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Customer Loyalty

22 Interesting Customer Loyalty Facts & Statistics

Written by 
Michaela Ward
August 22, 2019

While most people have a good idea of what customer loyalty means, why it’s important, and how loyalty programs work, you’d be surprised at what the data tells us from all kinds of studies conducted in recent years.

Have a skim through these fascinating customer loyalty statistics, and how they can be used to boost customer retention and increase sales for your brand.

1. A 5% increase in customer retention can increase profits by up to 125% (Bain and Company).

2. 73% of consumers see loyalty programs as a way for brands to show loyalty to their customers, while 66% of marketers perceive loyalty programs to be a way for customers to show their loyalty to a brand (Kitewheel).

Interestingly enough, there seems to be a bit of confusion over what the point of a loyalty program actually is. How can you implement an effective loyalty program if you’re not even sure what the idea behind it is?

Ultimately, a loyalty program should benefit both the customer and the brand, but the brands that focus on their customers’ needs rather than their own will certainly achieve greater success.

3. A 2% increase in customer retention has the same effect as cutting costs by 10% (Emmet & Mark Murphy).

4. Despite the fact that a little over half of all consumers use loyalty programs in order to save money, 37.5% of consumers are looking more interested in rewards than discounts (Captain Up).

It appears that experiential rewards are rapidly catching up to discounts on the average consumer’s priority list. There is no shortage of research in recent years that indicates consumers are becoming more interested in things like exclusive access to VIP events and other experiential rewards than the standard “10% off your next purchase” perks.

5. 52% of American consumers are happy to have retailers know their purchase history if it gives them access to rewards, discounts and other offers (Euclid).

American shoppers are easing up on the scepticism surrounding their customer data and purchase history. 41% of consumers are willing to have retailers know their purchase history so long as they trust the brand, and the percentage is higher when there are rewards and discounts at stake.

Gamification in Customer Loyalty

hand throwing large dice

6. 87% of North American retailers plan to integrate gamification into their customer engagement strategies within the next five years (Snipp).

Gamification has never been more effective as a customer engagement and retention tool, and brands are catching on. In fact, more than 70% of the top 2000 companies are already using gamification to keep their customers engaged.

7. Of the companies using gamification, a third of them have seen at least a 50% increase in registration and conversion rates (TechValidate).

Wow, that’s a big increase! Imagine the difference in revenue pre- and post-gamification.

8. Brands that have already gamified their customer engagement tactics have enjoyed 47% higher engagement, a 22% increase in brand loyalty and 15% higher brand awareness (Snipp).

These statistics (and plenty more) make it difficult to argue that gamification has become an essential aspect of loyalty programs. Customer want to engage with the brands they shop with in fun, interactive and convenient ways.

Generational Differences in Brand Loyalty

generational differences with a family

9. 62% of millennials report that brand engagement is more likely to make them a loyal customer (Elite Daily).

While it’s a common misconception that millennials are less loyal to brands than older generations, recent studies indicate they are simply “pickier” about which brands they give their loyalty to. And according to Accenture, brand engagement is the key to a millennial’s loyalty.

10. Millennials and Gen Z are more immune to traditional advertising than previous generations (Elite Daily & CrowdTwist).

Forget about throwing your money at TV ads, billboards and magazine space… millennials and Gen Z-ers are more likely to make their brand loyalty decisions based on recommendations and peer reviews, so brands are better off focusing on excellent customer service!

11. 73% of millennials are willing to pay more for a product if it comes from a sustainable brand (Nielsen).

Today’s consumers are more conscious of the environment and our footprint than ever before, and that desire for sustainability has crept into retail. Brands that demonstrate good corporate citizenship and social responsibility will win a millennial’s loyalty over those that don’t… even if the price tag is a little higher.

12. Instant gratification and same-day delivery outshine any other aspect of a loyalty program from Gen Z (eMarketer).

Gen Z, on the other hand, is much more interested in convenience and efficiency – for a loyalty program to appeal to the Gen Z consumer, it needs to be quick, easy to navigate, and provide instant gratification for rewards earned.

The Digitalisation of Rewards Programs

digital loyalty App on mobile

13. The 2016 Bond Loyalty Report revealed that 57% of consumers want to engage with their loyalty programs via their mobile device.

