Loyalty By the Numbers: Top 63 Customer Retention Statistics for 2022

by Tracy Chaplin |

Companies Need Loyalty More Than Ever

Let’s face it, getting a decent night’s rest these days is tough. Chances are counting sheep doesn’t even work when you’re tossing and turning over lingering COVID, the war in Ukraine, soaring gas prices, inflation at an all-time high, and a recession threatening to strike any day.

The silver lining is that an effective customer loyalty program goes a long way toward keeping your brand strong during these uncertain times and positioning you for success when the economy recovers. In fact, history has proven that loyalty programs are beneficial during financial crises.

Learn more about why you should be investing in loyalty right now. Read our guide, Breaking Through Market Barriers: Unleash the power of customer retention during economic uncertainty.

We’ve compiled a list of eye-opening customer retention statistics for 2022, organized by key topics, to demonstrate the importance of putting a fence around, recognizing, and rewarding your best customers.

Most Important Customer Retention Statistics for 2022

 

Loyalty’s Impact on the Bottom Line

The 80/20 rule applies to loyalty, that is, 80% of your business is coming from 20% of your customers. As we hit hard times, we need to know who these people are, so we can make sure they’re engaged, connected, and committed to our brands. You’d be amazed at how significantly retention multiplies your profit.

  1. 80% of your profits come from just 20% of customers. (Source: Forbes)
  2. Customer acquisition costs (CAC) are nearly 70% higher for B2B companies and more than 60% higher for B2C companies than they were 6 years ago. (Source: Profit Well)
  3. 82% of business leaders state that customer retention is more cost-effective than new acquisitions. (Source: Econsultancy)
  4. The average customer retention rate for more than half of all industries is below 50%. (Source: SurveySparrow)
  5. 48% of consumers want brands to begin winning their loyalty from the first purchase. (Source: SiliconANGLE)
  6. 43% of customers spend more with brands they’re loyal to. (Source: Fundera
  7. Customers engaged in loyalty programs spend 12% to 18% more than non-members each year. (Source: Accenture)
  8. Our research found that top-performing loyalty programs can boost revenue from customers who redeem points by 15 to 25% annually, by increasing either their purchase frequency or basket size, or both. (Source: McKinsey & Company)
  9. A 7% increase in brand loyalty can increase the customer lifetime value of each client by 85%. (Source: Microsoft)
  10. Loyal customers make purchases 90% more frequently. (Source: Squarespace)
  11. 58% of those enrolled in a loyalty program in the US buy at least once a month. (Source: Peppybiz)
  12. Your most loyal customers (top 10%) spend 3X more than the other 90%. (Source: Inc.com)
  13. It costs 16X more to get new customers to the same spending level as current ones. (Source: MarTech.Zone)
  14. Attracting new customers is the top goal for brands investing in customer loyalty strategies. (Source: Harvard Business Review)

 

Churn

Most companies see churn as an acquisition problem, trying to attract twice as many customers to make up for the ones that leave. But it’s much more cost-effective to address churn as a retention challenge. You’ve already spent good money on acquiring new customers. Capitalize on that investment by giving these new customers good reasons to stick around. Learn more about what causes churn and how to reduce it.

  1. Without a loyalty initiative, only 20% of first-time customers will make a second purchase. (Source: Zodiac)
  2. Reducing your customer churn rate by just 5% can boost profitability by 25% to 95%. (Source: Harvard Business Review)
  3. Businesses in the US lose $33.5 billion yearly due to churn. (Source: CallMiner)
  4. 69% of customers leave because they believe you don’t care about them. (Source: RightNow)

 

Engagement

Engagement is key to building emotional bonds that lead to lasting customer relationships. Loyalty programs give you plenty of reasons and opportunities to engage your customers and add value. Annex Cloud’s Loyalty Experience Platform™ offers the widest range of engagement modules.

