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16 Noteworthy Customer Loyalty Statistics You May Not Know in 2021

Written by, Sandeep Kumar

Updated June, 5, 2021

To ensure the longevity of your brand, building a loyal customer base should be your top priority.

Fascinating Facts (Editor’s Pick)

  • It costs 5x more to attract a new customer than it does to keep an old one.
  • The odds of selling to an existing customer vary from 60% to 70%.
  • Profits see an increase between 25% and 95%, with a step up by five percent in customer retention.
  • Nearly 65 percent of a company’s business comes from already existing customers.
  • Businesses recorded a loss of more than $1 trillion yearly when their customers moved away.
  • Around 40% of US people consider themselves loyal customers to a company after making a minimum of five purchases.
  • All you need are twelve positive experiences to compensate for a single unresolved negative experience.
  • Over 80% of consumers rely on recommendations from family and friends rather than those from companies.

Loyal customers are those who choose your products repeatedly over a competitor offering similar benefits. That’s what makes them the most valuable asset for any brand to hold onto.

We’ve rounded up some impressive customer loyalty statistics and facts to help paint a better picture of this ‘goldmine.’

These stats should help you understand what makes customers want to stay and the moves that will chase them away.

Customer Loyalty Stats

1. It costs 5x more to attract a new customer than it does to keep an old one.

Source: (Invesp, Forbes, Adobe Digital Intelligence Briefing)

The two essential strategies for generating sales are customer retention and customer acquisition. Despite the agreement that retaining existing customers would be less expensive, according to a study by Invesp, more than 42% of companies still focus on acquisition rather than retention. On the other hand, no less than 18% admit they focus on retention.

However, a 2018 report by Econsultancy’s Digital Trends showed that 38% of companies actually consider customer experience a top priority. For instance, if you examine the value of customer loyalty and retention and their experience, you will find that nurturing existing customers has a much better return on investment (ROI) than onboarding new ones.

That’s because you already have an existing workforce dedicated to these clients and services, so there’s no need to initiate a new process.

2. The odds of selling to an existing customer vary from 60% to 70%.

Source: (Altfeld Inc., Super Office)

According to statistics on consumer loyalty, the odds of selling a product to an existing customer is much higher than selling it to a new customer, which stays at a low 5% to 20%. With a new client, you have to undergo several stages first before they can purchase your products.

3. 90 percent of customers would probably purchase more than once.

Source: (HubSpot Research, Smile.io)

Content customers are willing to provide support to the businesses they love. One of the customer loyalty facts is that 90 percent of customers would probably purchase more and are more likely to buy from you again as their purchases increase.

That’s what ‘turning desire into action’ means. Therefore, if you get a customer to come back and make a second and then another purchase, they stand over 50 percent chance of making one more purchase—that’s what a ‘repeat customer’ really is.

4. Around 40% of US people consider themselves loyal customers to a company after making a minimum of five purchases.

Source: (Yotpo, Marketing Charts)

According to a customer loyalty survey, a customer purchasing once or twice doesn’t make him a new brand fan of your business. In fact, around 40 percent (or 37 percent, to be more precise) of consumers say it takes five or even more purchases for them to consider themselves loyal clients to a brand.

The survey also showed that slightly over 55 percent of your buyers are loyal because they genuinely like the product.

5. Over 80% of consumers rely on recommendations from family and friends rather than those from companies.

Source: (HubSpot Research, Transaction eCommerce Agency)

With the thriving of the Internet, the way how people interact with businesses has also changed. Due to the rapid spread of misinformation, issues with personal data, misuse by online businesses, and a flood of branded content all have a huge negative impact – customers don’t trust businesses anymore.

A HubSpot research shows that no more than 55 percent of customers (in the US and UK) don’t believe companies they purchase from as much as they did before. At the same time, more than 60 percent don’t believe what the company press publishes anymore.

6. Nearly 70% of consumers worldwide don’t trust ads.

Source: (HubSpot Research, Marketing Charts, Marketing Week)

Here’s what a recent customer loyalty research revealed:

  • the majority chooses family and friends for recommendations,
  • Almost 70% don’t trust advertisements,
  • And as much as 71% don’t trust ads promoting on social networks.

In other words, there seems to be an oblique proportion between trusting family and friends on one side and believing business’ recommendations on the other side.

Furthermore, there is an increase in third-party websites that rate and review businesses for their practices and service quality.

