I'm trying to figure out the value of returning customers vs. new customers.
Our avg. order for new customers is $84.
The average spend for customers who purchase more than once is $148.65 (This means, if a customer purchased 2 or 3 different orders, their average spend is about $148.65 at the moment)
We have a customer return rate of about 10% – 13% (Let's take 10% to make it easy)
This means for every 100 customers we should generate about $8,400. Plus 10% of returning customers.
Now the value of the 10% returning customers is a bit lower. So because of that, do I calculate the difference of the avg. new customer vs. avg. returning customer? ($148.65 – $84 = $64.65) and apply his to the 10% expected returning customers?
So for example, let's say next month we get 100 customers.
100 * $84.00 = $8,400 (New customers)
10 * $64.65 = $640 (Returning customers)
Is my returning customer value $64.65? I feel like I'm missing something.
Any help would be HIGHLY appreciated. Thank you in advance.