.
- Stopping at the average An average of 4 could mean four each, or two people visiting twenty times while a hundred visit once. Split the cohorts before building on it.
Common questions
How does this differ from the customer return rate?
The return rate measures how many people come back; purchase frequency measures how often the returners return. The first describes the width of your base, the second its depth. A shop with a low return rate and high frequency depends on a devoted few, which is profitable and fragile at the same time.
Is a higher number always better?
Not necessarily. High frequency on a small bill can simply mean crowding without profit. The figure acquires meaning once you multiply it by your average bill and your margin — only then do you know whether the fast rhythm is serving you or exhausting your staff for nothing.
How do I raise it?
By shortening the gap between two visits rather than attracting new people. A clear reason to come back now — a balance one stamp short, an item available only this week — moves the rhythm far more than any general awareness campaign, because it speaks to people who already know you.