It’s no secret that acquiring new customers is becoming more and more expensive. Ad costs aren’t slowing down any time soon. That’s why customer retention is not something you can afford to overlook.
Maybe you’re already making strides in rolling out a customer loyalty program but want to see how your efforts are performing relative to your specific industry or Ecommerce in general.
We’ll share some customer retention statistics below, including the average rate of customer retention (between 55-85%), how much more existing customers spend than newcomers (67%), and most importantly, what influences customer retention.
If after reading through these customer retention stats you realize you’re leaving money on the table, you’re in luck. Our Shopify loyalty program can help you make the most of every customer you acquire with a seamless solution for nurturing relationships.
Why prioritize customer retention?
There are a seemingly endless number of things you can focus on improving for your brand - what makes customer retention worth prioritizing? Once you read our statistics on customer retention it will become crystal clear why this is so important.
The short answer: it will directly improve your bottom line.
Just think about how much you pay to acquire a new customer and how much effort goes into that first interaction. It’s far cheaper to sell to a customer that’s already purchased from your brand.
They’re easier to keep happy, and most importantly, they’re more likely to buy again. That’s where real growth happens.
But it isn’t just about keeping loyal customers coming back for more. These same brand fanatics are likely to tell their friends, family, and colleagues about you. This can stir up more business through word-of-mouth marketing, which still has its place in 2024.
You’re at the mercy of algorithms, ad spend, and the competition when you’re always chasing new customers. On the other hand, brands with high retention don’t stress about where the next customer will come from. They’re too busy looking for new ways to service their existing base.
But the truth is you likely won’t appreciate the power of loyalty until you read through some compelling customer retention statistics. Let’s dive into the numbers.
20 customer retention statistics that illustrate the power of loyalty
We’re not going to lull you to sleep with hundreds of statistics on customer retention. Instead, we’ll share 20 reasons you should invest more heavily in retaining your customers. You’ll also see a few customer retention stats that clue you into how you can improve your own figures:
- Retaining customers costs 5x less than acquiring new ones.
- A 5% increase in customer retention can boost profits by 25% to 95%.
- Loyal customers are 50% more likely to try new products and spend 31% more than new customers.
- The probability of selling to an existing customer is 60-70%, while the probability of selling to a new customer is only 5-20%.
- 89% of marketers use email marketing for customer retention.
- 83% of consumers say a loyalty program makes them more likely to continue doing business with a brand.
- 61% of customers would switch to a competitor after just one poor customer service experience.
- 65% of consumers say that loyalty program signups are motivated by emotional connections to a brand.
- 96% of consumers say customer service is an important factor for brand loyalty.
- Loyalty programs can increase revenue by 15% to 25% annually.
- Customers who receive personalized experiences are 60% more likely to become repeat buyers.
- 45% of businesses prioritize customer acquisition over retention, even though retention is cheaper.
- Loyalty programs have seen a 24.6% increase in customer participation over the past five years.
- 74% of B2C companies have a 12-month customer retention rate of around 74%, while B2B companies see about 82%.
- A 1% rise in customer satisfaction can boost retention by 5%.
- 84% of consumers are likely to stick with a brand that offers a loyalty program.
- Loyal customers can account for up to 65% of a company’s business, even though they represent only a small percentage of total customers.
- Companies that improve personalization efforts in loyalty programs can see up to a 10% growth in customer retention.
- 64% of consumers are willing to spend more on a brand that remembers them and offers a personalized experience.
- 86% of loyal customers will recommend the brand to their friends and family.
The numbers don’t lie - it’s well worth boosting your customer retention efforts. We’ll show you how below.
Customer retention statistics by industry
Maybe you came here to read up on customer retention stats in order to benchmark your brand’s performance. Every niche is unique as are its customers and their behavior. Still, we’ve managed to find a few statistics on customer retention for these industries:
- Media and Professional Services: 84% retention rate - Long-term client relationships and recurring services give these brands an edge over the field.
- Automotive and Transportation: 83% retention rate - Regular maintenance, service plans, and warranties all contribute to a higher rate of retention.
- Insurance: 83% retention rate - Customers stick with insurers they trust. Let’s face it, the effort required to switch providers isn’t usually worth it either.
- IT Services: 81% retention rate - The need for continuous IT support makes it difficult for businesses to even think about switching providers.
- Financial Services: 78% retention rate - Customers stay with financial institutions they trust, especially those offering personalized digital experiences.
- Telecommunications: 78% retention rate - Bundled services and consistent support help keep telecom customers loyal.
- Healthcare: 77% retention rate - Long-term, personalized relationships in healthcare are the primary reason for a high retention rate.
- Retail: 63% retention rate - High competition and consumer options make retail one of the lower retention industries.
- Hospitality, Restaurants, and Travel: 55% retention rate - Seasonal demand and competition hold back retention in these industries.
Now, if you are less than satisfied with your own customer retention stats relative to these industry standards, there could be any number of reasons. It’s not easy to compare your brand to industry averages, it won’t be apples to apples.
Tips on building out your customer loyalty program and improving statistics
Before we wrap up our guide to customer retention stats we want to leave you with a few tips on getting started building out your own program and maximizing all the benefits it has to offer.
Make your program easy to join and use
From sign-up to point redemption, every step should be simple and straightforward. The less friction involved from the customer's perspective the more likely they are to participate. Rivo allows customers to join with a single click.
Personalize the experience
Think back to one of the customer retention statistics we rattled off earlier…61% of consumers are willing to spend more on a brand that remembers them and offers a personalized experience.
This means it’s worth the effort to tailor the program to each customer’s preferences. You should use data to offer personalized rewards based on shopping habits or other customer insights. If it feels cookie-cutter, the customer likely won’t opt in.
Incentivize more than just purchases
We know you are interested in driving the bottom line, but you should look for other ways to leverage your loyalty program. Rivo supports this through custom actions you can create.
From writing reviews to referring friends and engaging on social media, there are many ways to reward loyalty - each of these moves the needle in its own way!
Create a tiered system for VIPs
This motivates customers to stay engaged and spend more to unlock exclusive benefits. It gives your most loyal customers something to aspire to and creates a sense of exclusivity. This is baked into the core of Rivo’s platform.
Track and adjust regularly
A good loyalty program isn’t set-it-and-forget-it. You need to continuously track the performance of your program. This means monitoring key statistics on customer retention like repeat purchase rate and customer lifetime value.
Rivo makes it easy to view and analyze all loyalty data in one place so you can form data-driven decisions that squeeze all the potential out of your program.
Promote your program at key touchpoints
How can a customer take advantage of your loyalty program if they don’t know it exists? Whether on product pages, at checkout, or via email, remind customers of the benefits they can receive.
Wrapping up our guide to statistics on customer retention
The customer retention statistics we’ve unveiled today should leave you with a crystal clear understanding of why a loyalty program is worth incorporating into your brand.
Simply put, it will grow your bottom line at a far more efficient rate than trying to scale through customer acquisition. Plus, it takes just a few clicks when you leverage the Rivo platform.
We’ve made it as quick and easy as possible to create a seamless, personalized experience for your customers that will raise AOV and LTV. We also have a powerful Shopify referral program that allows you to turn brand advocates into acquisition channels, effortlessly growing your business through word-of-mouth.
While there are many loyalty program providers at your fingertips, you can trust that you’re getting the best value with Rivo. See how we compare:
