Taking actions to keep customers happy and satisfied after at least one purchase has been a somewhat neglected area of marketing. That’s why we prepared these customer retention statistics, which demonstrate that it’s not only more efficient to keep current clients instead of always chasing new ones, but it’s more affordable too.
So, read on to learn more about how to make sure your customers are happy, and how to update your marketing strategy so that they keep coming back to your business.
Customer Retention Statistics (Editor’s Choice)
- 65% of Americans point to customer service as a factor when making purchases.
- Companies lose $136.8 billion every year due to bad customer retention programs.
- A happy first-time customer will come back 60% of the time.
- The happiest 20% of customers make 80% of the brand’s profits.
- One bad experience will make 33% of Americans look for a new place to shop.
General Customer Retention and Satisfaction Statistics
1. 65% of Americans say they decide on a second purchase based on their first buying experience.
For 65% of Americans, quality of service is one of the factors determining whether they would make another purchase. For 67% of surveyed American customers, good service could prompt them to spend more money or stay longer.
2. 20% of the happiest customers make 80% of a company’s revenue.
The 20/80 rule is the most important in the customer retention business. Customer retention facts show that 80% of revenue come from the same 20% of customers. This is very important as it says that if these numbers are higher, sales can go through the roof.
3. Happy clients spend 2.6 times more.
A customer retention strategy is all about making customers happy and with it, prompt them to come back and spend more money. Annex Cloud’s stats show that happy customers will generate 2.6 more revenue for the company, compared to those who are just somewhat satisfied.
4. 73% of customers say the experience with a company impacts their purchasing decisions.
Customer retention statistics show that 73% of customers see the experience as a crucial factor for their purchasing decisions. This is the third most important factor, behind price and quality. For 65%, positive experience has more influence on their purchasing decisions than advertising.
5. 50% of the customers will stop being loyal if they get a better offer.
Around half of surveyed Americans will simply throw loyalty away and go to another company that will give them a better product or an offer. That means a good customer retention policy needs to be supplemented with a quality offering.
6. 33% see waiting on hold as the most frustrating aspect of customer service.
About a third of shoppers are the most frustrated by being put on hold when dealing with customer service. Then, according to customer service retention stats, another 33% point to repeating themselves when having to communicate with more than one representative. So, if you want to improve your customer retention rates, try to minimize those cases, and make sure your customers can resolve their issues online, since being unable to do that is the most frustrating for another 14%.
7. American companies lose $83 billion because of bad customer retention strategies.
Statistics about customer retention show that US companies are facing a loss of around $83 billion dollars every year because they are failing to do a good customer retention strategy and implement a proper loyalty program for their clients. 71% of consumers meanwhile cite poor customer service as the reason why they have ended their relationship with a company.
8. Loyal customers spend 67% more than new clients.
This means that the payoff of taking care of your existing customers is bigger than that for acquiring new ones. Not just that, but it costs 5x more to attract a new customer than it does to retain an existing client, according to customer retention vs customer acquisition statistics.
9. One in 3 Americans will stop being loyal after one mistake.
About a third of surveyed Americans will go to another place to shop next time if they experience just one mistake. That means they can have an amazing experience every time they walk in, but once you fail to meet their expectations they’ll be right out of the door, according to statistics on the importance of customer retention.
10. More than 80% of customers would pay more if they get a better experience.
As many as 86% of customers would pay more to get better service. What is more, according to research by experience management services firm Walker, customer experience is on track to overtake price and product as the key differentiator for brands by the end of 2020.
11. Spending on customer experience technologies is projected to reach $641 billion in 2022.
It seems that businesses are willing to splurge on improving their average customer retention rates, with an IDC guide from 2019 suggesting that spending on customer experience technologies will reach $641 billion in 2022. The research, which covers both the B2C and B2B segments, implies a CAGR of 8.2% over a four-year period.
Industry Customer Retention Stats
12. 50% of ecommerce customers will cancel an order if they receive bad service.
Ecommerce is one of the industries where customer retention is the most important. Half of Americans who receive bad service during the purchase process are likely to cancel the order. Also, bad customer service is the number one reason for Americans to shop elsewhere.
13. If an ecommerce site has free shipping on returned products, 92% of clients would order again from them.
Free shipping on returns is a sure way to lift your average customer retention rates. Ordering blind, without physically seeing the product comes with some risk factors, including damage during shipping or getting a different problem altogether. That said, around half of the companies don’t offer free return shipping. If they do, 92% of their clients will be happy to work with them again.
14. In insurance, the average retention rate is 84%.
Moving on to the insurance industry, it seems they are losing 16% of customers an average per year. Insurance customer retention statistics cited in a McKinsey report meanwhile show that satisfied customers are 80% more likely to renew their insurance policy than those who were not satisfied with the service.
15. In B2B relations, the speed of operations is the main reason why connections are lost.
Retention is also important for B2B customers. Speed seems to be the key factor for retaining such clients — the number one reason for businesses to quit working with another company is if the business partner is too slow in operations, according to b2b customer retention statistics.
16. 80% of bank clients will switch to a rival offering better experience.
What’s worse, estimates suggest that it costs more to acquire a customer than the revenue which an average client will generate for the bank each year. This means that the return on investment for the bank starts at some point in the second year.
17. Nearly half of prospective diners would choose a restaurant if they participate in its loyalty program.
Restaurant customer retention statistics show that 45% of customers would opt to eat in a restaurant if they belong to its loyalty program. Given the huge competition in the field, introducing a loyalty scheme of some sort might be the key to surviving in the industry. From free meals after a certain amount of orders to discounts for orders via mobile, the options to motivate customers to eat again are endless.
18. With 61.5% Subaru has the highest customer retention in the automotive industry.
Automotive customer retention statistics suggest that customers in the car industry are most satisfied by Subaru which achieved a 61.5% customer retention rate. The benefits are obvious — Subaru sold 680.135 cars in the US in 2018 alone, which puts them at 3rd place among foreign cars. Among the luxury brands, Lexus is on the top with 47.6%.
19. Web stores have a 60% chance for customer retention if they do a good job.
Customer retention e commerce statistics show a rate of 60% in those stores that provide good customer care. In ecommerce, free shipping is listed as the most important feature for staying a loyal customer in 78% of the cases.
Even though customer retention is obviously very important, lots of companies still have no dedicated budget for this. Customer retention statistics can’t be ignored in today’s way of doing business. It doesn’t matter what kind of business you’re in, raising the rate of customer retention can generate lots of revenue for the company. This means that while getting new customers is great, keeping those you already have is absolutely essential.