Why Differentiating Your Customers is Important

Typically, all individuals who pay you are considered customers, as are those on free plans of indefinite durations, but those on limited duration plans (trial plans) are not. Similarly, individuals who obtain goods or services but generate no revenue due to the application of discounts, coupons, or special offers are frequently also considered customers.

A customer is considered a new customer at the time of their first transaction; if the transaction spans a period of time, they are considered a new customer at the initiation of this period. Thus an online retail customer would be considered a new customer at the moment that they complete their first purchase, whereas a subscription-based business customer is considered a new customer when the subscription is initiated.

A returning customer is a customer that has previously purchased goods or services from you and is making a subsequent purchase. In the case of a subscription business, customers who are in-plan and making regular payments are also considered returning customers.

Distinct customers and unique customers both have the same meaning: the count of unique customers within a given time period. For example, if on Saturday 20 different individuals make one purchase each from you and one individual makes 11 purchases, you had 21 distinct customers on Friday (one of whom is much more valuable to you than the others).

Understanding customer behavior is critical to growing a business. A business with 2,000 individual sales among 2,000 different customers should be managed differently, and the customers treated differently, than one in which most of the revenue is generated by a handful of high-value customers.