70 Compelling Customer Loyalty Statistics: 2024 Vital Facts & Data Analysis

When buying products, consumers often do not just center on form and function. Brand names matter, especially those that have been associated with quality. For this reason, we usually opt to purchase home products sold by a trusted company, be it food, clothes, gadgets, or automobiles. Customer loyalty is one of the most effective sales influencers and can turn any brand into a household name. This is why companies actively try to improve their wares until they gain flocks of repeat customers.

In this article, we will discuss the latest customer loyalty statistics, the factors that influence brand loyalty, and how customer retention affects sales conversion rates. The write-up also accounts for the effects of the COVID-19 pandemic and the importance of brand loyalty for ecommerce as well as the role of technology. Marketers will know of the variables that can make customers loyal to their clients. Meanwhile, business owners will learn more ways to increase conversions besides using robust sales software apps.

General Customer Loyalty Statistics

Loyal customers bring a lot to the table. Not only do they help in promoting a brand and its products; they contribute heavily to a company’s sales as well. So much so that, according to the latest customer loyalty data, most brands prioritize them over the acquisition of new markets. Turning potentially interested parties into repeat customers is of utmost importance and it could very well spell the survival of new players and small businesses.

• According to the latest customer loyalty statistics, a majority (54.7%) of customers are loyal to 1 to 5 brands. Meanwhile, 31.1% are loyal to 6 to 10 brands, 8% are loyal to 10 to 20 brands, 3.6% are loyal to over 20 brands, and 2.7% are not loyal at all (Yotpo, 2020).
• 42% of consumers would love to try new brands and products while 49% are sometimes open to trying new ones. Meanwhile, 8% never try new brands and products (V12, 2020).
• In addition, 34% of consumers trust a majority of the brands that they have or use (Business 22 Community, 2019).
• 73% of companies depend more on current customers than developing new markets (Retail Dive, 2021).
• 39% of retail consumers are considered loyal customers while 32% prefer to roam first and 29% are generally brand-neutral (Customer Communications Group, 2020).
• Only 2% of website traffic convert on the first visit (GoSquared, 2019).
• Almost 60% of leading firms connect employee performance reviews, salaries, and benefits to customer experience outcomes (Accenture, 2020).
• 31% of smartphone users are highly unlikely to switch brands (Statista, 2020).

Importance of Customer Loyalty

A question that runs through retailers’ minds is “How important is customer loyalty?” As the latest customer retention statistics suggest, retaining just a handful of customers could lead to a significant increase in profits. With this, brands strive to retain as many loyal consumers as possible. However, they should be mindful of their target market’s preferences and queries, otherwise, they run the risk of increasing their churn rate. Ideally, a company should actively answer customer queries and pay attention to its clientele’s comments and suggestions.

• 81% of consumers want to form a relationship with a brand (Merkle, 2021).
• In addition, 43% of US consumers pay more for products of brands they are loyal to (Fundera, 2019).
• In fact, 52% of customers go out of their way to purchase from brands they are loyal to (Zendesk, 2021).
• When it comes to spending, loyal customers pay more by an average of 33% per order compared to regular ones (Annex Cloud, 2020).
• It was also discovered that 56% of customers spend on brands they are loyal to even if there are cheaper options available (Yotpo, 2020).
• Moreover, increasing a brand’s customer retention rate by 5% potentially leads to a profit increase of 25% to 95% (ReSci, 2021).
• And as far as expenses are concerned, acquiring new customers costs 5 times more than retaining returning ones (Fundera, 2019).
• Meanwhile, 65% of a brand’s purchases come from repeat customers (Business News Daily, 2021).
• 81% of shoppers make decisions based on their level of trust for a brand (Annex Cloud, 2020).

Customer Churn Statistics

• Companies in the US lose $136.8 billion each year due to customers switching brands (CallMiner, 2020).
• The US industries with the highest churn rate are cable (25%), financial/credit services (25%), general retail (24%), online retail (22%), and telecommunications (21%) (Aspect, 2020).
• One bad experience with a product makes 50% of consumers switch to a competitor (Zendesk, 2021).
• This number grows to 80% if more than one bad experience is encountered (Zendesk, 2021).
• Furthermore, 57% would stop patronizing a brand if it has a negative review that it failed to address (Fundera, 2019).
• 33% of consumers abandon a brand if it lacks personalization (Annex Cloud, 2020).

What Makes Customers Loyal?

Understanding what makes customers loyal is the key to increasing customer retention. Product quality and reasonable pricing are a given. But some brands understate the value of customer experiences. Recent customer service statistics reveal that a positive customer experience drives loyalty and can lead to an even larger customer base. After all, when we experience something enjoyable, we tend to share it with our friends, family, and peers. That something could very well be a company’s products or services.

• The biggest factor that makes customers loyal is product quality with 74% of consumers most influenced by it. It is followed by value for money (66%), product consistency (65%), customer service (56%), ease of shopping (55%), product selection (55%), and pricing (54%) (KPMG, 2019).
• It’s also important to note that 84.3% of consumers are more inclined to be loyal to a brand that shares its values (Yotpo, 2020).
• Furthermore, 59% of consumers believe that fast, consistent, and satisfactory answers to customer queries are key to gaining their trust (Eptica, 2019).
• In lieu of this, 92% of consumers said that brands do not always listen to customers, 74% believe that they listen half the time or less, and 18% think that brands never listen at all (Eptica, 2019).
• 58% of marketers believe email is the most medium for customer retention, followed by social media (37%), content marketing (32%), and referral marketing (26%) (Invesp, 2019).

Importance of Customer Experience

• 89% of companies view customer experience as a critical factor in driving customer loyalty (Invesp, 2019).
• 33% of businesses invest in customer experience to improve customer retention (SuperOffice, 2021).
• 6 in 10 consumers pursue more business with companies due to good customer service (Aspect, 2020).
• And 80% are willing to spend more for a better customer experience (Fundera, 2019).
• Moreover, 60.3% of consumers have abandoned a company because of a bad in-store experience (Raydiant, 2021). The same percentage of customers will spend more at a physical store that offers a good customer experience (Raydiant, 2021).
• 59% of US consumers have shared to someone a bad experience with a company (Criterio, 2020).
• On the other hand, 68% of US shoppers have recommended a brand to someone due to a good experience (Criterio, 2020).
• Meanwhile, 80% of customers believe that speed, friendly service, convenience, and support are the most critical factors to have a good experience with a company (Annex Cloud, 2020).
• Companies with annual revenues of $1 billion, on average, rake in an additional $700 million in three years upon investing in customer experience (V12, 2020).

Loyalty Marketing Statistics

Rewarding repeat customers can make them stay on with a brand for years, assuring the latter of sustained returns. This line of thought empowers companies to launch loyalty programs, and they have largely worked for both brands and consumers. According to recent loyalty marketing statistics, billions of people have signed up for these programs and have purchased more from their preferred producers. In fact, the loyalty management market is experiencing massive growth through 2026.

• The global loyalty management market was valued at $4.02 billion in 2020 and is projected to reach $13.8 billion by 2026, with an annual growth rate of 22.7% (Research and Markets, 2021).
• Over 75% of US adults participate in brand loyalty programs (Research and Markets, 2021).
• In return, US brands issue rewards amounting to over $15 billion in perceived value (Research and Markets, 2021).
• Moreover, 67.6% of consumers are inclined to join a loyalty or VIP program (Yotpo, 2020).
• The latest loyalty marketing statistics reveal that there are 3.8 billion loyalty program memberships in the United States (Review 42, 2021).
• Moreover, more than 90% of companies have a loyalty initiative of some sort (Review 42, 2021).
• 60.1% of consumers join loyalty programs to gain access to product sales while 50.8% join to have early access to new products (Yotpo, 2020).
• Meanwhile, 38.9% want the offers and recommendations tailored to their preferences (Yotpo, 2020).
• In fact, 85% of consumers prefer to select the benefits and rewards of their loyalty programs (Wise Marketer, 2021).
• Also, 38% of shoppers are motivated to join loyalty programs to gain access to holiday discounts and benefits (Digital Commerce 360, 2021).
• The biggest barrier to creating a loyalty program is competing priorities with 37% of retailers citing as such. It is followed by the lack of internal resources (24%) and lack of IT support (19%) (Digital Commerce 360, 2021).

By Demographics

• 73% of millennial shoppers joined a loyalty membership program to gain access to holiday season benefits and rewards (Retail Customer Experience, 2020).
• In addition, 28% of millennial loyalty program members shop with retailers they are loyal to at least every few days (Retail Customer Experience, 2020).
• Members of Generation X, at 85%, are the most likely to continue shopping with a retailer due to its loyalty program. They are followed by Gen Z (84%), Baby Boomers (70%), and Millennials (49%) (Rare, 2019).
• Members of Gen Z, on other hand, are the most likely to increase purchasing frequency due to loyalty programs, with 80% admitting to it. They are followed by Gen X (76%), Baby Boomers (53%), and Millennials (43%) (Rare, 2019).
• 1 out of 7 millennials does not belong to any loyalty program (Medium, 2019).

