New vs Returning Users – How to find out who converts better
Do you know which of your clients are generating the most revenue for your business?
Are new customers spending more than returning visitors?
This article will answer both of these questions and I assure you that the findings you are going to make will most certainly amaze you.
How to find out who converts better
The fastest way to see how many returning customers your website has is to go to the Audience Overview report. In the right part of the report you will see a pie chart divided in 2 sections, the blue one represents New Users while the green one represents your Returning Customers.
For this example I’ll use the Google Merchandise Store’s data from 1st of July 2019 to 31st of July 2019.
Before you can start the analysis you will have to create 2 user segments or just pick the ones already created by the Analytics team: New Users and Returning Users.
Note: Deselect the All users segment for easier data visualization.
This is how the report should look like now. The pie chart has been divided into 2 separate charts, each one containing a user category.
Next step is to go to the Conversions -> Ecommerce -> Overview report
With the segments applied you will be able to see a comparison between new vs returning users.
In this example the Average Order Value of returning customers is greater by 17.42%, or $10.1 more per order. Their conversion rate is also almost 30% higher than that of new users.
Since this website is visited by a lot of people that are not interested in their products mainly, their conversion rate is really small, but if you have an ecommerce website, your numbers should vary by more than that.
Why should I care about new vs returning users?
Returning users are by definition people that have already visited your website and that have had at least one contact with your store before. These people might’ve actually purchased something from you before.
Generating new traffic to your website is important, but usually the cost to do this doesn’t have such a good ROI.
Targeting your returning customers and adding special promotions designed specifically for them can be, maybe, the greatest improvement you can do on your online store.
In many cases, returning customers are responsible for over 60% of the revenue generated, while counting for just 20% of the traffic. This segment is a gold mine and you should dig into it, otherwise you will be leaving a lot of money on the table.
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