A balanced mix of these customer types ensures immediate sales and long-term profitability. But how do you determine a quality mix ratio, track this metric, and integrate it into your affiliate marketing strategy?
What is a Quality New vs Returning Customers Mix Ratio?
The ideal new customers vs. returning customer ratio will vary by industry, product type, and business goals. However, many direct-to-consumer (DTC) e-commerce brands aim for a mix where new customers account for 60-70% of sales while returning customers make up 30-40%.
New customers bring fresh revenue streams and expand your market share, while loyal, returning customers contribute higher lifetime value (LTV) and consistent revenue streams. Industry benchmarks suggest that a repeat customer rate between 20% and 40% is considered healthy for most businesses (smartbugmedia.com). A study analyzing 65 direct-to-consumer (DTC) brands found an average retention rate of 28.2%, indicating that approximately 28% of customers placed more than one order (metrilo.com).
Why The New vs Returning Customers Balance Matters
Customer Acquisition Costs (CAC): Acquiring new customers can cost significantly more than retaining existing ones. A healthy mix ensures you’re not overspending on acquisition while maintaining growth.
Lifetime Value (LTV): Returning customers typically have a higher LTV because they’re more likely to make repeat purchases and respond positively to upsell and cross-sell opportunities.
Brand Equity: Encouraging a strong base of returning customers builds brand loyalty and advocacy, which can attract more new customers organically.
How to Track New vs. Returning Customers
Tracking new and returning customers involves analyzing customer data from your e-commerce platform. Here are the key tools and methods to consider:
Google Analytics:
Navigate to “Audience”> “Behavior”> “New vs. Returning.”
This report shows the percentage of sessions from new vs returning customers and metrics like bounce rate, average session duration, and conversion rate.
CRM Platforms:
Tools like HubSpot or Salesforce can segment customers by their purchase history, helping you identify patterns in new and returning customers.
Affiliate Network Reporting:
Affiliate networks and platforms like ShareASale, Refersion, Awin, and Impact often provide insights into customer behaviour attributed to affiliate sales including new vs returning customers.
Applying This Metric to Your Affiliate Program
To leverage the new vs. returning customer ratio in your affiliate program, you need to design strategies that address both customer types:
New Customer Acquisition Strategies:
Offer exclusive welcome discounts through your affiliate partners to incentivize first-time buyers.
Partner with affiliates who focus on discovery channels, such as bloggers, influencers, and deal sites.
Example: A coupon affiliate offering a “10% off your first order” deal.
Returning Customer Retention Strategies:
Collaborate with loyalty affiliates that reward customers for repeat purchases.
Develop a tiered commission structure, offering higher payouts for affiliates who drive returning customers. Use remarketing-focused partners, such as retargeting ads, to re-engage customers who have already purchased.
Customized Reporting for Affiliates:
Share performance data with affiliates, highlighting the proportion of new vs. returning customers they drive. This transparency can motivate affiliates to optimize their strategies.
Set Clear Goals:
Define KPIs for your program, such as a specific percentage increase in new customers or a higher retention rate among returning customers.
A well-rounded affiliate program doesn’t solely focus on acquiring new customers or retaining existing ones—it strikes a balance. By monitoring your new vs. returning customer affiliate program ratio and tailoring your affiliate strategy accordingly, you can ensure sustainable growth for your DTC brand. Leverage tools like Google Analytics and CRM platforms to track customer behaviour and collaborate with a diverse range of affiliate partners to hit your goals.
