Are you looking for a piece of trustworthy statistical information about customer loyalty and retention?
Regardless of what business you are in, bringing in new clients and driving new traffic to your site has always been the core focus.
However, forces in the retail industry are shifting. With everyone getting ahead of digital marketing, maintaining cordial customer relationships is the only cutting edge that’ll give you a competitive advantage.
Recent statistics show that retaining your customers is becoming increasingly difficult.
Yet, if you want your business to thrive, you should be looking for ways to ensure brand loyalty.
The first step is to know the numbers.
Here are some fantastic customer loyalty and retention statistics that may surprise you.
- Customer Loyalty & Retention Statistics Summary
- Top 13 Customer Loyalty & Retention Statistics
- 1. The Probability of Selling to an Existing Customer is 3x to 35x Higher
- 2. How Much Company’s Business Comes from Existing Customers?
- 3. What Is the Average Customer Retention Rate?
- 4. Existing Customers Generates More Sales Than New Ones
- 5. 82% of Companies Agree That Customer Retention Is Cheaper Than Acquisition
- 6. What Are Customer Retention vs Acquisition Costs?
- 7. Email Marketing Is the Number One Strategy for Most Businesses to Maintain Their Client Retention Rate
- 8. Earning Rewards And Loyalty Points Is One of the Most Valued Aspects of the Shopping Experience
- 9. Companies That Offer Rewards Are Preferable to Consumers
- 10. What Is the Customer Retention Impact for Company Profit?
- 11. How Important Is Customer Service to Brand Loyalty Among US Consumers?
- 12. What Is the Poor Customer Service Impact for Business?
- 13. Excellent Customer Service Translates to Repeat Purchases from Customers
- Customer Loyalty & Retention Statistics – Verdict
Customer Loyalty & Retention Statistics Summary
- The probability of selling to an existing customer is 60-70%, while the probability of selling to a new prospect is only 5% to 20%.
- 65% of a company’s business comes from existing customers.
- For most industries, the average customer retention rate is below 20%.
- Loyal customers spend 67% more than new ones.
- 82% of companies agree that customer retention is cheaper than acquisition
- It costs up to 7x more to acquire a new customer than to retain an old one.
- About 80% of businesses still rely on email marketing to assist with maintaining their client retention rate.
- 58.7% of internet users believe earning rewards and loyalty points is one of the most valued aspects of the shopping experience.
- 75% of consumers say they favor companies that offer rewards.
- Increasing customer retention by just 5% boosts profits by 25% to 95%.
- 69% of US consumers say customer service is very important when it comes to their loyalty to a brand.
- Businesses lose $1.6 trillion per year when customers move away from them.
- 93% of customers are likely to make repeat purchases with companies who offer excellent customer service.
Top 13 Customer Loyalty & Retention Statistics
1. The Probability of Selling to an Existing Customer is 3x to 35x Higher
When you are trying to sell a product, you have a 60-70% chance of making a sale with a returning customer. The probability of the same with a new customer is 5-20%.
With a new customer, you have to undergo certain stages first, before they can buy your products.
Your aim, therefore, is first to sell your brand and company before you can sell your products to them.
An existing customer already knows about your company, and if they were previously satisfied with your products, they would likely get some more.
2. How Much Company’s Business Comes from Existing Customers?
65% of a company’s business comes from existing customers.
Most businesses usually focus on getting new clients.
However, your existing customer base is far more critical when it comes to generating sales.
Customer Research Institute argues that the existing customer base contributes 65% of the company’s business.
Seeing as it is easier to make sales with returning customers, companies that focus on retaining their customers record up to 60% more profits than their competitors.
3. What Is the Average Customer Retention Rate?
For most industries, the average customer retention rate is below 20%.
Many companies across different industries struggle to retain their existing customer base.
The customer retention rate allows companies to know where they stand, how good they are at bringing in prospects, as well as satisfying their existing customers.
A research report by MixPanel’s Product Benchmark showed that the average retention rate was 20% across different industries.
This rate is below the average mark, which is 35% in the SaaS industry and 20% in the media and coverage industry.
4. Existing Customers Generates More Sales Than New Ones
Loyal customers spend 67% more than new ones.
Your existing customer base already accounts for most of your sales.
These returning customers are also more likely to spend more on your products than a new prospect.
A new customer will consider your company or business venture risky and will not commit to spending much.
A returning customer, on the other hand, gets to build a relationship with your brand.
This relationship culminates trust, and customers are likely to spend 67% more than new customers.
5. 82% of Companies Agree That Customer Retention Is Cheaper Than Acquisition
Retention and acquisition are two of the essential strategies for generating sales.
Although most companies agree that it would be cheaper to retain existing customers, many of them are still focused on acquisition rather than retention.
Econsultancy carried out a Cross-Channel Marketing Study for two years.
Although there was a decrease in the number of companies that focussed on the acquisition, it remained as the dominant strategy for most companies.
6. What Are Customer Retention vs Acquisition Costs?
It costs up to 7x more to acquire a new customer than to retain an old one.
