Understanding the difference between first-time and returning customers is crucial to your business’s growth. However, there are many ways to calculate and interpret returning customers, which can be confusing at first.
This guide will show you how to easily view and comprehend your returning customers and compare them with your first-time customers using the Shopify app, By the Numbers.
Defining First-Time and Returning Customers
To begin with, let’s define the terms ‘First-Time Customer’ and ‘Returning Customer’ so that we have a clear understanding of how we are calculating things:
First-Time Customer: This is a customer who has never placed an order previously.
Returning Customer: This is a customer who has placed an order within the selected time-frame and whose order history includes at least one order.
Getting Started with Analyzing First-Time and Returning Customers
If you haven’t installed By the Numbers yet, we recommend you do so. It offers a free 14-day trial, and you don’t need a credit card to get started. Once you have installed it, select the ‘Reports’ tab, and look for a report called ‘First-Time vs Returning Customer Sales.’ You should see something like this:
The above chart shows:
- The number of First-time Customers in the Group-by period (months).
- The number of Returning Customers calculated within each month.
- The number of Orders, Average Order Value and the Sales numbers of these groups including Discounts, Shipping, Tax and Total returns.
Changing the group-by period can provide different insights into customer retention versus acquisition. You can set the group-by period to Hour, Day, Week, Month, Quarter, or Year, depending on the level of granularity required. This can help you determine if a particular product offering or marketing campaign resulted in increased customer acquisition or retention.
For a more detailed explanation, you can refer to the documentation in our Help Center.