  1. Customers who interact with your brand as well as transact spend 250% more than those who only transact. (Source: Annex  Cloud)
  2. Fully engaged customers buy 90% more often, spend 60% more, and are 5X more likely to indicate exclusive loyalty. (Source: Rosetta Consulting)
  3. Persistent digital engagement will become the norm, with 70% of marketers adopting an “always-on” digital engagement strategy in 2022. (Source: Forrester)
  4. While a typical active loyalty program member spends 10% more than someone who is enrolled but not active, members who redeem rewards spend 25% more than enrolled but inactive members. (Source: McKinsey & Company)

 

Data & Personalization

We’ve been talking about personalization for decades and yet the vast majority of brands are still at the walking stages. Loyalty programs collect unique zero- and first-party data points that round out your customer profiles. Annex Cloud’s loyalty technology pushes that data across your text stack enabling you to add meaningful value at every customer touch point.

  1. 61% of high-growth companies are shifting to a first-party data strategy. (Deloitte)
  2. Only 14% of organizations have achieved a 360-degree view of their customers, and 82% said they aspire to attain this goal (Source: Gartner)
  3. 88% of CMOs plan to invest in first-party data capture and management in 2022. (BCG)
  4. 89% of digital professionals say they’re investing in personalizing the customer experience but only 40% of consumers feel relevance from brands (Source: Forrester Principal Analyst Brendan Witcher)
  5. Only 33% of eCommerce businesses provide a personalized experience on their website. (Source: Mapp Digital)
  6. 51% of high-growth brands are deploying first-party data in delivering personalized content via dynamic creative optimization. (Source: Deloitte)
  7. 71% of consumers expect companies to deliver personalized interactions and 76% get frustrated when this doesn’t happen. (Source: McKinsey & Company)
  8. Less than 25% of loyalty programs are personalizing member experiences based on previous interactions, purchase history, and stated or inferred preferences (Source: Deloitte)
  9. Fast-growing companies drive 40% more of their revenue from personalization than their slower-growing counterparts. (Source: McKinsey & Company)
  10. 80% of buyers are more likely to make a purchase when brands offer personalized experiences (Source: Fresh Works)
  11. 78 % of consumers are more likely to make repeat purchases from companies that personalize. (Source: McKinsey & Company)
  12. 20% of customers are more likely to be loyal to an online retailer that personalizes emails based on customer data. (Source: Fresh Relevance)
  13. 75% of American consumers say they’re more likely to be loyal to brands that understand them on a personal level (Source: Acquia)
  14. Done correctly, behavioral segmentation becomes the foundation for creating personalized customer experiences. Such initiatives have yielded increases of 10 to 20% in customer acquisition, 10 to 15% in long-term value and retention, and 20 to 30% in satisfaction and engagement. (Source: McKinsey& Company)

 

Rewards

While rewards are certainly a big part of any loyalty program, they don’t have to be about points, discounts, or gimmicks—they’re a vehicle to create a value exchange and today’s consumers are looking for value. That means brands making things more convenient, saving them time, and improving their lifestyle. It’s equally valuable to recognize your customers—with a thank you, or a timely, relevant message that shows them you’re paying attention and know what matters to them. Take grocery shopper Mary, for example, who happens to be a gourmet cook with a family and a busy job. Sending her recipes that meet the dietary needs of her and her family, including an online shopping list where she can simply check the items she needs, and offering same-day delivery—now that’s value.

  1. Research showed only 31% of consumer loyalty programs allow members to earn through non-transactional means. (Source: Deloitte)
  2. Taking too long to earn rewards is the most common reason consumers dislike a loyalty program. (Source: Loyalty Magazine)
  3. Disappointing rewards are the top reason millennials abandon customer loyalty programs. (Source: Statista)
  4. 75% of consumers feel that incentives encourage them to make another purchase. (Source: Wirecard)
  5. 29% of customers want early access to sales or limited editions. (Source: Fresh Relevance)
  6. When companies provide a points-plus-cash option, redemptions sometimes increase by 20 to 25%. When correctly accounted for, it can be a game-changer for overall program profitability. (Source: McKinsey & Company)
  7. 68% of respondents said they found it helpful when a brand they regularly shopped with provided them alerts when items go on sale. (Source: Deloitte)
  8. 82% of organizations have or plan to have a “value enhancement strategy” to help promote business growth. (Source: Gartner)
  9. Consumers are twice as likely to spend money on a brand with a paid loyalty program over a free loyalty program. (Source: McKinsey & Company)
  10. 60% of consumers spend more on a brand if they have a paid loyalty membership vs. 30% for free programs. (Source: McKinsey & Company)

