Purchase Frequency: Formula and How to Track It
By Alva Chew · Updated
Definition Purchase frequency is the average number of purchases each customer makes in a set period. Divide total orders by the number of unique customers who bought. A café with 2,400 orders from 600 customers in a quarter has a purchase frequency of 4. A points program ties each order to a member, so you can measure it.
What is purchase frequency?
Purchase frequency is the average number of times a customer buys from you in a chosen period. It is usually quoted per month, quarter or year. A café may see 4 orders per customer a quarter, while a restaurant may see 1.5.
It sits alongside average order value as one of the two numbers that set how much a customer spends with you over time.
How do you calculate purchase frequency?
Formula: total orders in the period ÷ unique customers who bought in the period.
| Item | Illustrative number |
|---|---|
| Orders this quarter | 2,400 |
| Unique customers who bought | 600 |
| Purchase frequency | 2,400 ÷ 600 = 4 orders per customer |
These numbers are made up to show the arithmetic. Count a customer once in the denominator however many times they bought, and count every order in the numerator.
How does it connect to customer value?
Multiply purchase frequency by average order value to get spend per customer in the period. With the 4 orders above and an average order of US$8, each customer spends about US$32 a quarter. Extend that over how long customers stay and you have the basis of customer lifetime value.
A small rise in frequency moves the total as much as a small rise in basket size, and it often costs less to ask someone to come in once more than to ask them to spend more each time.
How often do people buy food away from home?
The US Bureau of Labor Statistics published weekly reporting rates in its Consumer Expenditure survey. They show how different the baseline is by meal.
| Meal away from home | Share of US consumer units reporting spend in a given week, 2018 |
|---|---|
| Lunch | 53% |
| Dinner | 50% |
| Snacks and nonalcoholic beverages | 35% |
| Breakfast and brunch | 30% |
Source: BLS Spotlight on Statistics, “Meal Appeal”, April 2020, US consumer units (similar to households), 2018 data. The same report put average spending on food away from home at $3,459 a year, about $67 a week.
These are household shares, not your customers’ visit counts. They show that even for lunch, only about half of households buy in a given week. Your own frequency figure is the useful one.
Why is it hard to measure without a program?
If a customer pays with cash or a different card each time, you cannot tell whether Tuesday’s buyer is last month’s buyer. You can count orders, but not customers, so the division fails. Purchase frequency needs an identifier that stays with the person.
A loyalty program supplies one. Each member has an account, so each purchase is tied to a person. The figure then covers members only, and members tend to be your keenest customers. Say so when you report it.
How do you raise purchase frequency?
Give customers a reason to come back sooner that they understand without reading rules. A points-based loyalty program does this with a balance that grows with each purchase. Customers already understand spending money and earning points, which is why points avoid the extra rules of stamps, tiers or games.
Test the effect instead of assuming it. Compare members’ frequency before and after they joined, and watch whether members redeem. The repeat purchase rate is a good companion measure, and how to tell if your loyalty program is working covers the full set.
Tracking it with Gimify
Gimify keeps one points balance per member across every outlet, so a member who visits two branches keeps one balance rather than two. The free plan covers one outlet with unlimited members.
Questions owners ask
How do I calculate purchase frequency?
Divide the total number of orders in a period by the number of unique customers who placed them. With 2,400 orders from 600 customers in a quarter, purchase frequency is 2,400 / 600 = 4 orders per customer.
Is purchase frequency the same as repeat purchase rate?
No. Repeat purchase rate is a percentage of customers who bought more than once. Purchase frequency is an average number of orders per customer, and it counts every order, including a customer's tenth.
What is a good purchase frequency?
It depends on what you sell. People buy lunch far more often than they book a haircut, so outside benchmarks say little. Measure your own figure for a few periods and judge changes against that baseline.
Why do I need customer accounts to measure it?
A till records sales, not people. To divide orders by customers you need to know which orders came from the same person, and a loyalty member account does that for members.
How can I raise purchase frequency?
Give customers a reason to return that they understand at once, such as points that grow with each purchase and can be redeemed at the counter. Test the effect by comparing members before and after joining.
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