Customer Loyalty Stats on Profit

7. Profits see an increase between 25% and 95%, with a step up by five percent in customer retention.

Source: (Bain & Company, OutboundEngine)

Based on customer retention statistics, the most profitable customers are the ones who stay.

They are likely to buy more often and spend more money with each purchase. This is because they are already familiar with your brand offers, so they are less likely to risk their money on another brand’s products.

Even more, return customers might help you grow by referring others to your company. Based on Bain & Company’s research, a customer would probably recommend at least three other people after only one purchase from an online apparel sales place. Whereas, after ten purchases, the number of recommendations will go up to seven other people.

8. The Pareto Principle unveiled 80 percent of the profits you make come from no more than 20 percent of customers.

Source: (Forbes, Marketing Insider Group, Smart Insights)

We already know how much customer retention can boost your profits. However, Vilfredo Pareto’s 80 against 20 principles gives us another perspective in sales and marketing. According to this principle, the top 20 percent of your customers will let you know how to manage and attract similar people with much ease and boost your future profits at the same time.

9. Nearly 65 percent of a company’s business comes from already existing consumers.

Source: (Annex Cloud)

A high percentage of businesses are usually oriented towards gaining new clients. Nevertheless, your existing customer base is far more critical when it comes to generating sales. Following consumer spending statistics provided by the Customer Research Institute, the existing customer base provides nearly 65 percent of the company’s business. Therefore, companies whose focus is to retain their current customers mark no more than 60 percent more earnings than their competitors.

10. Businesses recorded a loss of more than $1 trillion yearly when their customers moved away.

Source: (Accenture, CommBox)

One of the main reasons that make customers switch to another brand is poor service. Due to this, businesses record losses of up to $1.6 trillion. This means that the more customers that leave, the less your business grows.

Furthermore, the Accenture Strategy report revealed that more than 43% of customers are prepared to pay more just to get a better service. However, once a business loses a customer, over 65% of them won’t come back.

Consumer Behavior Statistics

11. Over 30% of US customers are thinking of changing companies after going through only one poor service experience.

Source: (Help Scout, Astute Solutions, Forbes)

Gartner reported that more than 62% of people find customer experience more important than the price itself when making a purchase. Based on these results, companies and industries change their belief that customer service is the core center of income. To build a more solid bond with their customers, they now consider it a chance to build loyalty and rank revenue up through outstanding experiences.

12. Above 71% of consumers will talk to more than 6 people about their positive experience.

Source: (Customer Thermometer, Super Office)

Esteban Kolsky revealed that happy consumers would most certainly share their experiences with others.
Nonetheless, customer loyalty analytics showed they could share their negative occurrences with more or less fifteen people when talking about unhappy customers. What’s more interesting is that only one of twenty-six consumers complain or express their discontent with a brand.

The rest of your clients simply leave, according to Kolsky.

13. All you need are twelve positive experiences to compensate for a single unresolved negative experience.

Source: (Customer Guru, CliffEdge Marketing)

As the old saying goes: “Customers remember the service longer than they remember the price.”
With that being said, once a customer has gone through a bad experience, redemption is almost impossible. Almost all (more precisely 96 percent) dissatisfied buyers won’t even bother complaining before leaving. Compared to more than 90 percent who won’t do business with you never again.

Worthy of mentioning is that 95 percent of dissatisfied customers whose issues were resolved immediately (in their favor) are willing to come back.

Loyalty Program Statistics

14. No less than 70 percent of consumers are more likely to recommend a brand if it has a good loyalty program.

Source: (Bond)

Loyal programs aim to keep loyal customers and attain a strong connection between the customer and the retailer.

The strategy is useful too to support the emotional bonds that connect the customer to the point of sale. Therefore, because of these programs, customer loyalty program statistics pointed that more than 76 percent of consumers would probably continue using the brand’s services.

Further data indicated that 71 percent of Millennials and around 65 percent of Generation Z stated these kinds of programs significantly influence them.

When talking about customer experience, no more than 20 percent of loyalty members expressed they like these programs because of the level of personalization they provide to them. On the other hand, as much as 24 percent said such programs keep their preferences up to date.

15. Almost all loyalty program members prefer joining a loyalty program via new and emerging technologies.

Source: (Forbes)

With advancements in technology and life’s dynamic, people are more interested in engaging with brands through virtual reality, chatbots, biometrics, wearables, etc. Therefore, adding these kinds of programs to people’s experiences seems to be a game-changer for marketers.

