Customer loyalty is the result of consistently positive emotional experiences that includes the product or services where both work together to deliver superior value.
How much value does a loyal customer represent to a company? How does a company secure loyal customers?
Here are 40 facts that explain customer loyalty worth and how to make it work for your company.
What’s a loyal customer worth
- Loyal customers are worth up to 10 times as much as their first purchase.
- The probability of selling to a new customer is 5-20 percent, while selling to an existing customer is 60-70 percent.
- 1 in 3 customers will pay more to receive a higher level of service.
- After the original purchase, the likelihood of a customer making a second purchase is close to 30%, and after they make a second purchase the likelihood of a third jumps past 50%.
- Increasing customer retention by 2% can have the same impact as reducing costs by 10%.
- Majority of a customer’s 365-day CLV is realized within the first 30 days as a customer. 65% is realized on day 1, and that grows to 79% by the three-month mark.
- The cost of bringing a new customer to the same level of profitability as an existing one is up to 16 times more.
- Consumers spend up to 17% more with companies with excellent service.
- Millennials are willing to spend up to 21% more with companies for great service.
How to make it work – Give special status, surprise them, offer something exclusive with an experience that exceeds their expectations
- 92% of loyal customers rank price and value as the top driver for loyalty to specific retailers, followed by product/quality at 79% and variety/selection at 71%.
- 91% of consumers would reward a brand for its authenticity, and 62% say they would either purchase a product from a brand they deem to be authentic or express greater interest in buying from that brand in the future.
- 86% of Gen Xers and 85% of Baby Boomers would switch retailers immediately if customer service is poor.
- 81% of consumers agree that loyalty programs make them more likely to continue doing business with a brand.
- 81% of U.S. consumers feel loyal to brands that are there when they need them, but otherwise, respect their time and leave them alone.
- 80% of companies spend less than 30% of their time and budget on customer retention-focused messaging.
- 75% of companies see a return on investment from their customer loyalty program.
- 74% of Millennials would switch to a different retailer if they had poor customer service.
- 73% of customer loyalty club members are more likely to recommend and say good things about brands with good loyalty programs.
- 71% of shoppers say they would be more likely to use their loyalty cards if they could access these cards and rewards from their mobile phone.
- 66% of Millennials indicate that they are more likely to shop from stores where they are part of a loyalty program.
- 63% of U.S. consumers say they’d share more personal information with a company that offers a great experience.
- 62% don’t believe that the brands they’re most loyal to are doing enough to reward them.
- 61% of online shoppers chose receiving surprise perks and discounts as their preferred personalized experience
- 59% of US online adults who are members of a customer loyalty program say that getting special offers that aren’t available to other customers is important to them.
- 58% of adults don’t trust a brand until they have seen real world proof
- 58% of customers join loyalty programs to save money and 38% to receive rewards.
- 57% spend more on brands or providers to which they are loyal.
- 56% of high-income consumers feel less loyal to brands now than they previously did.
- 54% say they would consider increasing the amount of business they do with a company for a loyalty reward.
- 51% of U.S. consumers are loyal to brands that interact with them through their preferred channels of communication.
- 50% of consumers said they were willing to give a retailer a second and third chance, with 50% abandoning brand loyalty only after the same mistake was made more than twice.
- 50% of U.S. consumers said they switched companies they buy from this year because of poor customer experience.
- 48% say that the most critical time for a company to gain their loyalty was when they make their first purchase or begin service.
- 42% of consumers distrust brands.
- 41% of U.S. consumers say they ditched a company because of poor personalization and lack of trust.
- 39% higher basket size of a customer in company’s loyalty program than a customer that isn’t.
- 37% of consumers trust brands less than they used to, compared to only 7% who trust brands more than they used to.
- 29% of customers shop around, but ultimately repurchase from the same brand.
- 13% of customers are loyalists, who don’t shop around.
- The average U.S. household has enrolled in more than 18 customer loyalty programs, but is only active in 8.4.
Do these facts explain what customer loyalty is worth to you? Do they give you an idea of what your company should do? Are you ready to get started?