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LOYALTY · 

8 MINUTES

73 Compelling Customer Loyalty Facts for 2022

 
CORMAC O'SULLIVANPIGGY

Achieving customer loyalty can be an elusive feat. With so many different bases to cover and variables to account for, we're here to convince you that putting loyalty first is worth the effort. Plus, with the right software, creating a loyal customer base is a breeze. We've handpicked 73 of the most compelling customer loyalty statistics and structured them into different themes, so you can identify and implement the best moves for your business.

Customer Loyalty: Loyalty & Profitability Statistics

When making a business decision, the deciding factor upon conclusion is usually how profitable the move will be, especially in the long term. The facts and figures below outline the impact that achieving loyalty can have on your bottom line, both long term and short term.

  • The average return customer will have an average purchase value of +67% in months 31-36 of their relationship in comparison to months 0-6.
    This is testament to the importance of engagement in customer loyalty programs. Engagement leads to longevity, longevity leads to loyalty and increased lifetime value.

  • Loyal customers are generally worth over 10x their original purchase.
    Again, this highlights the importance of focusing on long-term loyalty as opposed to short term fast selling.

  • Increasing customer retention processes and efforts can increase profits by as much as 25-95%.
    Customer retention is also cheaper, as it uses existing data and free communication channels, such as email.

  • 80% of revenue comes from the top 20% of customers.
    The all-important Pareto principle has been a pioneering statistic in customer loyalty from the beginning.

  • Boosting customer retention by just 5% can increase your revenue by as much as 25%, or more.
    Not to mention, the extension of a given customer's lifecycle also leads to increased spend with time - win-win.

  • A 7% increase in loyalty can lead to an 85% increase in lifetime profit per customer.
    The potential here is even greater when it comes to B2B. Not only does loyalty increase profitability individually, but it also boosts referrals, which increase lifetime profit even further, all while quashing acquisition costs.

  • Businesses have a 70% chance of selling to an existing customer, while this becomes just 5-20% for new prospects.
    Another reason to prioritize customer retention over acquisition - cost effective and higher success rates.

  • Customer lifetime value is significantly and positively affected by brand relationship and brand equity.
    Customer lifetime value is one of the key metrics that determine how loyal a customer truly is and how much you should invest in the rewards you provide them.

  • 81% of marketers say tracking CLV boosts sales.
    Tracking fluctuations in CLV allows you to track when customers are “at-risk” or may be in need of a little TLC.

  • 73% of companies depend on current customers more than developing new markets.
    This is an interesting one. While 73% of companies rely on existing customers more than new ones, how many focus on and invest in existing customers more than new ones? A question worth asking for marketing and customer experience managers.

  • 60% of customers are more likely to buy from a brand they are loyal to than a brand they don’t know.
    This isn’t really any surprise. The challenge lies in actually creating the loyalty in the first place. However, once you’ve achieved true loyalty and engagement, your customers shouldn't be going anywhere.

  • 80% of companies use email marketing as their primary customer retention strategy.
    After everything we’ve seen about the variety, personalization and experience that customers expect, it gives little hope to see that the main customer retention strategy around is email marketing.

  • 77% of people surveyed said they stayed loyal to a brand for 10+ years.
    Despite the previously pessimistic statistics, this is actually no surprise. Once consumers find a brand they love, they remain loyal and can put up with a limited amount of bad experiences. The catch lies in what it takes to achieve true loyalty in the first place.

  • 77% of brands could disappear without anyone caring.
    When this is the case despite customer loyalty programs being part of life for approximately 71% of consumers, something has gone amiss in the alignment of marketing activities with customer expectations and preferences.

  • Loyal customers are 500% more likely than their counterparts to purchase a product, 4 times as likely to refer a friend, and 7 times as likely to try out a new product.
    500% more likely sounds pretty convincing to us, along with the fact that referrals are the best form of customer acquisition.

  • It can be as much as 16 times more expensive to bring a new customer to the same level of profitability as an existing loyal customer.
    Makes sense. Rather than finding a new customer, acquiring them, nurturing them to become a loyal customer and then maintaining that, all you have to do is keep a current customer happy.

  • 57% of a consumer’s purchase decision is complete before you ever interact with them.
    Be careful of what you’re putting out there. Certain small things can be the difference between making a sale and not making a sale - and you would never even know it.

  • Research reveals that more than one-third of customers believe they are loyal to a brand after five purchases or more.
    Interestingly, this is in the opinion of customers as opposed to retailers or brands. Although there’s no set time frame within which the 5 purchases should take place, this depends entirely on industry - the closer together, the better though.

