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One essential key to long-term business success is customer loyalty. Loyal customers return time after time, and tell their friends and loved ones about their positive experience with a business. As a business owner, you’re always on the lookout for new ways to increase customer retention. This article breaks down the key customer loyalty statistics you need to know for your small business.
You’ll learn how to keep people coming back to your business, the attributes of loyal customers, and more.
Consumers prefer companies that give incentives, according to 75% of respondents.
Offering incentives for repeat business is an effective way to build a loyal customer base. There’s a reason why both major businesses like hotels and airlines choose this strategy. It can also be really powerful for small businesses. In a recent survey, 75 percent of customers liked receiving free items after accumulating points when they made a purchase. 71 percent liked receiving discounts, and 67 enjoyed the opportunity to get to try free samples.
By rewarding frequent business with these perks, you’ll keep customers engaged and give them a reason to keep coming back.
How Important Are Existing Customers?
Existing clients account for 65 percent of a company’s revenue.
Your business’s industry and customer satisfaction levels will eventually determine your Repeat Customer Rate. Although the percentage of consumers that return varies by organization, most eCommerce businesses have a 25-30% return rate.
Customers usually stick with a brand or business when they experience a high level of service and quality. It’s really important to give them the sense they are valued and cared for. If customers are only making a purchase because the price is low, they may go elsewhere next time, if another business offers an even lower price.
Building loyalty means building a relationship where your customers know they are getting additional value through service, advice you provide and a great overall experience.
Customers that receive exceptional customer service are more inclined to make repeat purchases, according to 93 percent of customers.
What does great customer service look like? It starts with listening to your customers so you can determine how to best meet their needs. After all, they are making a purchase or using your services because they have some need. Being able to explain both the features and benefits of the products and services you sell and how they meet the needs of your customers makes them feel valued, listened to and that they are getting the best product for them.
Being friendly, professional and courteous is another way to set yourself apart from the competition. When you and your employees keep great customer service in their minds in every part of the transaction, it shows your customers how much you value them.
What are companies doing to retain their customers?
There are a number of things you can do to retain customers. Many companies employ discounts, surprise gifts, customer surveys, and participation in community events!
It’s common knowledge that 44 percent of businesses prioritize client acquisition over 18 percent prioritize customer retention rate.
Keeping a customer happy so they return is much more cost effective than constantly having to go out and find new customers. Additionally, satisfied customers will tell others about the great service they received, which costs you nothing, but provides a huge benefit.
Successful businesses place an equal emphasis on keeping customers happy and finding new customers to please.
Focusing on customer service
90% of consumers in the United States say they are as loyal as or more loyal to their favorite company than they were a year ago.
This shows just how much great customer service pays off. When customers feel valued they return. When you show them that you have the knowledge to help them make smart purchases that will meet their needs, they have a great incentive to keep coming back.
Customers in the United States make unfavorable comments about businesses on social media in 35% of cases, whereas positive remarks are posted in 53 percent of cases.
Great customer service is not just about adhering to industry best practices such as respecting customers’ time, maintaining a pleasant demeanor, and providing informed and useful resources, but also going above and beyond to exceed — rather than just meet — expectations.
Surprising gifts and offers are the most essential method for brands to communicate with customers, according to 61% of consumers.
Other popular responses from the study include a more easy purchasing procedure (50%), fixing a problem or a query (45%), and recommending items based on requirements (27%).
Source: AP News
More than half of consumers say they’ve abandoned a company with which they were previously loyal in favor of a rival that better meets their demands.
The last thing you want is for someone to leave your company for another. Whether they’ve had a bad customer service experience or found a better price, it’s your job as a business owner to stand out from the rest in a positive way. A whopping 66% of customers will abandon a brand after a bad customer service experience alone.
Corporations in the United States lose between $75 billion to $1.6 trillion a year as a result of bad service.
The cost of bad customer service is shocking. Corporations across the country lose billions to trillions of dollars each year when customers have bad customer service experiences. This is commonly due to cost-cutting strategies, prioritizing profit over customer satisfaction, and the computerization of customer service..
Source: Midlands Technical College
Nearly 90% of customers trust a firm whose service they have evaluated as “very good” to meet their demands.
Current customers account for 65 percent of a company’s revenue.
- 20 percent of a company’s current clients account for 80% of profits.
- Is it true that devoted consumers spend more? Yes, according to Forbes, loyal customers are 50% more likely to try new products and spend 31% more.