Since the cost of a customer loyalty program in the digital field has dropped dramatically, it is the perfect go-to method.
For instance, a loyalty report (2018) indicated that technologies that enhance humanity and build a closer bond with members through these programs would lead to an almost 30% increase in their membership spending.

16. More than 50% of programs enroll game mechanics in their loyalty programs.

Source: (Bond, Access Development, Forbes)

Features that are usually found in games, like virtual rewards and goal-setting, effectively increase customer enjoyment, which might automatically increase customer loyalty. When working towards a specific reward or goal, you are more likely to stay loyal to a brand and spend even more money on its products.

Thus, Bond’s 2019 report stated that more than 80% of members become part of these mechanics when available. Higher usage has been reported from younger generations. In contrast to this, we found Gen Z occupies over 84%, whereas baby boomers account for less than 80%.

Conclusion

Customer loyalty can often be misinterpreted because it’s correlated with customer satisfaction. So, in a ‘customer satisfaction vs. customer loyalty’ discussion, the first one might be considered a short-term win, whereas the latter one a long-term goal.

Satisfied customers are not always loyal, and this is where the problem lies. Therefore, loyal customers are the ultimate goal of every company or industry.

The above-listed customer loyalty statistics show that the ongoing positive relationship between a customer and a business can lead to loyalty. It’s the latter one that leads to continuous purchasing and drives your current customers to choose your company over one of your competitors.

However, not every customer-retailer interaction can be perfect. A few existing negatives are usual, but too many of them might break down the connection.

So, remember the age-old business mantra, ‘Customer is King,’ and that happy customers have the potential to bring more business to your doorstep.

FAQs

1. How to increase customer loyalty?

Even though there is no specific answer or way to strengthen customer loyalty, there are a few tips and tricks that might help customer loyalty and growth.

One of them is rewarding your customers, not only with discounts though. You can use personalized ‘thank you’ cards, provide them access to a special event, or increase their loyalty points.

If you want to attract loyalty, you have to be loyal to your customers first. Satisfaction is considered only a phase that can last for a short time. On the other hand, loyalty is considered a virtue that lasts much longer.
Another recommendation would be to keep your customers engaged—not only during the sales stage but also after the sales.

Invest more time in having one-to-one interactions with your customers. You will understand each other better when there is a human voice with an understanding tone on the other end.

And last but not least, recognize your regular customers and invest more in them.

Don’t forget – be reliable and keep your promises!

2. How do you calculate customer loyalty?

Except for the traditional customer satisfaction surveys you might use, there are a couple of customer loyalty metrics that give you the perfect starting point for tracking customer loyalty.

  • One of the most effective ones is the Net Promoter Score. NPS is used to measure a company’s customer loyalty, and its scores are measured with a single question “how likely are you to recommend us to family and friends?”.
  • Another metric used for customer loyalty analysis is CLV. It’s an understanding of the whole revenue attributed to the entire relationship with a customer. The Customer Lifetime Value is calculated based on their average purchase value, multiplied by the average purchasing frequency and the average customer lifespan.
  • CLI (Customer Loyalty Index) is a standardized tool used to record your buyer’s loyalty. CLI has more questions than cover repeat and multiple purchases. The answers range from one to six-one, which means “Definitely Yes,” and six means “Definitely No.”
  • Another way from which you can extract brand loyalty statistics is CES (Customer Effort Score). You can see how often your customers utilize your services and how engaged they are with your brand through it.

3. What is a customer loyalty score?

Customer loyalty score is a fundamental measurement to help you understand what your customers value, what they think of your performance in the areas that matter to them, and how loyal they are to your business.

The overall customer loyalty score is built in three main fields:

– Your NPS (Net Promoter Score)
– Your customers’ satisfaction with your service
– And your understanding of your existing customers’ needs.

4. What are the five stages of customer loyalty?

The customer lifecycle consists of five stages, which are:

1. Awareness – Hearing about the company from ads, social media, family, friends, etc.
2. Researching – Looking for more information about the brand
3. Buying – Deciding to make the first purchase
4. Using – Using the product or service for the first time
5. Repeating – Purchasing once more if they liked the product or service
6. Referring – Based on their level of satisfaction, customers will refer other people to your brand

5. Why is customer loyalty important?

There are many benefits of customer loyalty, and many companies or industries are not even aware of it.

Loyal customers are the ones who keep coming back to purchase from your business.

If a customer trusts your brand’s quality, they are more likely to keep buying your products regularly. According to many customer loyalty statistics and facts, not only do they contribute to higher revenues, but they also convert friends and family into customers just through word of mouth.