  • Consumers are flexible with switching, and have reported value, availability and convenience as their main reasons for switching.
    Value is a very broad term here, but it should be. Value is no longer about just price or quality, but also the experience, the information & support provided to customers prior and subsequent to purchasing, and the post-purchase resourced afforded to them.

  • When it comes to the likelihood of making a sale, it's 60-70% for existing customers and only 5-20% for new customers.
    If you approached every sale based on the likelihood that you would convert, how many sales processes would you commit fully to? This isn’t advice against trying to convert everywhere possible, but rather a word of warning about who to approach and how to approach them when you are aware of their likelihood to convert.


Customer Loyalty: Communication and Brand Advocacy Statistics

Communication is the crux of any relationship - particularly two way communication. Using your own communication channels, your customers' and promoting brand advocacy among customers effectively can make a huge difference to your business and your loyalty. Take a look below at how you can use communication to your advantage - especially with the right software in place.

  • Customers acquired through referrals have a 37% higher retention rate than their counterparts, while being 81% more likely to engage when the brand has a loyalty program.
    Word of mouth has always been one of the best but one of the hardest forms of advertising to execute. However, with rewards for referrals, it’s easier than ever to get the word out.

  • Word of mouth has been shown to increase marketing efficacy by as much as 54%.
    We told you - it’s effective.

  • 60% of customers make a subsequent purchase if they have a positive experience.
    Customer experience is gaining more and more priority in the world of customer loyalty and marketing.

  • Consistent and clear brand communication has been shown to increase revenue by as much as 33%.
    Consistency here is not only about frequency, but also how coherent and cohesive your branding is throughout your communication with customers.

  • Positive reviews can increase purchase likelihood by up to 380%.
    Incentivize customer reviews by rewarding them and give your brand even more credibility.

  • Positive reviews significantly contribute to customer loyalty via customer satisfaction.
    Reviews - and not only positive reviews - contain a wealth of information and can be extremely useful for consumers trying to make a purchase decision.

  • 86% of customers are willing to pay a price premium in return for a more customized and smooth customer experience.
    Like we said above, customer experience is becoming a more important factor than any other in an age where customers are given more choice than ever before.

  • Purchases from social channel referrals were up 104% in 2020 on the previous year.
    This fact is twofold - engagement has to be taken multichannel and cannot only exist in “sales” channels. Secondly, word of mouth and social sharing is more valuable now than ever.

  • When loyal to your business, 66% of consumers will write a positive review, while 46% will continue their loyalty despite a bad experience.
    Everybody slips up sometimes, so it’s reassuring to know that customers won’t ditch you for the slightest thing.

  • 92% of consumers trust brand advocates more than advertising.
    This works for the same reason that referrals work so well. Consumers have lost trust in advertising, seeing most things as marketing fluff when assessing product features or quality. In contrast, they’re very happy to purchase when an “impartial” party is convincing them.

  • 70% of customers are willing to leave more positive reviews in return for points or other rewards.
    Now this really isn’t a surprise. While this isnt exactly groundbreaking in the sense that you should be wowed that you can essentially pay for reviews, but it’s to show how easily you can gather reviews, which are in turn extremely powerful for your business.

Customer Loyalty: Discount & Purchase Behavior Statistics

Let's be honest, everyone's a sucker for a bargain. But how persuasive can a discount or coupon really be? We've collected the top industry facts and figures below to give you an idea of the efficacy of coupons and discounts, along with how you can use them to grow your business.

  • 83% of people reported that discounts and coupons change their purchasing behavior.
    When done correctly, discounts and coupons can increase purchase intention and average order value significantly.

  • As much as 93% of people use coupons throughout the year.
    While many people see coupons as outdated, the reality is they’re as modern as ever - as long as you digitalize them.

  • A fair price motivates 64% of consumers to try a new brand.
    Consumers have so much choice (but also similarity) in products nowadays that they have become even more price sensitive. Counter this with customer experience, which has become even more important than price nowadays.

  • A whopping 41% of consumers said that free shipping would convince them to try a new brand.
    People are suckers for a little freebie. Think of beyond just free shipping, such as free extras like a complementary cup of coffee or something else more in line with your brand.

  • 87% of consumers said they actively search for deals on a regular basis.
    We told you - consumers are more price sensitive than ever before. If there’s nothing to differentiate your brand from another, price will be the deciding factor.

  • Research has shown that 83% of people are likely to click on an ad containing a discount or promotion.
    Careful - all we said is they’ll click on it. You have to stimulate customers beyond offering discounts in order to achieve customer loyalty on a prolonged basis.

