The 25 ultimate customer retention stats for 2020
Everyone knows better customer retention increases profits, but how do you retain customers for the long haul — and how much does customer retention really matter to your bottom line? Fortunately for you, we’ve compiled all the research right here into one easy-to-understand digest.
As it turns out, customer retention plays a massive role in profitability, growth, and brand perception. People want to give their loyalty to their favorite brands, but it’s up to brands to provide an experience worthy of that loyalty.
These statistics on customer retention highlight the truths and myths about retention and provide a foundation of facts to help you establish your retention strategy.
Here are the 25 customer retention statistics you need to know:
· Seventy-seven percent of brands could disappear from the face of the world and consumers wouldn’t care. (Vivendi)
· Sixty-four percent of customers say experiences are more important than prices, and that number is growing. (iperceptions)
· Eighty-one percent of consumers make purchasing decisions based on how much they trust the brand. (Edelman)
· Sixty-six percent of consumers would continue to buy from a preferred brand, even when that brand goes against a more innovative competitor. (Edelman)
· Fifty-four percent of American consumers believe most companies need to improve their customer experiences. (PricewaterhouseCoopers)
· Sixty-five percent of American consumers say positive personal experiences are more influential to them than great advertising. (PricewaterhouseCoopers)
Right off the bat, we see that consumers don’t care anything about most of the brands in their lives. If you want to reap the benefits of customer retention, start by making people care about your existence.
How, you ask? The answer seems to be twofold. First, provide excellent customer experiences. Second, be trustworthy. In this age of transparency, consumers hate companies that do one thing and say another.
Communication and engagement
· Ninety-five percent of customers expect businesses to communicate proactively, not reactively. (Loyalty360)
· Customers greatly prefer human-to-human interactions like phone calls (62%), email (46%), and chat (37%) to self-service (14%) or bots (13%) when dealing with issues. (Loyalty360)
· Sixty-five percent of millennials view social media platforms as effective customer service channels. (Microsoft)
· After a poor customer service experience, 20% of people say they would complain on social media about the offending brand. (New Voice Media)
· Thirty-seven percent of consumers would like companies to apologize when service does not live up to expectations. (CallMiner)
· Ninety percent of customers have had customer service troubles while using mobile devices. (Software Advice)
· Thirty-three percent of Americans would consider switching companies over just one bad service experience. (American Express)
Netflix and Amazon have taught consumers to expect personalized and proactive recommendations and communications, but not many brands reach out when something goes wrong. Instead, companies wait for angry customers to call and deal with the problem after the fact. While that strategy may work for a while, customers prefer easy and fast resolutions to their problems. When they don’t get those resolutions, their eyes begin to wander.
· More than 50% of Americans have canceled a purchase because of poor customer service. (American Express)
· On the other hand, 93% of customers are likely to buy again from companies with excellent customer service. (HubSpot)
· Your odds of selling to an existing customer are between 60-70%. For new customers, that figure drops to 5-20%. (Altfield)
· Thirty-seven percent of buyers consider themselves to be loyal to a brand after five or more purchases. (Yotpo)
· Members of loyalty programs spend 12-18% more per year than other customers (Fundera)
· Ninety percent of Americans say they were as loyal or more loyal to their favorite brands in 2018 compared to 2017. (Yotpo)
For all the talk about disloyal millennials, consumers sure do love their favorite brands. Companies with loyalty programs benefit more from loyalists, as expected. You may be surprised to see that most Americans have canceled orders because of the ordering experience, but convenience and simplicity are king today — even above price.
Customer retention starts with brand awareness, continues through the purchase process, and determines whether a purchase becomes a one-time arrangement or a lifelong partnership.
· Happy customers are 87% more likely to purchase upgrades and new services than unhappy customers. (McKinsey)
· Sixty percent of loyal customers will talk about their favorite brands with people in their social circles. (Yotpo)
· Sixty-one percent of loyal customers will make extra efforts to buy from their favorite brands instead of competitors. (InMoment)
· Increasing customer retention by 5% results in a minimum 25% increase in profit. (Bain & Company)
· Returning customers spend an average of 33% more per order than other customers. (Bain & Company)
· Forty-three percent of American consumers spend more money at businesses to which they are loyal. (Accenture)
Here’s the big reveal: loyal, happy customers spend more money. Shocking, isn’t it? Loyal customers don’t just spend more, though. They also help companies grow via word-of-mouth marketing, which saves on costs while boasting an impressive conversion rate. Returning customers also spend more per order, magnifying the impact of their order volume.
Now that you know just how important customer retention is, how will you adjust your strategy to keep more of your existing customers? Do you have enough content to keep people interested and an offboarding process that prevents problems before they become catastrophes?
Take a look at every facet of your business and consider how a focus on retention could make a difference.