A customer who comes back is worth their contribution per order times the number of orders they place. A new customer costs you something before they earn you anything: samples, discounts, ads, commissions. That is why, in a small food business, looking after the people who already buy usually pays better than chasing new ones. To know whether you are doing it, you need two numbers: what a repeat customer is worth, and how many of your customers repeat.
What a repeat customer is worth
The calculation is short:
customer value = contribution per order × number of orders
Contribution per order is what is left from the order after variable costs: ingredients, packaging, waste and any channel commission. If you have not worked it out yet, start with the contribution margin of your products.
Use contribution, not sales. A customer who spends $60 a month on a product that barely makes money is worth less than one who spends $30 on a product that keeps half.
What a new customer costs
Add up everything you spent on bringing in customers over a period and divide it by the number of new customers who arrived:
- Samples and tastings, at their variable cost.
- First-order discounts.
- Paid social ads.
- Market stall fees, if you were there mainly to get known.
That is your cost per new customer. If someone buys once and their first order earns less than that, you lost money bringing them in. You only get it back if they return.
How to measure how many come back
You do not need software. You need a list of who bought and when. If you take orders by message or through a simple online form, the record already exists; copy it into a spreadsheet with name, date and amount.
Once a month, work out:
repeat rate = last month's new customers who ordered again within four weeks ÷ last month's new customers
If 30 people ordered from you for the first time in March and 12 of them ordered again within four weeks, your repeat rate is 12 ÷ 30 = 40%. No benchmark fits every product; how often people eat granola is not how often they eat dinner. What matters is your own trend. It belongs on the short list in the numbers to check every week.
Why people come back, and why they stop
With food, most of the reasons are operational:
- It tastes the same every time. If the portions shrank or the sauce changed, people notice. Consistency comes first.
- Reordering is easy. One message, a clear menu, a payment link. Every extra step is a reason not to order.
- You remember them. A short message on menu day to the people who ordered last week. Not a stream of posts; one note when there is something to buy.
- It is there when they want it. If you sell out every week, customers get used to buying elsewhere.
People who stop buying rarely tell you. That is what the list is for: it shows you who has gone quiet, early enough to send a message.
What a loyalty reward really costs
"Every tenth order free" cards work when you cost them. A free item costs you its variable cost, not its price, as long as you have spare capacity to make it. If that item would otherwise have been sold, the real cost is the price you did not collect. The guide on what a discount really costs you walks through the full arithmetic for discounts and promotions.
Worked example: meal prep boxes
You sell meal prep boxes for weekly delivery. Price: $11.00 a box. Variable cost: $5.50 a box for ingredients, container, label and waste. Contribution: 11.00 − 5.50 = $5.50 a box. A typical order is 5 boxes: 5 × 5.50 = $27.50 contribution per order.
What a new customer costs. You offer 20% off the first order. On 5 boxes that is 5 × 11.00 × 0.20 = $11.00. The first order's contribution drops to 27.50 − 11.00 = $16.50.
Two customers who started the same week:
| Orders once | Orders weekly for 12 weeks | |
|---|---|---|
| Orders | 1 | 12 |
| First order (discounted) | $16.50 | $16.50 |
| Later orders | none | 11 × 27.50 = $302.50 |
| Total contribution | $16.50 | $319.00 |
The same discount brought in both. One customer left you $16.50; the other left you $319.00, nearly twenty times as much. The difference was not the offer; it was what happened after the first delivery.
The reward. You decide every tenth order gets one free box. Over ten orders a customer brings 10 × 27.50 = $275.00 in contribution. The free box costs you $5.50, which is 5.50 ÷ 275.00 = 2.0% of that. If it keeps a customer who was drifting away, it pays for itself many times over.
If you sell out every week, though, the free box is one you could have sold, and it costs you $11.00: 11.00 ÷ 275.00 = 4.0%. Still small, but double. Use the figure that matches your kitchen.
When not to chase repeat orders
Some customers only come back for a deal. If someone orders only when there is a promotion, their contribution per order is lower and deserves its own line. The same goes for regulars who need a special delivery far from your usual route: work out their contribution after the delivery cost. A frequent customer who always leaves little can be worth less than an occasional one who leaves a lot.
The guide on how to grow a small food business puts repeat business in order with the other ways to grow, and word of mouth and referrals shows how the customers who return are also the ones who bring others.
Do it with the calculator
Put your recipe into the food cost calculator to get the variable cost per unit. From there you have contribution per order, the base for every calculation in this guide.
Frequently asked questions
What is a good repeat rate for a food business?
There is no single number that fits everyone; it depends on what you sell and how often people eat it. Compare yourself with your own previous months. Rising is good; falling means something changed and is worth finding.
How often should I message customers?
When you have something useful to tell them: a bake day, a new menu, a restock. Around one useful message a week is usually plenty; more than that starts to feel like spam.
Should I give repeat customers a discount?
Only if you have done the maths. A standing discount cuts your contribution on every order. An occasional free item usually costs less, because a free item costs you its variable cost while a discount costs you price.
How do I know who has stopped buying?
Keep a customer list with the date of each person's last order. Once a month, look for anyone you have not seen in more than twice their usual gap between orders.