35+ Proven Customer Retention Statistics of 2023
You open your Instagram account and see your friends using a product. You would naturally want to know the product and may even want to purchase it for yourself. Doesn’t this seem like one of the best ways to promote your business? So, how do you let your customers be your greatest advocate? By improving customer loyalty towards your brand. Loyalty also results in customer retention.
Many businesses now focus on improving customer retention because it saves the cost of finding new leads. Not just that, it also saves the precious time of your marketing and sales team. Knowing the customer retention statistics is one of the best ways to devise a successful retention plan.
In this blog, we will look at those statistics which will help you understand the importance and benefits of customer loyalty.
#1) Almost 44% of organisations focus on obtaining new customers. But less than 20% of businesses focus on retaining the existing ones.
Despite the proven benefits, most companies ignore the procedures to improve the loyalty of customers. Rather they spend additional money on searching for new customers.
#2) 89% of the businesses agree that customer service plays a significant role in customer retention rates.
Happy customers turn into loyal customers. Hence, it is vital for customer service employees to satisfy customers through their service.
#3) Individuals who already bought a product are 60% to 70% more likely to accept a new sale offer.
Since existing customers already know about your service quality, you can expect them to close a sales deal faster than the others. Again, retention does more good than acquisition.
#4) There is a 50% increased probability that an existing customer tries your new product/service.
Selling a product that has zero reviews is tough. This is where your old customers can help you by readily investing in the newly launched item.
#5) Quality products are the most significant way of improving customer loyalty, says 77% of customers.
Even though you have excellent strategies to help your customers in need, product quality must be the top priority. If a customer has a low-quality experience with your product, they lose trust in all your future products.
Online channels for customer retention:
#6) Only 2% of paid marketing efforts like Google Ads and PPC focus on customer retention.
Most companies consider acquisition as their primary rate for success and do not invest resources in saving existing customers.
#7) Almost 44% of businesses use mobile apps to improve customer satisfaction and loyalty.
Mobile apps greatly increase the accessibility to your products. Hence, it is one of the best digital marketing strategies to enhance customer experience.
#8) Almost 28% of successful businesses consider social media as the best method to reach customers.
Retaining customers comprises keeping them informed about your products through all platforms. And social media is one of the most used platforms by customers.
#9) Mobile and web push notifications drive existing customers to buy again, according to 39% of marketing experts.
Sending weekly push notifications is the best way to remind your customers about the variety of products you offer. A less irritable way to stay on their radar.
#10) According to 52% of marketing experts, they spend more time developing strong email marketing strategies to reduce customer dropout rates.
There are many customer retention statistics that imply the importance of email marketing. It helps you stay connected with the customer for a long time.
Digital marketing for customer retention:
#11) Email marketing is 56% more effective than other digital marketing methods.
Since most companies have email automation software, it has become one of the easiest methods to reach out to existing customers.
#12) Social media marketing follows email marketing with 37% effectiveness in retaining customers.
Social media posts tend to attract new customers as well as persuade existing customers to reinvest in the brand.
#13) 26% retention takes place due to referral marketing.
You can increase your referrals by offering discounts to customers if they suggest the product. Or a naturally satisfied customer with your product/service will already be referring your products in their circle.
#14) Search Engine Optimisation (SEO) only provides 13% effectiveness in improving customer loyalty.
Most SEO operations focus on visibility, but they also prove to be a little effective in attracting the attention of existing customers.
#15) Mobile advertising has 8% effectiveness in customer retention.
Mobile ads are less tolerated than other kinds of ads. Yet, they help you reach customers who have lost touch with your brand.
Customer retention statistics for loyalty programs:
#16) Almost 58% of customers from the loyalty programs purchase at least once a month.
Customer retention programs only enrol customers that are more likely to buy new products every month. Hence, keeping them in check ensures continued revenue.
#17) 64% of businesses have a good relationship with customers from loyalty programs.
