Customer Retention Statistics (23 Interesting Facts, Trends + Statistics)
You’re a business and want to understand customer retention rates, so you decide to check out some customer retention stats?
Well, even if you’re just interested in understanding customer retention rates, read on as I’ll dive into the topic and tell you everything I’ve found about customer retention statistics!
2022 Customer Retention Statistics
- 75% would go back to the company if they offered incentives
- 82% of companies believe retention is cheaper than acquisition
- 65% of business comes from existing customers
- 56% of consumers are loyal to the brand they just got
- If a company increases retention by 5%, it can lead to a 25% to 95% increase in profits
- 89% of companies believe great customer service keeps customers
- Personalization strategies are a way for 58% of businesses to maintain customer retention
- 76% of companies believe customer lifetime value is important to their organization
- 18% of businesses focus on customer retention
- 44% of companies focus on customer acquisition
Do you want to know other important customer retention statistics and have other related questions? If so, read on as I have more to share with you!
1. 75% will return to the company if they offer incentives
75% of people give back if a company offers loyalty rewards, so it’s a great way to increase customer retention and attract more people to your business.
2. 82% of companies believe retention is cheaper than acquisition
An interesting customer retention statistic is that 82% of businesses believe retention is cheaper than acquisition, which means it is much less expensive to retain a customer.
3. 65% of business comes from existing customers
Did you know that 65% of your business comes from existing customers? This is a very high number and shows the importance of customer retention.
4. 56% of customers are loyal to the brands that appeal to them
If a person feels the brand has them and knows them, it leads to 56% of customers being loyal to the brand, which shows why companies need to focus on understanding consumers.
5. A 5% increase in retention can lead to up to 95% higher profits
If a business increases its retention rate by just 5%, it can lead to a profit increase of 20% to 95%!
6. 89% of companies believe great customer service keeps customers
Providing excellent customer service is important to customer retention, cited by over 89% of companies as a major factor in customer retention.
7. 58% of companies implement personalization strategies to maintain customer retention
Personalization strategies are important to maintain customer retention, with 58% of companies implementing this strategy to retain customers.
8. 76% of companies believe customer lifetime value is important to their organization
76% of companies believe the lifetime value of a company is important to the business, a high number that shows that businesses value customer retention.
9. Only 18% of businesses focus on customer retention
Customer retention is very important, but only 18% of businesses focus on it, which is a shockingly low number and we hope this trend does not continue.
10. 44% of companies focus on customer acquisition
Instead of focusing on customer retention, 44% of companies are focusing on customer acquisition, a statistic we don’t think we’ll see.
11. 55% of millennials are brand loyal
Millennials are known for being picky, but around 55% of millennials are brand loyal, which is a high number when you think about it.
12. Only 39% of people over 35 are brand loyal
While millennials may be highly brand loyal, those over 35 are not as loyal, as only 39% of 35+ consider themselves brand loyal.
However, that’s not a bad thing, as brand loyalty can cause you to miss out on other great brands that offer quality and loyalty programs.
14. The probability of selling to a new customer is less than 20%
Selling to new customers can be difficult, with one survey showing that businesses are less than 20% likely to be able to sell to new customers.
15. A company has a 60% to 70% chance of selling to existing customers
Existing customers are important to businesses, and statistics show that businesses have a 60% to 70% chance of selling to existing customers.
Therefore, customer retention can help businesses sell products, even new ones, which can improve profits.
16. 77% believe customer loyalty comes from quality products
Quality products can lead to high customer retention rates, as 77% believe brand loyalty comes from offering quality products.
17. Customer retention rates in most industries are below 20%
We were surprised to learn that a shocking customer retention statistic is that in most industries, customer retention rates are below 20%!
18. 90% believe a crisis can show the credibility of a business
Did you know that 90% of people believe that a crisis shows the credibility of a business? A company can retain customers if it handles a crisis with honesty and integrity.
19. Same-day delivery can make 40% pay more
Customer retention can be achieved by offering same-day delivery, which increases the company’s bottom line by making 40% pay more to receive products faster.
Also, if a company offers same-day delivery, it leads to a more positive customer experience.
20. Companies lose more than $1.6 trillion when customers choose another brand
When someone takes their business elsewhere and switches to a different brand, it costs a company $1.6 trillion in losses overall, which is an astonishing statistic!
As such, it shows that customer retention is critical to continuing to make money, and customers who are disconnected from the brand can really hurt profits.
21. A bad experience caused 32% of people to stop doing business with the company
32% would not go on to do business with a company even after just one bad experience, a high number considering that sometimes people just have bad days.
Also, the situation is more likely to get worse than it was a few years ago as businesses struggle to recruit workers.
69% shop where customer service is consistent
One way to maintain customer retention is to provide consistently great customer service, as 69% of people shop where customer service is consistent.
22. 77% would recommend a business to a friend if the experience was positive
If someone had a positive experience with a business or brand, they were 77% more likely to recommend the business to a friend than if they had a poor experience.
However, we were surprised that the positive experience did not lead to more people recommending the brand or business to their friends.
23. 48% said they generally trust a company
Only 48% said they have general trust in a company, which is good or bad considering you shouldn’t trust a business blindly and can lead to missed opportunities.
What are the 7 Customer Retention Strategies?
Seven customer retention strategies businesses can implement to improve customer retention include:
- Leverage customer data
- Create a loyalty program
- Measure customer lifetime value
- Build long-term relationships through trust
- Using gamification to delight customers
- Personalized newsletters and offers
- Attract customers with marketing automation
What is a good customer retention increase?
Businesses should aim to increase their retention rate by about 5%, as this can significantly increase your profits by up to 95%, which is huge!
Is customer retention more powerful than customer satisfaction?
Customer retention is more important than customer satisfaction, as more than 60% of the company’s future revenue will come from existing customers.
In addition, improving customer retention by just 2% can reduce operating costs by 10% and lead to higher revenue and profitability.
However, customer retention comes from customer satisfaction, so if your customers are unhappy then they may not be repeat customers and you will lose their business.
Is it cheaper to keep old customers or acquire new ones?
Retaining old customers is much cheaper because acquiring new customers can cost 5 to 25 times the cost of retaining old customers.
Therefore, trying to keep existing customers happy is a smarter financial move than spending time and resources trying to attract new customers.
That being said, it may depend on your industry, as retaining existing customers may not always be cheaper than acquiring new ones.
in conclusion
There are several customer retention stats we found fascinating, for example, if a company offers a rewards or loyalty program, 75% of people will come back to that brand.
Additionally, 56% of customers would be loyal to a brand if they felt they got them, and 65% of all business came from existing customers.
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