Companies today are keenly aware of the magical effect that customer loyalty can have on one’s business. Effectively harnessing its power means that profits go up while monthly expenses reduce. Customer loyalty performs wonders as part of a company’s client retention strategy but can also lend a hand in the customer acquisition space.
Businesses across the globe have sought to incorporate this marvellous concept into their dealings with customers. And when we consider the stats, we can see why. Here are some interesting stats and facts that you may (or may not) be aware of.
It’s not a new concept
The customer loyalty concept is not a new kid on the block. Companies have been utilizing various forms of customer loyalty systems for over two hundred years, starting with the 18th Century merchants. While the methods may have evolved through the years, the loyalty concept remains as potent as ever.
A little goes a long way
Research has shown that companies who increase their customer retention by just 5% stand to see the profits jump by up to 125%! Spending a little more time on your existing customers can make a massive difference to your company’s bank account!
Increasing the odds
According to several studies, it is far easier to sell to existing customers than to new ones. Customer loyalty data reveals that the probability of selling to an existing customer can be anywhere between 60 and 70%. By comparison, the likelihood of selling to new customers is no higher than 20%. Whether you’re a betting person or not, it’s clear where the odds will be more in your favour.
The rewarding nature of customer loyalty
Several research firms have conducted studies on the effectiveness of customer loyalty programs. The outcome of these studies generally points to the same thing: customers love being rewarded.
According to research compiled by CaptainUp, earning loyalty rewards ranks as the second-largest motivating factor for obtaining a customer loyalty program. Other studies have shown that almost 60% of internet users consider ‘earning loyalty points’ to be an essential aspect of online shopping.
Consumers enjoy receiving rewards from the companies they frequent and are more likely to continue supporting those companies in the future.
Time to get social
How active is your company on social media? If research is to be believed, this may be an important key to unlock brand engagement and customer loyalty. Research compiled by Forbes indicates that 62% of millennials are more likely to display a commitment to brands that they can engage with via social media. Now might be a great time to activate that company Twitter account!
Give back to get loyalty
Millennials also rate corporate social responsibility quite highly. Recent surveys indicate that 75% of millennials consider it important that companies give back to the community. Businesses that are committed to making a difference in the community tend to attract more support than those who don’t.
Get up close & personal
Never underestimate the value of the personal touch. According to studies done by Edelman, a global communications firm, an astounding 80% of customers will more willingly give their data if they think that their data will be used to create a tailored customer experience.
Consumers are no longer content to accept a generic experience from their preferred brands. They want an experience that speaks to their needs, their likes and dislikes, and even their schedules.
Build an emotional connection
Research continues to reveal that consumers like to feel connected to their preferred brands. It is no longer a simple transaction. According to recent studies, consumers who feel emotionally connected to a particular brand have a 306% customer lifetime value to that brand.
Emotionally-connected customers also refer their preferred brands up to 26% more often than the average customer. Translation: if your customer feels valued by your organization, they are more likely to remain loyal to your brand, spend more on your brand, and refer others to your brand.
A referral of happiness
Businesses know all too well the effect that a happy customer can have on referrals. Now, we have stats to back it up: Studies show that a customer who is satisfied with the service received will, on average, refer up to 11 people. This sword, however, cuts both ways.
Customers who are unhappy about the service they receive from a particular company will share that negative experience with up to 15 people. The lesson here is that people will always talk and it is up to the company whether people will speak about them positively or negatively.
Go mobile to keep moving forward
Consumers today reserve a special place in their hearts for their smartphones. It comes as no surprise, then, that an increasing amount of consumers prefer to engage with their loyalty programs via their smartphone devices.
According to the 2016 Bond Report on brand loyalty, 57% of customers want to use their rewards programs via apps on their smartphones. The benefits are obvious: customers have the opportunity to keep track of their rewards and loyalty points in real-time, wherever they are. With a smartphone in hand, customers can access information at the touch of a button (or three).
The customer loyalty stat sheet is a lengthy one. Research through the years has revealed so many loyalty facts and figures that it would be near impossible to list all of them here. This information serves to prove one thing: customer loyalty is an integral part of any business.
From the smallest café to the largest conglomerate, building customer loyalty is critical toward building a sustainable company if your company isn’t onboard the customer loyalty train just yet, perhaps its time to hop on. Read more in our recent article highlighting the benefits of customer loyalty programs and what it is that customers want from them.