A loyalty program creates a feeling of recognition that most customers enjoy. Resulting in a boost in customer engagement.
#18) 57.4% of customers under loyalty programs join because of the discounts they enjoy.
Joining a loyalty program ensures that your business keeps them informed on all the discounts and offers. Thus, saves money for the loyal customers.
#19) 69% of people choose retailers who offer loyalty programs with more rewards and discounts.
This is one of the customer retention statistics that help you understand the importance of investing in creating loyalty.
#20) Loyalty programs in restaurants increase the number of guests they receive by 35%.
If you have a coupon for a restaurant, you are more likely to choose it for a family dinner. You are also more likely to suggest the restaurant for additional rewards.
Customer retention challenges statistics:
#21) 61% of successful companies consider customer retention as one of their biggest challenges.
Most companies that invest in retention programs rely on upselling the products. It ends up backfiring when products don’t meet customer expectations.
#22) An average company with no retention program loses 23% to 30% of customers a year.
Lack of customer loyalty is the main cause of such customer dropouts. Resulting in increased investment in lead acquisition.
#23) Competitors win over customers easily because of a lack of retention programs, according to 9% of businesses.
Employing automation tools can prevent customers from falling out through the gaps in the sales funnel. Thus preserving existing customers.
#24) A 37% rise in customer loss is due to poorly managed customer service programs.
Customers expect a decent conversation when they call a customer support personnel. But when things do not go as expected, the customer service rating drops.
#25) Almost 50% of customers feel like the businesses treat new customers better than old ones.
You must ensure that the contact you make with existing customers does not suffer any loss in quality and amicability.
Customer retention rates by industry:
#26) On average, retail industries enjoy 63% customer retention rates.
The retail industry is exceptionally tough to crack since competitions rise and fall every minute. Yet, most people choose to stay loyal to the store they trust.
#27) The customer loss rates in banks are very small, with only about 25% of customers.
Banks rarely lose customers since most of them do not change their banks for a lifetime.
#28) Telecom companies have high retention rates of about 78%.
Most telecom companies offer ready discounts to prevent network transfer of their customer.
#29) IT companies experience a retention rate of about 81%.
IT companies do a great job at understanding their customers’ needs. Hence, they offer custom solutions to retain their customers.
#30) 83% of customers do not change their insurance agency.
Few have the patience to go through the trouble and paperwork of shifting to another insurer. They would rather find a suitable policy within the same agency.
Customer retention behaviour statistics:
#31) Almost 41% of regular customers drop out when the company doesn’t know how to handle complaints.
Once again these kinds of customer retention statistics highlight the significance of having a good customer service strategy.
#32) The probability of a customer purchasing goes up by 82% when you respond and solve complaints quickly.
Valuing the time of the customer is a good way to instil confidence and trust in the brand.
#33) There’s only a probability of 19% of retention when the customer complaint doesn’t get resolved by the company.
Customers simply do not want to do business with a brand that clearly doesn’t value them.
#34) Almost 97% of customers expect salespeople to ask more questions about their needs.
A sales call must identify what the customer needs by asking them questions before slamming them with a list of products.
#35) 49% of customers believe that salespeople talk way too much than just delivering the content.
Some people do not like chatter. They simply want to know the information needed. Hence, it is important to have a CRM that tracks user behaviour. It helps with delivering the right content.
Mobile app retention rate statistics:
#36) Only 25% of customers use mobile apps after the first day of installation.
#37) News apps maintain a retention rate of about 13.3% even after a month of installation.
#38) eCommerce apps manage to retain almost 37% of customers in the first month.
#39) Gaming apps only have a 27% retention rate which gradually drops to 10% after 90 days.
#40) Entertainment apps have the highest retention rates of about 43% in the first month of installation.
To sum up, not every company understands the benefits of customer retention. These customer retention statistics prove that it is much cheaper and efficient than finding new leads. It saves time and money when combined with modern software solutions.