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Returning Customer MER (Gross Sales) is your total ad spend as a percentage of repeat-order sales at list price. It tells you how much of your ad budget your existing customers’ purchases could cover, before loyalty discounts and refunds.

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Formula

RC MER (Gross) = ( Total Ad Spend ÷ Returning Customer Gross Revenue ) × 100

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Formula Components

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How it works

An order is a returning-customer order when its Shopify customer already has an earlier non-cancelled order in your store. Every order after a customer’s first one counts, whether it came from an ad, an email or a direct visit. Orders with no Shopify customer attached are left out of both the new and returning segments. The numerator isn’t retention spend. It’s your entire synced ad budget, the same number used by MER and NC MER (Gross). Email and SMS costs aren’t ad spend, so they never appear here. So this metric doesn’t measure what retention costs. It measures how big your repeat-sales base is relative to what you spend on ads.

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Example

A coffee subscription brand spends $36,000 on ads in March. All three rows use the same $36,000. They combine through their reciprocals: 100 ÷ 20.93 + 100 ÷ 46.15 = 4.778 + 2.167 = 6.945, and 100 ÷ 6.945 = 14.40%. That only holds when every order has a Shopify customer. In April the brand pauses a retargeting campaign and spend drops to $31,000. Repeat sales hold at $171,000, so RC MER (Gross) falls to 18.13%. Those customers kept buying without the extra ads, a hint the retargeting was reaching people who’d have bought anyway.

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How to interpret it

  • Falling RC MER (Gross) with flat spend means repeat sales are growing. That lowers overall MER even when acquisition is unchanged.
  • Rising RC MER (Gross) with flat spend means repeat sales fell. Check Returning Customers to see if fewer people came back or they bought less.
  • RC MER is lower than NC MER whenever repeat sales exceed first-order sales. Same numerator, bigger denominator. It isn’t evidence that returning customers are cheaper to reach.
  • Compare gross and net to see the cost of loyalty discounts. RC MER (Net) shrinks the denominator by repeat-order discounts and refunds.

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FAQ

No. Upstack divides all synced ad spend by repeat-order sales. It doesn’t separate retargeting or retention campaigns from prospecting.
It checks the Shopify customer on the order. If that customer has an earlier non-cancelled order in your store, the new order is a returning-customer order. A cancelled first order doesn’t count, so the customer’s next order is treated as their first.
Loyalty programs and subscriber discounts lower net sales. Gross sales let you compare periods with different discount levels.
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