 

Aligned Values

Today’s consumers expect so much more from brands. A good product or service, convenience and even a good experience isn’t enough. Consumers want to know the companies they’re loyal to stand for something and contribute to the greater good, especially causes that matter to them as well.

  1. Two out of three Americans said their social values now shape their shopping choices. (Source: McKinsey & Company)
  2. Purpose-driven consumers who choose products and brands based on how well they align to their values now represent the largest segment (44%) of consumers. (Source: IBM)
  3. Consumers have become more concerned with a brand’s social impact. 88% of consumers want businesses to help them make a difference. (Source: Forbes)
  4. 70% of customers want to know how the brands they support are addressing social and environmental issues. (Source: Loyalty360)

 

Referrals, Advocacy & Influencers

Referrals are one of the most cost-effective ways to gain new customers. And they convert at a much higher rate and typically spend more. Loyal customers feel an emotional connection and tell others about their experiences. If you’re wondering how to get more of your customers to send others your way, check out Embracing Customer Capitalism: How to build an advocacy growth engine.

  1. 86% of loyal consumers will recommend a brand to friends and family. (Source: KPMG)
  2. Customers who are referred by a friend or other customers have a 16% higher lifetime value. (Source: Harvard Business Review)
  3. Satisfied US customers will share their positive experience with 11 different people. (Source: Business Wire)
  4. Repeat customers refer 50% more people than 1X buyers. (Source: Bain & Company)
  5. 70% of consumers consider themselves more likely to recommend a brand with strong loyalty programs. (Source: HubSpot)
  6. For every channel that influencer marketing is added to, the potential to increase ROI by up to 30% is introduced. (Source: Ogilvy)

 

Omnichannel

Today’s omnichannel consumers shop many different ways and use many different channels—but they don’t think in terms of channels. They want brands to know who they are and deliver a personalized experience no matter how they interact or purchase from them.

  1. 60 – 70% of customers are shopping in an omnichannel way; social media is the new window shopping. (Source: McKinsey & Company)
  2. 80% of customers report seamless experiences across channels, and product availability wherever they shop, are 58. highly important. (Source: McKinsey & Company)
  3. 74% of organizations say creating a seamless customer journey across assisted and self-service channels is “important” or “very important”. (Source: Gartner)
  4. Companies that prioritized omnichannel customer engagement saw 9.5% year-over-year average growth, compared to 3.4% for companies that did not. (Source: Mad Mobile)

 

Data Privacy & Trust

Marketers are facing challenging times, trying to balance consumers’ increasing expectations for personalized, unique experiences while more stringent privacy restrictions are popping up everywhere and third-party cookies are on their way out. Loyalty programs provide consent-based zero- and first-party data to help brands accomplish both.

  1. 72% of North American customers said they would stop buying from a company or using a service because of privacy concerns. (Source: Boston Consulting Group)
  2. 70% of Americans believe their personal data is less secure now than it was five years ago. (Source: Pew Research Center)
  3. 82% of customers say they’ll continually buy from a brand they trust, even over brands that become trendy at the moment. (Source: Klaviyo)

Customer Retention Statistics Say It All

These 63 customer retention statistics tell a compelling story about the value of loyalty and why it should be an essential part of your growth strategy. Annex Cloud can help you build a customer retention program that’s unique to your brand and customers using our modular, flexible customer loyalty software. Whether your customers like discounts or points, games or surprises, we have something for everyone. Contact us to discuss how to bridge your customers’ expectation gap and use loyalty to your full advantage.

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