Did you know that customer retention statistics show that it is cheaper to retain a customer than it is to gain one? This is why it is important to take steps to retain customers for as long as you can.
Let’s face it:
Merely finding new customers will never be enough if you continue to lose clients. Today’s customers are spoilt for choice. So, if you don’t offer them what they’re looking for, they’ll gladly move to the next best alternative.
The thing is:
Customer retention has become an issue for most businesses today, especially due to social media where bad reviews and word of mouth can spread quickly. An unhappy customer can lead to hundreds of unhappy customers. And if a business fails to control the situation, it can easily get into trouble.
So, without further ado, let’s start with some:
Brilliant Brand Loyalty Statistics (Editor's Pick)
- Customer retention is important because there is a higher chance of selling to an existing customer than to a new customer – 70% versus 20%.
- About 65% of your profit comes from your existing customers and about 80% of all your future profit will come from less than one-fourth of your existing customers. Losing them can cause a huge loss to your business.
- Only about 32% of marketers consider customer retention a priority, and most concentrate on finding new clients.
- It is important to answer what does customer service mean to you since the average business in the US will lose about 15% of clients every year.
- Business uses customer loyalty programs to retain customers since the average small business loses about 20% of new customers. Your retained customer can bring you more buyers.
- About 80% of users in America point to convenience, speed, knowledgeable, and friendly help as some of the most important elements.
General Customer Retention Statistics
1. Poor customer retention results in a loss of over $136 billion per year.
It is important to define retention rates then take steps to reduce avoidable switching by finding out what’s causing clients to look elsewhere. Most switching is avoidable if a business can take the right steps at the right time.
2. Bad customer service is one of the major reasons why some companies have poor client retention.
More than 50% of US customers have scrapped a transaction due to poor service. About 33% say one bad experience is enough for them to switch to another provider. In fact, 66% of buyers switched to a new brand only due to poor service, and about 70% of these customers may be willing to go back to the previous business if they improve their service.
3. It is 5x more costly to win a new customer than it is to retain a customer.
Businesses have to spend money to win new clients including email marketing, cold calling, SEO, etc. All this reduces the ROI and has an impact on the bottom line. This is why businesses should know how to calculate customer retention rate so they can see exactly how much they are saving by keeping older clients.
In fact, about 82% of businesses agree that it is cheaper to retain a client than it is to get a new one. Plus, getting a new client up to the same level as an old client can be 16x more costly in terms of money and time. Hence, the importance of retaining customers cannot be neglected.
4. Customer retention can improve profit by 10%.
According to reports, an increase of just 2% in customer retention can increase your profit by up to 10% due to lower costs.
5. Older customers bring you about 33% more money
An older client typically spends the same amount of money in 6 months that a new client does in 18 months. This is also why it’s important to spend on brand loyalty since your top 10% of buyers will spend 3x more than your average client.
6. 55% of buyers will never come back once they leave you.
It is important to pay attention to the customer journey if you want to retain customers, since more than half of your buyers will never come back once they move to a competitor. So, improve your customer retention strategies and work on client retention.
7. About 77% of customers build relationships that last over 10 years.
Buyers like to trust a brand and stick to it until they get a reason to shift. This is why businesses should define customer retention clearly and understand the concept of clients vs customers.
8. It takes the average person about three months to begin to feel any loyalty for a brand.
A new customer will feel loyal to a brand after five purchases, which can take up to three months. Be clear about what number of repeat sales can be expected from each new client. It can, however, be difficult to get a customer to make such a high number of purchases since they expect 24/7 customer support, special discounts, and free shipping among other things to stay loyal.
9. Customers who connect emotionally with a brand are 306% more valuable.
Customers who are emotionally invested are worth more not only because they buy more but also because they bring more clients to a business through recommendations.
10. Average customer retention rate by industry greatly differ.
Customer retention rates depend on which industry you are in. The average is 20%. However, some industries such as the telecom industry have better rates. Here are some customer retention examples:
- AT&T customer retention rate is 78%.
- Verizon customer retention rate is 82%.
- Spectrum customer retention is a little lower.
- Comcast customer retention isn’t very good due to people cutting the cord.
11. Companies that spend money to improve customer service can charge a higher premium.
If you’re wondering what are the benefits of customer retention, you’d be surprised to find out companies that offer good experiences and have higher customer retention can charge a 16% price premium that helps them make more money.
12. 63% of consumers are willing to share personal data in exchange for better services.
