One of the things I’ve criticized Google Analytics about in the past is the new vs. returning visitor ratio metric. This ratio tends to mislead marketers, especially marketers new to web analytics.
In aggregate, the ratio tells us nothing useful. As far as marketing objectives go, we want more of both, don’t we? We want more new users AND we want more returning users.
Is there a time when these ratios might be useful, might give us some insights that can inform our marketing and help us make decisions? Yes: when we’re looking at individual channel performance.
Let’s look at an example.
Here’s my overall site new vs. returning visitor ratio.
This is not helpful; this does not guide me or suggest what I should do differently. I can see that on a big picture level, 9 out of 10 visitors to my website are new, but without the context of whether traffic is increasing overall or decreasing overall, this doesn’t tell me much other than my site is attracting new visitors fairly well. Should I focus more on retaining loyal visitors? Should I double down on increasing new visitors? There’s no decision to be made here.
Part of the reason why this metric is unhelpful as presented is because it’s absent context or comparison. There’s no scale of time or another metric to compare it against, two important tactics for making any measurement more useful. If this had new and returning users over time, that would tell me something about each, for example.
However, we can use the second tactic: comparison. Watch what happens when I apply some segmentation and look at channels such as source/medium. In Google Analytics, we’d add these segments from the top segment menu, dropping channels in from either the System segments or our own custom segments.
Now we’re cooking. Look at those individual channels. YouTube brings me more loyal visitors (no surprise, since my videos there are an integral part of daily blog posts). Facebook brings me more new users.
With this, I have a sense of the purpose for each channel. If I need new users, I go to Facebook. If I need to reactivate loyal users, I go to Twitter or YouTube.
That’s a decision I can make, an action I can take.
Let’s kick it up a notch and look at the bigger picture:
If I want new audiences, I focus on organic search, on SEO. If I want returning audiences, I send some email.
These charts can now inform my digital marketing strategy, helping me to understand what I should be doing on each channel. Actions to take, decisions to make.
Let’s kick it up a notch and look at these channels over the last year. Using Google Data Studio, I can put all my channels side by side:
What we see above are new and returning ratios over time. Rather than just pie charts, we see the trends of each channel over time and glean insight from those trends. I see that new users for the last month from search are on the increase, while everything else is more or less flat. That tells me that my site is too reliant on organic search and I need to diversify a bit.
Let’s kick it up another notch. In Google Data Studio, we can select by channel grouping. I’ll select just email for the year to date, new and returning users:
Isn’t that interesting. Something in April through June made email traffic to my site go up considerably. That’s something I’d want to dig into and examine to see if I can repeat that success. Decision made, action to take.
Drill down into each of your channels and understand what’s contributing to your website traffic, using the new vs. returning ratio. While we always want more of both, it’s helpful to dig into our traffic composition to gain more insight about how people are finding us on any specific channel. Once we understand new and returning user ratios and absolute numbers, we prioritize what to do better in our marketing.
If you’re a subscriber to my Almost Timely Newsletter or a member of my Analytics for Marketers Slack, you’ll get a link to the Data Studio dashboard above to make a copy for yourself (it’ll be in the November 17 edition of the newsletter). If you’re not, choose one or both:
Disclosure: this post was originally written in 2015 and has been updated several times with new data and new methods. The most recent revision swapped out Tableau charts with Google Data Studio charts.
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Also published on Medium.