New vs. Returning Customers

This metric is a cornerstone in understanding your audience’s behavior and loyalty, and simply put, it’s the comparison between customers who have only made one purchase (“new” customers) and those who have made more than one purchase (“returning” customers)

How to Measure New vs. Returning Customers 

Measuring this metric is all about keeping track of the number of people who are making their first purchase compared to those returning for another round of shopping. 

  1. Step One: Collect Customer Data: The first step in calculating this metric involves collecting customer data. This information often lives in your sales or CRM system.
  2. Step Two: Identify New Customers: New customers are typically those who have only made one purchase within a specified time frame.
  3. Step Three: Identify Returning Customers: Returning customers, on the other hand, have made multiple purchases within the same period.
  4. Step Four: Perform the Calculation: Finally, to get your metric, you simply divide the number of returning customers by the total number of customers.

It’s crucial to maintain a consistent time frame when analyzing this metric to ensure accurate results.

With a clear understanding of the proportion of new versus returning customers, you can grasp the effectiveness of your customer retention strategies. Plus, it gives you insights into how well your business is attracting new customers while keeping existing ones hooked. 

New vs. Returning Customers Calculator

The values you enter into this calculator are not saved or stored in any way.

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