🤔 What is the New vs. Returning Customers Report?
Customer acquisition and retention are two basic marketing strategies an e-commerce business can’t spare. Mutually impactful, they have a different effect and require a different approach. Retaining an existing customer can cost five times less than attracting a new one. Moreover, only a 5% increase in the customer retention rate can augment revenue up to 25%. However, you can’t go without new customers who are like fuel for growth.
So, how to define where more effort is needed now: retention or acquisition? The New vs. Returning Customers report at Synder will help you decide what to focus on at the moment.
🔎 What does the New vs. Returning Customers Report tell us?
While the difference between new and returning customers is pretty guessable, let’s still define both to ensure we’re on the same page.
New customers are those customers who made their first purchase within a selected period. Returning customers are those who have more than one purchase within the same period.
The New vs. Returning Customers Report allows you to make a comparative analysis of new and returning customers within a given period and shows you a proportion in a bar. Apart from the ratio of your new and returning buyers, you can also see the percentage of new/returning customers and your gross revenue from each group.
You can choose between seeing your numbers in general or applying filters for a more granular view. Thus, you can analyze the data by sales channel, country, region, or payment gateway to see where exactly to direct your efforts and ensure the maximum efficiency of your marketing activities.
📈 What can be done to grow sales based on these numbers?
Long story short, there’s no one-size-fits-all answer. It greatly depends on the landscape, like your industry, niche, etc. In e-commerce, you can feel good if you have 20-30% of returning customers.
Bearing this in mind, you can shift your focus to retention or acquisition based on your current figures.
Having about 50% returning customers, you can think of growing your customer base and putting more effort into attracting new buyers. At this point, you can think about:
- Launching ad campaigns on social media. You can analyze your top-performing customers and create lookalike audiences for more efficient targeting.
- Offering coupons of promo codes for first-time buyers. Look at your top-performing products to understand which products will most likely be of interest and tempt potential buyers with a nice discount.
- Working on your product pages to make them more visible in search engines. Use SEO tools to analyze and optimize your product pages to increase their visibility across various search engines.
Less than 20-25% of returning customers means that you might need to work with your existing customers to encourage them to buy more from you.
- Launch a win-back outreach campaign. You can use the Time Between Purchases Report to define the right moment to reach out to your one-time buyers with personalized offers.
- Start a customer loyalty campaign. Think of some incentives for your loyal customers, like bonuses or points they can earn for buying from you and spend on their future purchases.
This is definitely not an exhaustive list of retention and acquisition techniques you can use in your strategy (we’ll be covering more in our blog posts), but this should give you a general idea.
The New vs. Returning Customers is one of the reports that help you analyze your customers and improve your targeting. Combine it with more customer reports, such as Return Customer Rate or Time Between Purchases, to have more insights into your customers’ behavior and ensure the effectiveness of your marketing efforts.