Businesses need data in order to provide customized services to clients. Data helps them understand what customers need so they can keep them coming back and grow their business. Plus, data helps in product development and marketing, which is why businesses work very hard to collect it. One of the best ways to gather data is to provide better services. Happy customers are more willing to share information.
13. 37% of customers want a loyalty program.
Loyalty programs are designed to push consumers to pay more, stay loyal, and keep coming back. And consumers clearly love them! This is why more than one-third of buyers are willing to pay more to reach the next tier of membership.
What’s more, it provides businesses with a good opportunity to make more sales, as having a loyalty program is one of the best customer retention techniques.
14. 31% of buyers want a free trial.
A friendly return policy is very important for a business, as about three out of ten buyers want to purchase from a company that allows them to make payments after they’ve used a service. Many mattress companies follow this retention marketing technique to increase customer retention.
15. 61% of users will ditch a website that is not customer friendly.
Customers want to buy from fast websites that are easy to use. In fact, about 90% of buyers will close a window that takes more than three seconds to load. One of the best ways to retain your current customers is to have a website that is responsive, fast, and easy to navigate.
16. More than 30% of customers are willing to pay more for better services and products.
About 33% of buyers are willing to pay more for a better experience. Today’s customers don’t simply want good products. They want good service as well, as it’s all about the overall experience.
In fact, about 66% of buyers will not choose a store that doesn’t value their time. This is why the checkout process needs to be quicker, with fewer hassles. Otherwise, customer engagement and retention will remain low. Investing more to provide a better experience can be a good option since about 40% of buyers are willing to pay more for same-day delivery.
17. 69% of buyers pay attention to both online and offline experiences
(Source: Help Scout)
A customer will not solely pick your business on the Web based on your online image. They will also care about how you are offline. This is why businesses need to be consistent and provide exceptional services to all clients all the time.
18. Only 46% of consumers are happy with their experience at most businesses.
According to a survey, over half of US consumers say customer experience at most businesses needs to be improved. The opinion is shared by both new and existing customers.
19. 73% of buyers say customer experience is the most important factor when deciding on a company.
Companies need to understand what is meant by customer retention and how to retain customers since about 59% of consumers in the US will not choose a company if the company is not able to offer good customer service. About 59% of customers will give a business a second chance, and these customer experience statistics show that about 17% will ditch a firm after a single bad experience.
20. 75% of customers check online reviews before making a purchase.
This shows the importance of online reputation management. Customers check YouTube and other social media platforms to learn more about a company before they choose it. This is why websites like TrustPilot often have fake reviews. Customers prefer to check reviews from influencers they trust.
21. Only 9% of buyers prefer to use social media to engage with a company.
(Source: Integrity Marketing)
While customers enjoy watching marketing content and checking reviews on social media, they do not prefer to use social media to get in touch with customer service agents.
But even if they do not use social media to contact a company, about 31% of users prefer companies that give them multiple options to get in touch. Moreover, about 20% of buyers use social media to complain about a bad experience and expect to get a response within 5 minutes.
22. 90% of consumers love customized services.
Customers want to work with a company that knows their account history, preferences, and background well. This helps them form a connection, which reduces customer turnover. Customer retention marketing also involves the use of the same agent, as about 70% of users prefer to work with the same person when they have an issue instead of having to deal with a new person every time they get in touch with the team.
Additionally, about 83% of users also want to be given the ability to seamlessly move from one channel of communication to another.
23. 30% of users will leave a company that doesn’t reward their loyalty.
Customers want to be rewarded for their business. And if they see no perks, they will switch to a competitor who makes them feel special.
24. Most customers require four calls before they say yes.
Sales follow up statistics show that consumers like to be contacted in a personalized manner if they ditch a cart. Cold calling can work, but 80% of buyers will say yes only after the fourth call. It is important to read clients and know their preferences.
Ask yourself – what are customer retention strategies that we are going to use, and how do you track customer retention?
25. Only 18% of businesses focus on customer retention services and customer retention metrics.
About 44% of companies focus more on acquisition rather than retention, as they want to win a future customer without caring for current clients. Some do not even define retention rates and know nothing about the importance of customer retention or the customer retention rate formula that appears complex on paper but is quite simple.
Final Thoughts on Brand Loyalty Statistics
We hope these customer retention statistics will help you keep your customers. Make sure to revise your customer retention definition so you are clear
about what is customer retention.
Find out what customer retention programs are based on what concept so you can increase client retention. Consider using customer retention technology such as customized messages.
Want to have recurring customers? Keep our stats nearby!