One of the most common customer retention statistics that you have likely heard is that it costs 7 times as much money to acquire a new customer as retain an existing one. Although the exact number has been up for the last few years, the basis of the statistic is to show the importance of customer retention.
In this article, we are going to review 6 statistics that you might not be as familiar with. However, these statistics continue to prove the importance of customer retention, especially in 2020. For business owners who have yet to take the plunge with customer retention marketing, we hope that these stats will show exactly why you need to get started right now, today. Let’s get started.
Benefits of Customer Retention
#1. 51% of U.S. consumers are loyal to brands that interact with them through their preferred channels of communication
Our first statistic comes from research done by Accenture, which states that 51% of U.S. consumers are loyal to brands that interact with them through their preferred channels. Customer retention is all about engaging your customers in new exciting ways, but also in ways which your audience prefers.
By meeting customers where they are and using different channels to talk with your customers, you can improve customer retention stratergies and reduce churn rate. For instance, more customers than ever before are engaging with businesses through SMS marketing to make a difference.
If you haven’t looked into the benefits of starting your own SMS program, the time to do so is now. Who knows how many customers you could be reaching?
#2. 74% of Millennials will switch to a different retailer if they have poor customer service
Although millennials have been accused of killing industries in recent news, new statistics show that the fault might have been placed on the wrong people. According to Business Wire, 74% of millennials will switch to a different retailer if they have poor customer service. Although this isn’t surprising, the millennial generation is leading a customer service revolution, yet again highlighting the importance of customer retention.
Having good customer service is the foundation of almost every customer retention strategy. For business owners who have not begun to train employees on service and make it a focus, customers are no longer willing to put up with being mistreated. Not only that, but with the world of social media, it might not just be one customer you will be losing. Don’t risk it and make customer service a focus right away.
#3. 39% of consumers avoid vendors for over 2 years after having a negative experience.
Again, we cannot stress the importance of customer experience when it comes to retention enough. A statistic from Zendesk claims that 39% of consumers avoid vendors for over 2 years after having a negative experience. Although you might think 39% doesn’t sound like a high number, the likelihood that this number will continue to rise instead of decrease is pretty good.
By starting on customer service and retention now, you can avoid losing those customers for the long hall. Additionally, if you treat customers well and they continue to churn, at least you can run remarketing campaigns with the hope of getting them back. Whereas if a customer leaves due to a bad experience, you may as well kiss that relationship goodbye.
#4. 86% of consumers are willing to pay up to 25% more for a better customer experience.
At this point you may be wondering, “Are any of these statistics good news?” Well, glad you asked. According to a report conducted on customer experience, 86% of consumers are willing to pay up to 25% more for a better customer experience. So not only does focusing on customer service help increase retention, it can boost your bottom line as well.
Hopefully these user engagement metrics are not surprising to you. After all, it’s not exactly rocket science that treating customers well leads to them returning the favor. However, when you can actually see that a better customer experience directly translates to a increase in profits, you can see the importance of customer retention plain and clear.
#5. By 2020, customer experience will overtake product and price as the key brand differentiator
Our penultimate statistic is by far the most important when it comes to planning out your marketing plan for the next few years. According to Walker, customer experience will overtake both product and price as the key brand differentiator. Not only will making customer retention techniques part of your plan improve your bottom line, but it can differentiate your brand as well.
One doesn’t have to look too far to understand that this is the case. Amazon has become one of the largest companies in the world by making customer success its champion and Apple has always risen above competitors by committing to UX design. If you want your business to succeed over the next few years, this is the way the market is headed. Are you going to get left behind or join the race?
#6. Loyal customers are 5x as likely to repurchase, 5x as likely to forgive, 4x as likely to refer, and 7x as likely to try a new offering
This brings us to our final statistic, which if we’re being honest, is actually 4-in-1. According to Experience Matters, loyal customers are 5x as likely to repurchase, 5x as likely to forgive, 4x as likely to refer, and 7x as likely to try a new offering. If a stat like this can’t highlight the importance of customer retention, we’re quite sure what will.
It does go to show that customers that are treated well the first time by the companies they interact with are more likely to continue working with that company. Again, this isn’t rocket science, but this hasn’t always been the case. As more businesses began to see these trends for what they are, more money is going to be spent on customer retention programs than ever before.
Each of these statistics points toward a growing trend, one of focusing on customer retention and trying to reduce churn rate. Beyond that, no one can tell, but by the time we will be able to, your business will have been left in the dust. Don’t let this happen and make customer retention, engagement, and service a pillar of your marketing plan today, you won’t regret it.