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Understanding New Customers
Attracting new customers is the first step to gaining traction for your business. The next? Bring back repeat customers and keep them coming back for more!
At Tydo, we tend to look at new customers through the lens of cohorts (which means we are looking at first-time customers in a given month).
Why is this a metric worth keeping?
It’s helpful to understand (and see) customer behavior and purchasing patterns as well as the costs associated with acquiring new customers. With rising customer acquisition costs (CACs), going after new customers can be expensive, which is why it’s also important to focus your attention on retaining loyal customers. Finding the balance between both is key.
How to calculate first-time customers
New customers = the number of first-time customers who purchase from your Shopify store within a month.
Data source: Shopify
Example
Mary made her first purchase (a new bike) from Wheel & Sprocket in July 2021.
In that case, Mary is considered a new customer (or first-time customer) in July 2021.
Takeaway
New customers are like the new members of a gym who start on May 1st.
Getting customers in the door, especially almost halfway through the year, isn’t enough—even though it’s the hardest part. Retaining customers is equally important. Some of the best ways to do that are by offering incentives (such as a loyalty program), providing a one-time discount or coupon, and creating a positive shopping experience.
Take a look at the data and ask questions like:
- What new products are first-time customers buying?
- Which channels are they coming from?
Analyzing these metrics helps you make informed decisions about acquiring new customers in the future and maintaining customer satisfaction. The more new customers you bring to your store, the more focus you’ll want to apply toward retention strategies.
Ready to level up your learning?
Read more about First-time Customers
Understanding New vs. Returning Customers
What’s the difference between new versus returning customers?
The difference between the two is simple.
New customers (which we also refer to as first-time customers) are those who place their first order with your online store. Returning customers are those who have already placed an order in the past and are coming back to make a subsequent purchase.
Think of it like this:
New customers = acquisition
Returning customers = retention
Should you focus on new or returning customers?
It is important to find a balance between acquiring new customers and retaining them for future purchases.
Business owners always want to get in front of new shoppers to expand brand awareness and supercharge growth, but they also need to strengthen and develop relationships through customer retention strategies and build loyalty.
If you’re too focused on one over the other, your brand will grow stagnant over time.
How to attract and retain new customers
Take a look at product performance
Which products are bringing new customers to your website? Which products are new customers buying? Is there a product that’s doing all the heavy lifting in attracting new shoppers?
Monitoring product performance gives you insight into which products are acquiring new customers and which ones are helping with retention. For example, the Stanley ThirstQuencher went viral on TikTok and drove so many sales that the product sold out. Before this virality, Stanley was a relatively low-key brand. They didn’t have a big-name following, but this particular product drove new customer sales.
While the ThirstQuencer helps acquire new customers, other products might work better for retention and appeal to current customers, such as Quencher accessories or other drinkware.
Incorporate social proof into your landing pages and product detail pages (PDPs)
Adding customer reviews and testimonials to landing pages and PDPs are a helpful way to encourage new customers to purchase and enhance the overall customer experience. When consumers shop, they look for recommendations and reviews. This type of social proof helps them make smarter purchasing decisions.
User-generated content (UGC) is another way to highlight products for new customers and motivate them to make their first purchase.
Erin Falter, director of marketing at Tydo and ecommerce consultant, recommends making two lists. One list highlights all the reasons why a customer should buy from you, and the other list focuses on all the reasons why a customer wouldn’t.
Incorporate all those key data points into your landing page. The copy should highlight why customers need your product and what you do to alleviate any common concerns or questions they might have before purchasing.
Landing pages provide another bonus: they reduce acquisition costs!
Create a post-purchase email flow
Use post-purchase emails to connect with new customers and set the foundation for customer loyalty. Klaviyo is an excellent source for learning how to drive more engagement, revenue, and loyalty through post-purchase emails.
Be sure to focus on education in your post-purchase email flow. It’s a great time to educate your customers on how to use your products and how to take care of them. Plus, you can use this email flow to ask for customer reviews and referrals, too, which will help with future acquisition efforts.
What are the best channels to acquire new customers?
Paid advertising
Paid channels include everything from out-of-home (OOH) to podcasts, Meta, television, and more. Regardless of which platform you use to acquire new customers for your ecommerce business, it’s essential to keep up with changes as these platforms are constantly evolving.
Successful ads should answer your customers' questions. Nik Sharma, founder of Sharma Brands, has five questions every brand should answer in their landing pages and ads to make a good first impression.
Not sure where to run paid ads? Whether it’s through podcast platforms or social, it needs to be relevant for your audience.
Organic social
Kendall Dickieson, a social media strategist, says brand marketing isn’t dead.
A strong organic social strategy is helpful as it helps new customers discover your brand. Plus, these channels help build community and loyalty. Two brands with strong organic social strategies to watch are Graza and Seed.
Influencers and user-generated content (UGC)
A strong influencer strategy plays a powerful role in acquiring new customers. And it doesn’t have to be done through Instagram anymore. You can use other platforms like TikTok and YouTube to drive brand awareness.
Connect with influencers—both with big and small followings—who create content in new, innovative ways.
Social media strategist Kendall Dickieson approaches influencers with a personalized message from the brand account. “If you have a good product, people will naturally share it the minute they get it, whether it’s the unboxing experience or a unique recipe.”
Search engine optimization (SEO)
Tried and true, SEO is still an effective way to get your brand name out there and reach new customers.
Whether you’re new to SEO or want to brush up on updated practices, Shopify’s Ultimate Beginner’s Guide to Ecommerce SEO is a valuable resource. Choosing the right keywords for your store, organizing your website for a better ranking in search, and optimizing product description pages are just a few ways to boost awareness.
Blogs are key, too! In addition to being a valuable SEO tool and generating traffic to your website, they connect new and returning customers to your brand and products. They add value, build community, and help with storytelling. The cookware brand Great Jones has an excellent blog, where they feature recipes, product highlights, and more.
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