Simply increasing traffic to your website or store is becoming an outdated retail marketing strategy. In 2018, you wouldn’t save up for an iPhone 3 or create a MySpace page, so likewise, you want a marketing goal that is relevant to the current market. Brand loyalty is more important than ever and can make a massive impact on your business. Here are 16 customer retention statistics that might surprise you.
The Importance of Customer Loyalty for Your Business
- According to Marketing Metrics, if a customer has previously made a purchase from your company, there is at least a 60 percent chance that the customer will make at least one more purchase. Meanwhile, if a new visitor clicks on your site, the chances of that person becoming a paying customer are only 20 percent at the most.
- Quality of service is essential for customer retention. According to Verint’s customer rete
- ntion statistics, 31 percent of the time, customers switch brands because they found a new company with better prices. 34 percent of the time, however, they switch because they are dissatisfied with the service at the old company.
- Despite the importance of customer retention, less than a third of business executives consider it a priority.
- Moreover, 57% of marketers who implemented a loyalty program were not completely confident in it.
The Financial Impact of Customer Retention
- Recruiting new customers costs five times as much as retaining current customers.
- It is 16 times as costly to build a long-term business relationship with a new customer than simply to cultivate the loyalty of an existing customer.
- The average customer spends 67 percent more in his or her third year as a customer of your business than in the first year.
- Businesses lose $1.6 trillion per year when customers move away from them.
- 20 percent of customers of a given company are the source of 80 percent of the company’s profits.
- The average global value of a lost customer is $243.
- An Annex Cloud client who implemented an advocate loyalty solution saw a 1,660% increase in revenue from the program in four months.
How to Build Customer Loyalty, According to the Numbers
- 66% of consumers said that features, design and quality of product or service were the leading factors in determining brand loyalty
- Efficient, courteous customer service is important for customer retention. Numerous studies show that customers end their relationships with companies because of poor customer service. According to 24/7, 47 percent of customers surveyed have switched companies after a single instance of poor customer service.
- A customer who is “totally satisfied” delivers 2.6 times as much revenue as one who is “somewhat satisfied.”
- According to Business Wire, coupons are a very effective way of attracting new customers. More than half of people surveyed would try a new brand if it offered them a coupon. What does this have to do with customer retention? Don’t be the company that loses out because your competitors offered coupons and you didn’t. Offer your existing customers coupons at least as often as your competitors offer them. Implementing a loyalty program is a great way to do so.
- According to MarTech, it is possible for a company to bounce back from a negative experience with customer service. More than half of customers who complained about customer service continued to do business with the company after being offered some kind of compensation, such as a discount.
- Six customers out of ten cite surprise rewards as a reason they stay loyal to a brand.
- Loyal customers feel betrayed if a company misuses the information that the customers provided to it. Nearly four out of five customers would abandon a favorite brand if the company used the customers’ personal data without first notifying them.
- According to Yes Lifecycle Marketing, different age cohorts respond best to different types of promotions. 85 percent of Generation X customers (born 1965-1980) prefer discounts, while Millennials (born 1981-2000) are most partial to reward points.
- 56% of consumers said personalized rewards improve their estimation of a brand
- According to Colloquy, loyalty programs are a solid customer retention strategy. Americans hold 3.8 billion loyalty program memberships. They hold enough memberships that every two people in the world could have one. Of course, how long they stay loyal to the loyalty program is proportional to how quickly it yields rewards.
Customer Retention Pays Off
The statistics show the many different ways in which working to retain customers is a good investment. Repeat customers spend more money and require less costly advertising. How best to appeal to existing customers to keep their loyalty depends a lot on your target demographic, especially the customers’ ages.
Annex Cloud can help you build a customer retention strategy that is unique to your company with our highly configurable customer loyalty software. Whether your customers like discounts or points, games or surprises, we have something for everyone.
