New vs Returning Customers

Model Scenario

In this report, we want to divide customers into returning and new customers (this is the most fundamental type of customer segmentation). The new customers have made only one purchase from your business, while the returning ones have made more than one.

New vs Returning Customers

Let’s go through their basic characteristics.

New customers are:

• forming the foundation of your customer base

• telling you if your marketing campaigns are working (improving current offerings, what to add to your repertoire of products or services)

while returning customers are:

• giving you feedback on your business (if you have a high number of returning customers it suggests that customers are finding value in your products or service)

• saving you a lot of time, effort, and money.

Let's go through the New vs returning customer analysis inside Graphite. The dataset on which you will run your model must contain a time-related column.

Since the dataset contains data for a certain period, it's important to choose the aggregation level.

For example, if weekly aggregation is selected, Graphite will generate a new vs returning customers dataset with a weekly frequency.

It is necessary to contain data such as Customer ID

Additionally, if you want, you can choose the Monetary (amount spent) variable.

With Graphite, compare absolute figures and percentages, and learn how many customers you are currently retaining on a daily, weekly, or monthly basis.

Model Results

The model results consist of 4 tabs: New vs Returning, Retention %, Revenue New vs Returning, and Details Tab.

New vs Returning

Depending on the aggregation level, you can see the number of distinct and returning customers detected in the period on the New vs Returning Tab.

Chart showing New and Returning customers in a period in a monthly representation

For example, in December 2020, there were a total of 2.88k customers, of which 1.84K were new and 1.05K returning. You can also choose a daily representation that is more precise.

Chart showing New and Returning customers in a period in a daily representation

Retention %

If you are interested in retention, the percentage of your returning customers, through a period, use the Retention % Tab.

Chart showing the percentage of returning customers in a period in a monthly representation

Revenue New vs Returning

The results in the Revenue New vs Returning Tab depend on the Model Scenario: if you have selected a monetary variable in the Model Scenario, you can observe her behavior, depending on the new and returning customers.

Chart showing the revenue spent depending if they are new customers or not in a period in a monthly representation

Details

Last but not least, on the Details Tab, you can find a detailed table where you can see all relevant values which were used for the above results.

Details tab