The Role of Technology in Building Customer Loyalty

As the retail industry evolves with the times, the nature of customer loyalty also shifts. What was once an exercise in visiting physical stores has been replaced by mobile devices or computer screens and mouse clicks. The challenge now is how to provide great online customer service to attract hordes of digital shoppers. And this revolves around omnichannel support and responsive customer service.

The role of technology in building customer loyalty has steadily grown and is expected to stick around for years to come. In fact, shopping online is becoming a new norm due to the ongoing global pandemic.

• Over 80% of companies are investing in the omnichannel experience (SuperOffice, 2021).
• 62% of firms are also investing in artificial intelligence to improve customer experiences (Forbes, 2019).
• Meanwhile, 75% of customers prefer to communicate with humans than bots or automated machines (Wise Marketer, 2021).
• However, 42% of consumers would rather not transact with a brand that does not offer live chat or real-time customer support (Fundera, 2019).
• Moreover, if a loyalty program is implemented on an ecommerce platform, order quantity can potentially increase by 319% (Incentive Solutions, 2019).
• Monthly revenues could likewise increase by 665% (Incentive Solutions, 2019).
• Contactless payments have grown by 69% since January 2020 (Retail Leader, 2020).
• And 94% of retailers project that this trend will continue through 2021 (Retail Leader, 2020).
• Furthermore, 67% of consumers were satisfied with using their mobile to pay for goods (Retail Leader, 2020).

Did COVID-19 Affect Customer Loyalty?

One of the foremost reasons for the aforesaid drastic shift to online shopping is COVID-19. The pandemic left people to their own devices at home, thus shopping was mostly restricted to the digital realm. As such, product availability and access to a wider range of goods brought upon changes in consumer behavior. Some became more loyal to brands to help tide them over the pandemic while others went with cheaper or more accessible alternatives. Moreover, loyalty programs have been experiencing a surge in enrollments of late.

• 75% of consumers in the US changed their purchasing behavior and bought from new brands during the COVID-19 pandemic (Wise Marketer, 2021).
• 28.3% of consumers became more loyal to brands to help support them during COVID-19, of whom, 36.3% are Gen Z (Yotpo, 2020).
• Enrollment to premium loyalty programs increased by 21% during the pandemic (Wise Marketer, 2021).
• This is a good sign since 94% of premium loyalty members shop at the program provider’s store at least once a month (Wise Marketer, 2021).
• However, 40.3% of consumers have visited the physical stores less frequently since the onset of the pandemic (Raydiant, 2021).
• Also, 48% of shoppers also went with the online alternatives of brands they purchased in physical stores (Raydiant, 2021).
• Interestingly, 50% of consumers admitted that a COVID-19 vaccine would make them visit the physical stores of their preferred brands more often (Raydiant, 2021).

How can employee engagement enhance customer loyalty?

Employee engagement plays a crucial role in fostering customer loyalty. Engaged employees are more likely to deliver exceptional customer service, fostering positive interactions that drive customer satisfaction and retention. By investing in employee engagement, brands can create a supportive environment that empowers staff to provide the best experience possible. Here’s how engaged employees contribute to customer loyalty:

• Enhanced Customer Service: Employees who feel valued and motivated are more inclined to go above and beyond to meet customer needs. Their positive attitude and willingness to assist create memorable customer experiences that encourage repeat business.
• Consistency in Brand Values: Engaged employees are better aligned with the company’s mission and values, helping to convey a consistent brand message. This continuity strengthens the brand’s reputation and builds customer trust.
• Quick Resolution of Issues: When employees feel committed to their roles, they are more proactive in addressing customer concerns, leading to quicker resolutions and improved satisfaction.
• Customer Trust and Rapport: Friendly and attentive employees foster trust and build rapport with customers. Personalized service and genuine interest in customer needs can convert first-time buyers into loyal patrons.
• Lower Employee Turnover: High employee engagement leads to lower turnover, ensuring that experienced staff who know the brand and customers well remain in their roles. This stability enhances service quality and maintains strong customer relationships.

Improving Customer Retention

Customer loyalty is a driving force for consumers to not just buy products, but also support the succeeding releases of a brand. While most shoppers are loyal to only one to five brands, their patronage contributes significantly to the profits of companies. The newest customer service trends indicate that satisfied customers tend to spread the word about products and services to friends and peers. Some of these people, in turn, end up becoming customers of the mentioned company, and the cycle continues.

For a brand to experience this, it should make a conscious effort to swiftly answer the inquiries of customers and apply reasonable suggestions that can improve the response toward a product or service overall. Mobile app developers, for instance, can respond to as many comments as possible with thorough answers. They can also leverage the soundest suggestions to know how to make the product better in succeeding releases. In doing so, everybody wins, with customers happy and the developer having a superior product.