Not only are the days of paper punch cards gone, but even POS tablet-based rewards programs are becoming a thing of the past. Why? Because consumers want to be able to track their loyalty reward status from their very own pocket.

This is a good thing, as mobile loyalty apps present numerous benefits, including the following.

14. Push Notifications drive nearly 10 times more users to make a purchase (99 Firms).

Clearly the ability to send Push Notifications to loyalty program members’ smartphones is beneficial to both the customer and the brand, because this capability has resulted in 9.6 times more users to commit to that purchase.

15. 61% of consumers subscribe to SMS messages from brands purely for incentives, coupons, or rewards points (Oracle Retail).

Apparently the same goes for text messaging – consumers are more than happy to have brands texting them if it means they are receiving personalised offers, exclusive discounts and other incentives.

This further reiterates the point that an effective loyalty program needs to be digital in order to stay front-of-mind for customers, and to offer a personalised experience with your brand.

Emerging Trends in Brand Loyalty

customer loyalty program trends

16. 57% of consumers are more likely to participate in rewards programs that have VIP tiers and exclusive rewards (TechnologyAdvice).

We touched on this earlier with Captain Up’s findings that experiential rewards are becoming a bigger incentive for consumers than discounts. If you look at brands like Starbucks, Sephora and other household names with hugely successful rewards programs, you’ll notice that there are tiers for members to strive for.

The higher the tier, the more perks customers enjoy! This creates competition, exclusivity and makes customers feel recognised and rewarded for their ongoing loyalty and engagement with your brand.

17. 80% of consumers claim they’d be more likely to give a brand their business if the brand used their customer data to provide them with a personalised customer experience (Edelman).

The “one size fits all” approach no longer cuts it for loyalty programs – consumers expect a brand’s loyalty program to be tailored to suit their individual needs. The more the customer interacts with the loyalty program and makes purchases, the more the brand can use those transactions to offer personalised recommendations on other products, as well as offer rewards that appeal to that specific customer.

18. Brands with strong omnichannel customer engagement strategies retain a staggering 89% of their existing customers (Aberdeen Group)…

…That’s a big difference to the 33% customer retention rate of brands that are failing to embrace these omnichannel customer engagement strategies!

Crucial Customer Engagement Stats

loyalty app on phone whilst shopping

19. Customers who are engaged by a brand make purchases 90% more often, and spend 60% more per transaction than those customers who aren’t engaged (Rosetta Consulting).

Nearly twice as often… that’s a lot. And considering that the amount of money spent on each of these transactions (which are happening nearly twice as often) are an average of 60% more, this results in an exponential growth in sales among your loyal customers.

20. Customers who feel an emotional connection with a brand have a 306% higher lifetime value and will recommend that brand 26% more than the average (Motista).

This demonstrates the exponential growth we just mentioned; customers who feel valued by a brand are going to grow more and more loyal to that brand, and this results in a huge margin between an engaged customer and a non-engaged customer. And it’s not just about customer retention – a loyal customer helps your attain new customers, as they become an advocate for your brand.

21. Two-thirds of consumers feel that it’s important for brands to take a public stance on social issues (Sprout Social).

In this day and age, consumers are increasingly mindful of which brands they give their loyalty to… and while things like great customer service, high quality products and personalised offers certainly dominate the criteria, Corporate Social Responsibility has become a huge factor.

Brands that practise good corporate citizenship and help spread awareness of social and environmental issues can expect higher levels of customer loyalty – especially among millennials and Gen Z.

And last but not least...

22. Existing customers spend 67% more than new customers (Bain & Company).

Arguably the most well-known and most crucial fact in customer loyalty illustrates how much more valuable customer retention is over customer acquisition. And yet, many brands fail to identify this and capitalise on it.

The first step to customer loyalty is to stop focusing on finding new customers for a moment, and make sure your existing customers aren’t about to ditch you for a brand that does a better job of looking after them.

For more interesting facts and statistics on brand loyalty and customer retention, check out Feedspot’s list of the Top 25 Customer Loyalty Blogs & Websites to Follow in 2019.

Stamp Me provides loyalty solutions to businesses large and small, from our own Stamp Me Loyalty App to fully customised loyalty and rewards programs for enterprises and brands.

Contact us if you would like to discuss a loyalty or rewards solution for your business or brand.

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