Taking actions to keep customers happy and satisfied after at least one purchase has been a somewhat neglected area of marketing. These customer retention statistics demonstrate that it’s not only more efficient to keep current clients instead of always chasing new ones, but that it is more affordable too. So, read on to learn more about how to make sure your customers are happy and update your marketing strategy so that they keep coming back to your business.
The latest research on customer retention rate by industry suggests that the media and professional services sectors currently have the best result at 84%. At the other end of the spectrum with the lowest retention rates are the hospitality, travel, and restaurant industries (55%).
Customer retention statistics indicate 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.
Emails are the best for marketers focused on keeping their current customers, although customer retention statistics show they do use other methods too. A massive 63% use social media engagement as an effective customer retention marketing tactic, while another 55% use direct mail, and 49% rely on online marketing (excluding paid search and social media marketing). SEO and social media advertising are preferred by 42% and 41% of marketers, respectively.
Customer retention vs customer acquisition statistics suggest that it is much more convenient to invest in converting an existing customer as the chances of success are 60-70%. By contrast, if you opt for converting a potential customer, the probability is much lower at 5-20%.
US companies are facing a loss of around 83 billion dollars every year and, as customer retention facts confirm, it is mainly because of poor customer service. What they are also failing at is establishing a good customer retention strategy and implementing a proper loyalty program for their clients. And if you consider the average customer retention cost worldwide amounts to $243, it is highly likely that you will be losing a significant amount of money when you lose a customer.
As many as 86% of customers would pay more to get better service. Customer service statistics also indicate that clients are willing to go as far as paying a price premium of 13% to 18% higher only to feel they have indulged themselves and will be receiving super luxurious customer service and experience. Customer retention trends suggest that customer experience is on track to overtake price and product as the key differentiator for brands.
Sales statistics show that for 65% of Americans, the customer retention process starts with the quality of service provided which is the determining factor on whether they would make another purchase or not. For another 67% of surveyed American customers, good service could prompt them to spend more money or stay longer.
Customer retention statistics show that seven out of ten consumers have stopped using the services or products of a certain company after they’ve been provided poor customer service. Failure to retain a customer can sometimes result in mean actions on their part, as stats indicate that 61% would be more than eager to use the services of your competitor after ending the business relationship with your company.
Customer retention factors show that 73% of customers see the experience as a crucial factor for their purchasing decisions. 43% of consumers are willing to pay a higher price for the sake of convenience, while 42% have no problem paying more for a friendly experience, and 65% say a positive experience has more influence on their purchasing decisions than advertising. Implementing some of these customer retention tactics in your next strategy could really make a difference.
About a third of shoppers are the most frustrated by being put on hold when dealing with customer service. 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. One possible option could be to turn to AI companies for more innovative solutions like chatbots so that you can ensure your customers resolve their issues online, since being unable to do that is frustrating for 14% of them.
This means that the payoff of taking care of your existing customers who have already demonstrated their loyalty is bigger than that of acquiring new ones. And the most important thing you need to take into account for your existing customers is that spending grows proportionally with trust.
A positive experience boosts the retention percentage and will definitely deliver you some good reviews. As customer retention statistics confirm, a whopping 77% of happy customers would willingly give a positive recommendation about your company if they’ve enjoyed the service. One-third of all customers (32%) who had just one bad experience with a company would cease all future business dealings with that brand.
Customer retention strategies are all about making customers happy and prompt them to come back and spend more money. Customer retention statistics show that happy and satisfied customers will generate 2.6X more revenue for the company, compared to those who are just somewhat satisfied. So in case you were wondering whether the cost of customer retention you are paying will ultimately pay off, the answer is a resounding yes.
The 20/80 Pareto Principle is the most important in the customer retention business but also in economics, software, and other areas. And what repeat customer statistics show is that 80% of the revenue comes from 20% of repeat customers while 80% of one-time customers deliver only 20% of the revenue. These figures emphasize the importance of client retention and why continuous investment in it is smart.
About a third of surveyed Americans will go to another place next time if they experience just one mistake, and another 92% will abandon a brand they love after they’ve given it a few chances to correct themselves. That means they can have an amazing experience every time they walk in, but if you fail to meet their expectations once or thrice they’ll be right out of the door.
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, American businesses pay as much as $62 billion a year because of bad customer service.
Free shipping on returns is a sure way to lift your average customer retention rates. Ecommerce return rate statistics show that around half of the companies don’t offer free return shipping but if they do, a whopping 92% of their clients will be happy to return and shop from them again. After all, ordering blind, without physically seeing the product comes with risks, including damage during shipping or getting a different product altogether.
In the world of banking, the cost of acquiring a customer is approximately $200 per year. Bank customer retention statistics confirm that it costs more to acquire a customer than the revenue which an average client will generate for the bank annually. What this means is that the return on investment for the bank starts at some point in the second year. What’s even worse is that the banking sector has an annual 20-25% churn rate in the first year, while around 50% of customers leave within 90 days of opening a bank account.
Moving on to the insurance industry, it seems they are losing 16% of customers an average per year. And although they boast a relatively solid customer retention rate of 84%, insurance companies that want to be leaders on the market should focus more on meeting the needs of existing clients as top companies in their industry have a higher rate by 10%. The McKinsey report meanwhile shows that satisfied customers, as one of the leading customer retention factors, are 80% more likely to renew their insurance policy than those who were not satisfied with the service.
B2B companies have various customer retention tactics but the highest priority goes to customer experience and support. According to B2B customer retention statistics, for the majority of B2B brands, educating customers to better offer their services and onboarding new customers effectively were ranked highest at 34% and 32%, respectively. Improving customer satisfaction by providing even better support is the priority of 14% of B2Bs, while 5% are focused on saving customers from canceling.
In B2B relations, the speed of operations is the main reason why connections are lost. Speed seems to be the key factor for retaining such clients as the number one reason for businesses to quit working with another company is if the business partner is too slow in operations. But B2B customer retention statistics show these companies are losing 66% of their customers because of a bad experience with their service while, on the other hand, they are winning on the number of purchases in 62% of the cases where their employees had provided exceptional customer service.
45% of customers would opt to eat in a restaurant if they are part of its loyalty program. Given the huge competition in the field, research done by branding agencies says that introducing a loyalty scheme is key. From free meals to discounts for orders via mobile, the options to motivate customers to order again are endless.
Even though customer retention is obviously very important, lots of companies still have no dedicated budget for this. It doesn’t matter what kind of business you’re in, raising the client retention rate can generate lots of revenue for the company which is why the hard data customer retention statistics offer can’t be ignored in today’s way of doing business. This means that while getting new customers is great, keeping those you already have is absolutely essential.
Sources: Statista, IDC, Statista, Textedly, Neil Patel, SupperOffice, Walker, CSA, PwC, Hubspot, Sixads, GetFeedback, Annex Cloud, Zinrelo, SuperOffice, HelpScout, InvespCRO, ReviewTrackers, Indio, Business2Community, Hospitality Technology