We all have some idea of how important customer loyalty is to a company’s growth. Through loyalty, brands can retain more of their customer base and ensure repeat sales. Beyond that, however, loyalty also results in existing customers advocating or representing your brand to their family and friends circle.
To illustrate the importance of this concept, we have compiled a list of some of the most interesting customer loyalty statistics over the past year. While this list is by no means exhaustive, it does provide wonderful insight into why businesses devote so much time, energy, and money to building loyalty. Give it a read!
Customer loyalty is on the rise
If the stats are to be believed, customer loyalty is at an all-time high. Not only that, but loyalty continues to grow. A recent survey of 2000 American consumers revealed that nearly 90% of respondents professed loyalty to certain brands. This represents a nearly 25% increase from the previous year. As customers become more loyal to a particular brand, companies would be wise to tailor their retention strategies to build on the brand loyalty concept.
Customer loyalty is not automatic
When asked to define brand loyalty, more than two thirds (67.8%) of respondents characterised it as “repeat purchasing”. Add to this the fact that more than half of respondents considered themselves brand loyal only after four or more purchases and you have a clearer idea of what cultivating brand loyalty will entail. No company has a divine right to any customer. Every bit of customer loyalty needs to be earned.
Incentives can influence brand loyalty
Today’s consumer thrives on incentives. The allure of rewards is so strong that it can persuade an individual to choose one brand over another brand that they’re loyal to (especially when those brands don’t offer rewards). During a recent survey, a group of consumers was asked whether the presence of an incentive would persuade them to choose one brand over another, even if they were loyal to the brand that didn’t offer the incentive. Out of the group, 18% indicated that they would always choose the brand offering the incentive, 33% indicated that they would often choose the brand with the incentive, 42% indicated that they could sometimes be persuaded and only 7% indicated that they could never be persuaded by the presence of an incentive.
What these customer loyalty stats reveal is that an overwhelming majority of consumers could conceivably be convinced to forgo brand loyalty should there be a big enough incentive. For companies, this illustrates the importance of incorporating a system of rewards into their customer value proposition.
Loyalty programs rule the roost
Loyalty and rewards programs are still the most popular way to build loyalty among customers. According to research conducted by Bond, 79% of respondents surveyed indicated that they are more likely to continue doing business with brands that have a loyalty program in place. Moreover, 73% indicated that they are more likely to recommend brands that have strong loyalty programs. Based on these statistics, it is clear that loyalty programs can improve not only repeat purchase rates
but also customer advocacy rates. Any customer retention strategy worth their salt should therefore incorporate a strong loyalty program.
Millennials are the most
When it comes to loyalty programs, data shows that millennials and Gen Z derive the most benefit and usage from their rewards. A recent CrowdTwist survey revealed some interesting stats regarding Millennials, Gen Z and their interaction with rewards programs. According to the findings, 70% of Millennials and 62% of the Gen Z generation stated that loyalty programs influence their brand choices. Millennials were also found to redeem rewards most often, with 77% redeeming rewards at least once a quarter. Given these numbers, it is understandable that marketers tend to spend most of their time trying to build loyalty among Millennials and Gen Z. This doesn’t mean, however, that other generations should be ignored.
Making a meal of loyalty
The restaurant industry is not immune to the realities of customer loyalty. Studies have shown that 46% of diners will decide on a restaurant based on whether it forms part of their loyalty program. Considering this, it makes sense for restaurant owners to take a closer look at avenues to build loyalty among their patrons. The good news is that many are already recognising the benefits of customer loyalty, with 38% of restaurant executives stating that improving digital customer engagement and building loyalty is a top priority going forward.
These are merely some of the incredible stats regarding customer loyalty. Looking at these figures, it is abundantly clear that companies have little to no hope of building a strong retention strategy without focusing on customer loyalty. As businesses continue to move into the digital space, this concept will only grow in significance as customers are flooded with greater options. Customer loyalty is what will keep them coming back to your business.
The future of customer loyalty is looking pretty exciting too! Read more about what we can expect in our recent article.