  • In a 2021 survey, 80% of millennials and 75% of baby boomers said they prefer to be rewarded for engaging with brands.
    Utilize gamification marketing to engage customers beyond just within the purchasing stage.

  • Switching brands and trying new products in order to maximize discounts and rewards is something that 66% of customers do on a regular basis.
    This demonstrates the power of loyalty programs. Make your rewards frequent and personalized while using gamification to achieve this within your customer base.

  • Consumers using coupons spent 46% more at checkout than those not using coupons.
    How much does a coupon usually take off? 30% at most? If a customer spends 46% more on average and are getting a maximum average of 30% off… we’ll let you do the math, but it looks pretty nice.

  • Over 40% of millennials look for coupons or discounts on a weekly basis.
    They’re also more likely to redeem and search for coupons online, which is an emerging trend for the FMCG industry, where millennials purchase significantly more frequently than older generations.

Customer Loyalty: Personalization & Engagement Statistics

Personalization is now more important than ever. Customers no longer just want personalized or customized offers - they expect them. The good news is that personalization and customer experience are worth paying for in the eyes of customers. Take a look below to get an idea of the state of personalization in loyalty and CRM now, along with how you can operationalize certain insights to take your customer experience to the next level.

  • 52% of customers expect consistent personalization in the offers they receive.
    This doesn't only apply to personalization. Customers expect consistency in everything thrown their way, and one of their biggest expectations is personalized offerings.

  • Only 2 in every 10 consumers are satisfied with the level of personalization or customization that they’ve received within their loyalty programs.
    It keeps coming back to customer experience. Personalizing and customizing both your rewards and communication will enhance the customer experience to a point whereby you won’t have to worry about return on investment anymore.

  • Maintaining existing customers can increase your customer database by up to 100%, while this data can be used to boost your CRM efforts.
    Data is your best friend when it comes to successful loyalty programs. Personalize perfectly, set context-based triggered messaging and forecast for future periods.

  • Customers expect something in return for their attention - 75% of engaged customers that identified as highly loyal said they expect their top retailers to deliver a differentiated shopping experience.
    Consumers also expect originality. Beyond price and product, what can you provide? Now, how is that different? If you can answer both of these questions confidently, you’re on the right track.

  • Only 20% of companies surveyed by Forrester reported having the appropriate technological infrastructure and data integrations to deliver the experience expected by customers.
    This shouldn't come as a surprise if you’ve read everything else. Due to loyalty programs being so widespread without the appropriate infrastructure, it’s led to incredibly high membership levels and extremely low engagement and redemption levels.

  • There’s disparity between the opinions of customers and marketeers - 90% of marketers report providing personalized customer experiences, while only 40% of consumers see that as the case.
    Much like the latest statistic, this one highlights how far off many marketers are from meeting - or even knowing - customer pain points and expectations.

  • Accenture found that 48% of consumers expect special treatment in return for their good custom.
    Within the report, intelligent personalization was the number one business case mentioned in the realm of customer expectations.

  • 86% of customers say that an emotional connection with a customer service agent would encourage them to continue purchasing from the company.
    Creating an emotional connection, or even reaction, will put your brand a country mile ahead of your competitors. Why? The main point in which companies are lacking is engagement. What creates engagement? An emotional, cognitive, even physical reaction from your customers.

  • Almost 60% of top companies draw parallels between employee performance and customer experience.
    Whether 60% of companies think it or not, there is absolutely a correlation between employee performance and customer experience. Training and facilitating employees to give the best customer experience possible is something that has allowed companies such as SWA to be incredibly successful in achieving loyalty.

  • 66% of consumers feel as though they’re treated as a number rather than an individual in the way they’re targeted.
    Personalization is not where it should be in many customer loyalty programs. Customers have experienced certain programs that have targeted and personalized perfectly, which has left them with expectations that many companies cannot meet with basic loyalty or marketing tools.

  • Microsoft found that 77% of consumers favor brands that ask for and accept customer feedback.
    Everyone loves seeing a bit of themselves in somebody else or something else - so why not make it your product that they see themselves in? Jokes aside, customer feedback and complaints can be extremely valuable for product research and development.

  • 50% of consumers say that it’s the service quality that keeps them coming back.
    Service quality, customer experience, whatever you want to call it - it’s the cornerstone of customer loyalty in any business, regardless of how customer centric or not you may think your business is.

  • 53% of customers report feeling an emotional connection to their favorite brands.
    Creating an emotional connection, or even reaction, will put your brand a country mile ahead of your competitors. Why? The main point in which companies are lacking is engagement. What creates engagement? An emotional, cognitive, even physical reaction from your customers.