Depending on the scope of your business and industry, you may spend 7x more to acquire a new client.
A returning client already trusts your brand and likes your products.
Therefore, you only need some little marketing effort to get them on board again.
A personalized message, for example, could be all that you need to generate more sales from them.
With a new customer, you have to do some heavy marketing to sell them your brand and acquire their trust.
7. Email Marketing Is the Number One Strategy for Most Businesses to Maintain Their Client Retention Rate
About 80% of businesses still rely on email marketing to assist with maintaining their client retention rate.
Email marketing has been a marketing strategy for many businesses, including brick and mortar ones.
A report on small and medium-sized enterprises by eTail showed that 80% of companies whose annual revenues are under $100 million rely on email marketing for customer retention.
Although new marketing channels are cropping up, email marketing takes the lead for customer acquisition as well, with 81% of the businesses relying on the strategy.
8. Earning Rewards And Loyalty Points Is One of the Most Valued Aspects of the Shopping Experience
58.7% of internet users believe earning rewards and loyalty points is one of the most valued aspects of the shopping experience.
If you are going to retain your customers, you must invest in offering a smooth shopping experience.
While there are many ways to achieve these, a massive chunk of internet users would love to earn rewards or loyalty points whenever they shop.
The same study by iVend retail showed that millennials are less likely to participate in loyalty programs.
As such, you should be considerate of your target customers’ age bracket when choosing a retention strategy.
A quick and easy checkout was the most valued experience, with 83% of the respondents citing it at the top of the list.
9. Companies That Offer Rewards Are Preferable to Consumers
75% of your target consumer base will choose your competitor over you if they are offered rewards.
Although only 64% of the consumers still find it viable to earn loyalty points from purchases, many of them consider their time as currency and would want to be rewarded for it.
An excellent customer retention strategy would be to use non-traditional loyalty programs.
You can choose to reward your customers for participating in a survey or watching a marketing video.
10. What Is the Customer Retention Impact for Company Profit?
Increasing customer retention by just 5% boosts profits by 25% to 95%.
Most companies don’t venture into customer retention strategies since they take time to bring in actual results.
However, including customer retention in your marketing strategy could help you bring in more profits.
If you are looking to generate 25-95% in profits, then you only need to increase customer retention by 5%. The marketing strategy will only pay off after the cost of fostering a loyal relationship is met, and your customers are now spending more on each purchase.
11. How Important Is Customer Service to Brand Loyalty Among US Consumers?
69% of US consumers say customer service is very important when it comes to their loyalty to a brand.
Several factors come into the minds of customers when they are choosing a brand to be loyal to.
Statistics on global customer service shows that 69% of US consumers consider customer service an essential factor for their brand loyalty.
The survey sampled 5,000 respondents from different countries, including Brazil, Germany, Japan, and the UK.
96% of the respondents said that customer service played a significant role in influencing their loyalty to a brand.
12. What Is the Poor Customer Service Impact for Business?
Businesses lose $1.6 trillion per year when customers move away from them.
One of the primary reasons why customers switch to competitor brands is poor service. In doing so, businesses record losses of up to $1.6 trillion.
Another study also showed that 83% of the consumers preferred human interaction for their customer service, instead of using digital channels.
13. Excellent Customer Service Translates to Repeat Purchases from Customers
93% of customers are likely to make repeat purchases with companies who offer excellent customer service.
Excellent customer service will help reassure the customer.
The next time they require a particular product or service, they are more likely to make a repeat purchase from a company that offered a smooth customer experience.
Customer Loyalty & Retention Statistics – Verdict
Your existing customer base plays a crucial role in your business’ success.
These loyal customers will spend more on what you have to offer, make repeat purchases, and even help you bring in more customers.
Thus, rather than focus your entire marketing strategy on bringing in new customers, you should also be looking to keep the existing ones satisfied with your services.
The numbers don’t lie, and with the customer loyalty and retention statistics above, you should be better placed to craft a strategy that will boost profits.
- Customer Loyalty By Jill Griffin – Altfeld Inc
- The Age of the Customer: Focus on Retention – DNB
- Here’s Why Customer Retention is So Important for ROI, Customer Loyalty, and Business Growth – HubSpot
- The Ultimate Guide to Customer Loyalty in 2017
- Marketers more focused on acquisition than retention – Econsultancy
- Exploring Customer Acquisition vs Retention Costs – Struto
- Millennials and Gen Zers Are Less Inclined to Participate in Loyalty Programs – eMarketer
- HelloWorld: New Loyalty Report Reveals 75% of Consumers Want To Be Rewarded Beyond Purchase – Globe News Wire
- Customer Retention Should Outweigh Customer Acquisition – Retention Science
- State of Global Customer Service – Microsoft
- Poor Service Will Cost Companies $1.6 Trillion. How to Avoid Being a Service Statistic – SalesForce
- U.S. Companies Losing Customers As Consumers Demand More Human Interaction, Accenture Strategy Study Finds – Accenture
- The Hard Truth About Acquisition Costs (and How Your Customers Can Save You) – HubSpot