Graphite Note > FAQ > Models – Graphite ML Templates > Advanced statistical models > New vs Returning Customers Model - Model Scenario

New vs Returning Customers Model - Model Scenario

In this report, we want to divide customers into returning and new customers (this is the most fundamental type of customer segmentation). The new customers have made only one purchase from your business, while the returning ones have made more than one. Let’s go through their basic characteristics.

New customers are

  • forming the foundation of your customer base
  • telling you if your marketing campaigns are working (improving current offering, what to add to your repertoire of products or services)

while returning customers are

  • giving you a feedback on your business (if you have a high number of returning customers it suggests that customers are finding a value in your products or service)
  • saving you a lot of time, effort, and money.

Let's go through the New vs returning customer analysis inside Graphite. The dataset on which you will run your model must contain a time-related column. Since the dataset contains data for a certain period of time, it's important to choose the aggregation level. For example, if weekly aggregation is selected, Graphite will generate a new vs returning customers dataset with a weekly frequency. It is necessary to contain data such as Customer ID and Order ID. Additionally, if you want, you can choose the Monetary (amount spent) variable.

With Graphite, compare absolute figures and percentages, learn how many customers you are currently retaining on a daily, weekly, or monthly basis. In the next post, the focus will be on the Model Results. Stay tuned! 🙂

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