  • 84% of customers are loyal to brands that express and share their values.
    Similar to the point of incorporating customer feedback, this comes as no surprise. Essentially, show every customer the closest thing to a second version of them that you can count on a sale.

  • 78% of customers prefer omnichannel engagement.
    With customer experience being a growing factor, the coherence and breadth of engagement opportunities across channels is being judged more than ever before by customers.

  • 64% of customers expect brand engagements and interactions to be tailored based on previous interactions.
    Customers expect something truly valuable in return for their loyalty, and top of the list of their priorities is a tailored customer experience. Use context-based triggers to make sure your communication is as relevant as possible.

  • Revenue per user has been increased by 166% through the use of ‘next best action’ personalization tactics.
    Next best action personalization ensures that your messaging is both personalized as well as on-time and fitting in terms of context, boosting redemption and engagement rates significantly.

Customer Loyalty: Loyalty Program & Rewards Statistics

As you've probably noticed by now, loyalty programs have the potential to be a huge asset to your business - but only when used correctly and committed to. Check out how other companies have used loyalty programs below, both to great effect and dismal effect.

  • 50% of customers change their habits just to graduate to a higher loyalty program tier.
    This isn’t just the power of loyalty programs, but also the power of gamification within them. While tiers are a great way of segmenting customers, they also provide a basic but effective base for gamification.

  • Customers are fatigued after loyalty program membership has reached an average of 14 per consumer, but they only engage with less than half of these programs on average.
    Loyalty program membership has gotten out of control. Why? Customers join, get a disappointing experience, never redeem again, and repeat with another disappointing loyalty program. Make it interesting, motivating and worth your customers’ while - otherwise, don’t do it.

  • 75% of customers say they would switch companies for a better program.
    This comes as no surprise, as loyalty program membership is bound to overlap within industries when you realize that 71% of consumers are active in an average of 13 programs and only actively use less than half of them.

  • The CAGR for the loyalty programs market is set to hit 12.6%, for a value of $142636.8 million in 2022.
    There’s a reason for this. While loyalty program membership is at an all-time high, the market is finally in a state of quasi-improvement, as technology improves and facilitates more comprehensive customer loyalty programs.

  • 86% of retailers that offer rewards within the first week of acquiring a customer say that their customers shop at least once a week on average.
    These guys are doing it right. Don’t give away immediate rewards or free things, but make your first reward fast and make it enticing. Getting the ball rolling is the biggest battle when it comes to achieving engagement with your program.|

  • Members that do not redeem within the program are 2.3x more likely to defect than customers with just 1 redemption.
    Getting the ball rolling is the worst part. As we said, once you’ve managed to get somebody signed up to your program, it should be a downhill battle due to the tools you then have to nurture loyalty within the relationship.

  • 20% of loyalty program members have never made a redemption.
    20% have never made a redemption, 50% are completely inactive. In reality, this should be rephrased to say that businesses have failed to attract a loyalty redemption from 20% of their customers

  • 60% of customers say that they would be encouraged to join a premium loyalty program if instant rewards were offered.
    Customer experience is gaining more and more priority in the world of customer loyalty and marketing.

  • For companies with both a free and premium loyalty program option, 65% of customers will be likely to join the premium version if they’re already a member of the free version.
    This is why tiers are so effective as a method of gamification. They require one initial set-up, after which they can bring an element of gamification without any real tweaks. Never underestimate what a small challenge will bring out in people!

  • 75% of companies receive a ROI from their loyalty program, while only 6% report no ROI.
    75% of companies having a return on their investment in customer loyalty is quite an inspiring statistic - especially when the likelihood that 75% of companies have constructed a high quality program is very low.

  • Customers engaged in a loyalty program spend 18% more than non-members per year.
    In fact, purchase frequency actually increases by 12-18%, and the average spend per order increases by an average of over 4%. Not bad, right?

  • 90% of businesses say that expanding their loyalty program is a priority.
    Loyalty programs done correctly are a gold mine - for you AND your customers. Create enticing rewards, fun gamification, engaging emails and more to master the loyalty game.

  • 69% of customers report being more likely to join a loyalty program if there’s a mobile app available.
    A lot of consumer decisions nowadays come down to convenience. You know what’s inconvenient? Carrying around 20 different paper coupons to save a bit of money. Having an app and digitalizing your program will do wonders for your redemption and membership rates.

  • 78% of customers are more likely to buy from a brand if there’s a loyalty program available.
    While this is a promising statistic, it’s not all sunshine and rainbows. Loyalty programs are notoriously good for customer acquisition, but the real challenge is keeping the momentum up after the first purchase.

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