Furthermore, offering loyalty programs gently coerces repeat customers into becoming loyal ones for years. Since returning consumers bring a lot of revenue, it’s only fitting that they receive special offers and discounts to make them shop more and influence more people to become part of the customer base. This potentially brings a brand sustained revenues through each product release.

Before you work on your customer loyalty programs, you should ensure that your brand and its goods are primed to attract a lot of customers. This is where branding comes in. You can check out our comprehensive list of branding statistics so you can turn your company into a brand worth trusting.

Key Insights

• Significance of Customer Loyalty: Loyal customers significantly contribute to a brand’s sales and promotion, often being prioritized over acquiring new markets. Retaining a loyal customer base can be more cost-effective and profitable.
• Factors Influencing Loyalty: Product quality, value for money, consistent customer service, and ease of shopping are primary factors that influence customer loyalty. Additionally, shared values between the brand and its customers strengthen loyalty.
• Impact of Technology: Technology plays a critical role in building customer loyalty, especially through omnichannel experiences, AI, and live chat support. These tools enhance customer experience, leading to higher satisfaction and retention.
• COVID-19 and Loyalty Shifts: The pandemic caused a significant shift towards online shopping, impacting customer loyalty. Many consumers became more loyal to brands that they wanted to support during the crisis, while others sought more accessible alternatives.
• Loyalty Programs: Effective loyalty programs can significantly boost customer retention and spending. Customizable rewards and benefits tailored to customer preferences make loyalty programs more attractive.
• Customer Experience: A positive customer experience is crucial for retaining customers. Brands that invest in enhancing customer experience through quick, friendly service, and convenience see higher retention and satisfaction rates.

FAQ

1. Why is customer loyalty important for businesses? Customer loyalty is important because loyal customers not only contribute significantly to sales but also help in promoting the brand. Retaining loyal customers is more cost-effective than acquiring new ones and leads to increased profits over time.
2. What are the main factors that influence customer loyalty? The main factors that influence customer loyalty are product quality, value for money, consistent customer service, ease of shopping, and shared values between the brand and its customers.
3. How does technology impact customer loyalty? Technology enhances customer loyalty by providing seamless omnichannel experiences, utilizing AI for personalized interactions, and offering live chat support for real-time assistance. These technological advancements improve overall customer experience and satisfaction.
4. How did the COVID-19 pandemic affect customer loyalty? The pandemic led to a shift towards online shopping and changed consumer behavior. Some customers became more loyal to brands they wanted to support during the crisis, while others opted for more accessible or cheaper alternatives. Enrollment in loyalty programs also increased during this period.
5. What are the benefits of loyalty programs for businesses? Loyalty programs encourage repeat purchases and long-term customer retention. They provide customers with rewards, discounts, and special offers, making them more likely to continue shopping with the brand and refer it to others.
6. What role does customer experience play in building loyalty? A positive customer experience is crucial for building loyalty. Customers are more likely to stay with a brand that offers quick, friendly service, convenience, and support. Investing in customer experience leads to higher retention and satisfaction rates.
7. How can businesses improve customer retention? Businesses can improve customer retention by focusing on delivering high-quality products, providing exceptional customer service, and offering loyalty programs with customizable rewards. Additionally, responding promptly to customer inquiries and feedback helps build trust and loyalty.
8. Why is it more cost-effective to retain existing customers than to acquire new ones? Retaining existing customers is more cost-effective because it typically costs five times more to acquire new customers than to keep existing ones. Loyal customers also tend to spend more per order and contribute significantly to a brand’s profitability.
9. What are some challenges retailers face in implementing loyalty programs? The biggest challenges retailers face in implementing loyalty programs include competing priorities, lack of internal resources, and lack of IT support. These challenges can hinder the effective execution and management of loyalty initiatives.
10. How do loyalty programs influence consumer behavior? Loyalty programs influence consumer behavior by incentivizing repeat purchases through rewards and discounts. They make customers feel valued and appreciated, leading to increased spending and a higher likelihood of recommending the brand to others.

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By Nestor Gilbert

Nestor Gilbert is a senior B2B and SaaS analyst and a core contributor at FinancesOnline for over 5 years. With his experience in software development and extensive knowledge of SaaS management, he writes mostly about emerging B2B technologies and their impact on the current business landscape. However, he also provides in-depth reviews on a wide range of software solutions to help businesses find suitable options for them. Through his work, he aims to help companies develop a more tech-forward approach to their operations and overcome their SaaS-related challenges.