The importance of New Customer growth for ecommerce brands

How important do you think new customer growth is for an ecommerce brand? Find out here

In order for ecommerce brands to thrive in the long run, they need a continuous flow of new customers - this is a commonly known fact. New customer growth fuels revenue expansion and ensures market penetration and long-term sustainability.

Simply put - if you can't acquire new customers, your ecommerce brand has begun the downward spiral in revenue, and it is now a question of time before you don’t have enough cashflow to keep the lights on. 

But why is that? Let’s dig into the dynamic of new customers. 

For almost all (there are some exceptions yes) most customers aren’t that loyal. It’s a rule of thumb that the majority of customers only buy once, and then try out another provider of a product 

A study done by Gorigis (https://www.gorgias.com/blog/repeat-customer-rate) has shown that repeat customers range from 20% to 40% which means that repeat customers account for 20% to 40% of all purchases on average​ - This means that 80% to 60% of your overall customers are only buying from you once in general 

Repeat customers tend to account for a higher AOV, but there’s not much math you have to do before the importance of acquiring new customers becomes clear. 

Try navigating to your “First-time vs returning customer sales” in Shopify and i bet you can see what i am talking about 

Here is an example of one of our clients from 2019 - 2023 

First time vs. Returning customer report from Shopify

The more first time customers, the more returning customers all together adding value to your overall revenue and bottom line.

How to generate steady New Customer growth 

There are quite a few strategies that could generate new customers for your ecommerce store - there are the ones we go to:

Product launches 

This is a big one, and something a fair share of ecommerce brands forget when they are in the weeds of running a brand - new product development. 

This is very generally speaking, but to keep your own brand relevant and interesting in the longer run, you have to focus on developing new products or new product variants. 

These new products do not only make existing customers come back, but they also open up new buyer personas, that weren't very interested in what you were offering before  

If you can map out a few new product launches a year and launch them statically outside of your normal peak periods, you will see better new customer growth throughout the year.  

Expanding to new markets

I don't think I need to go into depth on why you can fuel your new customer growth by expanding to new markets

This strategy also comes with a larger portion of risk, but if you are doing your market research the right way, you should be up and running in a new market pretty quickly 

New offers (discounts, bundles, etc)

New offers do the same thing as new product launches - opening up new buyer personas and re-activating existing customers.

Making new offers is a never ending process, and must be one of the first prioritizations in a customer growth strategy

To be able to offer the right product, for the right price, at the right time is key in making a thriving ecommerce business, and if you know your unit economy well enough you can structure your offers in a way where you don't lose to much profit margin pr. order. 

Move spend to upper funnel placements

This has been quite the unlock for the majority of clients that we work with. 

Simply move a given % of spend in upper funnel platforms/placements We use YouTube quite heavily for this, but we also recommend having some non-conversion optimized campaigns on paid social to reach new customers that might now know of the existence of the brand

Content-wise it is important to have the ability to develop brand awareness-centric videos/images where you can showcase what you want to be remembered for, and your USPs (unique selling points) 

All these tactics are used while monitoring the new vs. repeat customer metrics in Shopify and Google Ads. 

In conclusion, new customer growth is a cornerstone of success for e-commerce brands. It drives revenue, enhances market penetration, and supports sustainable growth. By leveraging some of the above points, ecommerce brands can effectively attract and retain new customers, ensuring their continued success in a competitive market. 

How to make Google Ads a new customer generating machine

But how do you specifically make your Google Ads campaigns focus more on new customers? There are quite a few tools within Google Ads that you can use/implement. These are:

New customer tracking script 

In Google Ads you can further enhance your tracking setup to also include if a customer is new or returning - See documentation HERE

This gives both you and your campaigns more insights into how the split between new vs. returning customers is on the campaign level 

Use the segment function where you can see the split, or simply add the column “new customers”  

Only bid for new customers 

When this tracking setup is finalized, you can further influence your campaign bidding model by enabling “Only bid for new customers” 

This setting does exactly what it says, and enters the mission to prioritize new customers. 

In almost all cases we are seeing a smaller % of existing customers, but compared with before we have in 8/10 instances seen an increase of new customers through the campaign where “only bid for new customers” is enabled 

For search campaigns, I recommend making an A/B experiment before enabling the setting on all campaigns 

Yes - you are right - there is a large RED info box in the screenshot that mentions something about an audience segment. 

This is intentional as this brings us to the next area - defining existing customers with customer match 

Customer Match 

Customer match - which is found at the top of your conversions actions overview - is a function where you can add your customer list of previous customers to enable Google to scan those and use that data to find more new customers and enhance Smart Bidding. 

This is a must to add in all instances where you have +1000 customers 

Expert tip: If you use Klaviyo for email marketing, you can integrate that with Google Ads, and sync. all past customers in reel time from Klaviyo into Google Ads. 

Negative brand keywords 

Negative keywords are not directly related to making campaigns into new customer-focused campaigns, and new customers also do search for your brand and convert, but I feel like I would need to bring this into this section too. 

The reason is that you need to exclude brand terms from your non-brand / generic search/shopping campaigns in order for this to work amazingly well 

I’ve written a little something about it in this blogpost – Your Guide to Negative Keywords

Conclusion

If you are building an ecommerce brand in which you intend to be relevant long term, you simply need to make new customer growth your overall top priority. 

Yes, retention, product development, customer service, managing finance, and all these are important too, but without steady new customer growth all of the above matters less. 

We conducted a lot of new customer growth strategies over the years, and if you need some professional help with this, we’re happy to help you create a plan and be the adviser who tells you what to focus on - find more information HERE

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