DAX offers powerful way to analyze “new” vs. “returning” customers. In this article learn easy and simple DAX measure patterns to count number of new customers and number of returning customers from your data.
What is a Returning Customer?
A returning customer is someone who comes back to our business and does another transaction. For example, in the above illustration, CUST-001 and CUST-004 are repeat or returning customers.
What is a NEW customer?
A new customer is someone who is doing their first transaction with us. In the above example data, all other customers (except CUST-001 & CUST-004) are technically NEW CUSTOMERS.
Note: A new customer today might be a returning customer in future.
DAX measures for calculating new vs. returning customer counts
All the measures in this example are based on a simple “Data” table with 4 columns – Customer ID, Date, Order Qty and Product Name.
Customer Count Measure
=Customer Count = DISTINCTCOUNT(data[Customer ID])This is a simple distinct count measure that tells us how many distinct customers transacted with us. When used with a the context of a date or product we will get the number of customers per each.
Returning Customer Count Measure
Returning Customer Count =
var custs = DISTINCT(data[Customer ID])
var curr_date = LASTDATE(data[Date])
return
sumX(custs, CALCULATE([Customer Count], data[Date]<curr_date))This measure tells us how many returning customers are there for the context of current “time-period”.
How this returning customer count works?
Imagine the below output and let’s focus on the second row.
- For the date context of 6-January
- We create custs variable which gives us all the 92 customer IDs.
- The curr_date variable tells us the latest date – i.e. 6-January.
- We then iterate for each of the customers in custs table and calculate the [Customer Count] prior to the curr_date. This would be 1 if the customer has previously transacted with us and 0 otherwise.
- The SUMX adds up all these values (ie all 1s) and tells us 33, which is the number of returning customers.
New Customers Measure
New Customers = [Customer Count] - [Returning Customer Count]If you already have both the total [customer count] and [returning customer count], you can easily subtract one from another to get the [new customers] count.
But if you don’t have the [returning customer count] or just want to directly calculate the [new customers], you can use below DAX measure.
New Customer Count - direct =
var custs = DISTINCT(data[Customer ID])
var curr_date = LASTDATE(data[Date])
return
SUMX(custs, IF(CALCULATE([Customer Count], data[Date] < curr_date)=0,1,0))The above measure uses the same approach as [Returning Customer Count] but flips the logic inside SUMX by using the IF function to negate the CALCULATE result.
Returning Customers in Last 4 Weeks or similar
While the above [Returning Customer Count] works flawlessly, it may not be realistic to consider a customer to be returning if they rarely transact. So a more realistic calculation would be to consider a customer to be returning if they did some business in the last 4 weeks (or x periods). Here is the DAX pattern for that.
Returning Customers in Last 4 Weeks =
var custs = DISTINCT(data[Customer ID])
var curr_date = LASTDATE(data[Date])
var start_date = DATEADD(curr_date,-28,DAY)
return
SUMX(custs, CALCULATE([Customer Count], data[Date]<curr_date && data[Date]>=start_date))In this case, we simply calculate the “start_date” for our calculation window as well. Here I have used 28 days as an example, but you can easily change this to any window size.
Then we apply the same SUMX logic but modify the filter context in the CALCULATE to check both boundaries of the dates.
Why not do this analysis in SQL or somewhere upstream?
When I mentioned about this approach to my wife Jo, she said, why not do this in SQL directly and tag each customer as “new” or “returning”?
Here is why I prefer to do this with DAX:
- Business Rule Flexibility: With DAX based approach, we can easily change the business rule surrounding who is a returning customer. For example, we can use the 4 week window like above easily.
- Interactivity: We can add a product slicer (see below) to analyze which customers returned to purchase the same product. This is incredibly helpful to understand customer loyalty and campaign effectiveness.
Of course, there are advantages with SQL approach too. Mainly,
- SQL tagging is faster: Unlike DAX calculations which run in real-time & client-side, SQL calculations are done once and at server side. When you have millions or billions of records, doing SUMX in real-time is going to be slow.
- Consistency: Applying customer tagging at server side in the data layer means the business rule & logic is consistently applied for every report.
Sample Power BI Workbook:
If you want to play with these measures and understand the calculation better, check out the sample PBIX file here.
In conclusion
New vs. Returning Customer analysis is a must-have for customer analytics. The DAX required for this is easy to implement and works beautifully. Try this analysis to understand the effectiveness of marketing campaigns (lead gen, customer capture) and loyalty programs (reward points, notifications). Using a time-window based calculations (ex: 4 weeks) is a great way to understand customer behavior and purchasing patterns.
30 Responses to “Great News: Chandoo becomes MVP”
Congratulations! It's well deserved. 🙂
This is amazing. Hearty congratulations and a rocking new year ahead!!!
Congrats! I have learnt alot from your site... and the most important is learning how to achieve the most with the simplest concepts.
Thanks for the excel calendar. Is it possible to get a simple big fonted calendar printable on an A4 size paper without any distracive notes or visuals? BTW, I have already signed up for your newsletter. With warm regards and
Gratefully yours
50+ year old CHarish.
Hey Chandoo,
Great to hear that. Congratulations! The best new year gift, I would say. Keep it up, u've been doing extraordinary work for the excel users community.
Regards,
Pankaj Verma
Congrats dude... fantastic news!
congratulations! your site is great, this is well deserved
Rich
I recently found your site, I visit many. The tips that you provide are in the top 1% of all the sites I visit. Keep on Excelling.
Arnold
South Africa
Congratulations, Chandoo! That's a great way to start the year and make the PHD even better.
Congratulations, Chandoo.
Your site is one of most useful on the net. Happy new year and lot of ideas you will present for us.
Congrats.
Just read your name in an email from Abhishek. Well deserved.
Congratulations, and Happy New Year.
Greetings from Rio de Janeiro my friend! You trully deserve it!
Nive way to start 2009! Keep up the good work!
FC
That was quite forseeable , so you have now really got your PhD in excel.
Anyways Chandoo you have made excel a real Fun doo
I will like you to write some more on INDEX and MATCH function in near future.
@Hey Chandoo ! Congrates....
Ab to treat mangta hai !
Well deserved Chandoo!!
Congrat's!! Very well deserved 🙂
i always browsed mr.excel and used to see MVP writtne below names of people who used to solve queries in excel forum there......i just used to admire as to what they have special in them that they are MVP......
but now i got my answer...............u deserve it man..........
@All: thanks everyone 🙂
Congratulations Chandoo, nice job!
Chandoo,
A well deserved recognition and a good start to the New Year. Continue your good work.
Subbu
Many Congratulations.
You deserve a Ph.D. 🙂
congrats.....
Congrats dude. Rock on!
[...] charting community in 2007 and has been growing strongly ever since. In year 2009, I have received the MVP award from Microsoft. Just few days back I have become a dad [...]
Respected sir,
I am impressed!.... Good job done.. Keep it up...
Sir, How to be a MVP certified person. What level of knowledge is required for it? send me links if possible.
Please reply...
Regards,
Dipak Khalasi.
Dipak -
The first thing you need to cultivate is the ability to search the web effectively. You could start by Googling "Microsoft MVP".
[...] boy and girl which has been made hectic and incredibly fun ever since to their life.He has been awarded MVP status in 2009 by Microsoft(and renewed in 2010,2011 & 2012).His MVP profile is here.If you want to contact him direct then [...]
Congrats Chandoo!!
[…] Chandoo becomes MVP […]