- Recruiting new consumers is five times more expensive than keeping existing ones.
Source: Qualtrics, Zippia, and Forbes
If a company provides exceptional customer service, 93 percent of customers will buy from them again.
The reasons for this behavior vary; many loyal customers are pleased when they receive prizes, for example. 90% are more likely to purchase more.
Source: Hubspot (2)
More than half of all Americans have canceled a transaction due to poor customer service.
It’s so important to listen to your customers, and show your commitment to solve any problems that arise promptly and professionally. Over 50% of Americans have decided to cancel a transaction after receiving poor customer service, and 33% said they’d abandon the brand after just one negative experience.
Source: BusinessWire (2)
Creating a Connection
Customers aged 18 to 34 believe that social media platforms are an excellent medium for customer support, with 65% believing so.
The method via which organizations connect with their consumers is referred to as a communication channel. Email, telephone, social media outlets like Facebook, WhatsApp, and even chatbots are examples. The challenge is figuring out which ones to use and how to incorporate them into your work.
Only 30% of customers believed corporations created that connection with them, according to research.
Consumers that are emotionally engaged will spend an average of $699 per year with a firm, compared to regular, pleased customers who would spend an average of $275 per year.
Source: Forbes (2)
Getting new clients is a difficult endeavor. It requires a great deal of time, effort, and money. The average customer retention rate across all industries is over 75%.
- In the media and financial industries, retention rates average 84%.
- In the SaaS market, retention rates of more than 50-68% are regarded above average.
- The average company loses 10-25% of its customers per year.
Source: Zippia (2)
People who are devoted to a brand spend 43% more money on it.
Nearly 68 percent of respondents said they are “brand loyal,” meaning they buy from the same company every time, while nearly 40 percent said they adore the company. Almost 56% answered that brand loyalty statistics involve buying from the company even if competitors offer better deals.
Adding music to your marketing increases brand favorability by 46%
The power of music can help you improve your brand favorability and keep your customers coming back for more. Whether you use it in commercials, social media videos, or on your website, don’t discount the way a catchy tune can catch your customers’ attention. As you know, people who love a brand spend more money.
Source: Business News Daily
Over 84% of customers want to shop with companies who have similar values
Values and social causes are more important than ever, and companies can take advantage of that fact. Show your customers that your values and mission align with theirs. Some companies get involved with a charity that supports their own values, or provide ways to donate through loyalty programs.
64% of consumers and 80% of business buyers said they expect companies to respond to and interact with them in real time
Millennials and Gen Z are flooding the consumer marketplace, and their use of technology is shaping how companies create a connection. 66% of Millennial customers alone expect real-time responses and interactions, which is higher than the overall average (64%) and Baby Boomer expectations (62%). If you don’t have a real-time customer service mechanism in place, it’s time to implement one.
Keeping your customers loyal to your brand is perhaps the most important thing you can do as a business owner. Whether it is through offering perks, asking for feedback, or consistently providing exceptional customer service, there are an endless number of ways for your company to build its base filled with loyal customers.
- Yotpo: The State of Customer Loyalty
- SmallBizGenius: 40 Amazing Customer Loyalty Statistics in 2022
- Hubspot: 42 Interesting Stats about Customer Loyalty You May Not Know
- Review 42: 45+ Thrilling Customer Service Statistics [2021 Edition]
- Invesprco: Customer Acquisition vs Retention Cost
- Helpscout: 111 Customer Service Statistics & Facts You Shouldn’t Ignore
- Zippia: 30+ Invaluable Customer Loyalty Statistics for 2023
- AP News: 2019 Merkle HelloWorld Loyalty Report Reveals 54% of Consumers Want Swifter Reward Redemption
- BusinessWire: TCN Consumer Survey Reveals Significant Increases in Brands Being Abandoned for Poor Customer Service
- Midlands Technical College: The True Cost of Poor Customer Service to Your Business
- Qualtrics: ROI of Customer Experience, 2020
- Forbes: The Value of Investing in Loyal Customers
- Hubspot (2): The Hard Truth About Acquisition Costs (and How Your Customers Can Save You)
- BusinessWire (2): #WellActually, Americans Say Customer Service is Better Than Ever
- Forbes (2): Businesses Lose $75 Billion Due to Poor Customer Service
- Zippia (2): 28 Critical Customer Retention Rate Statistics
- Business News Daily: How to Drive Sales Using Sound
- Salesforce: Customer Expectations in the Age of the Customer