Essential Customer Loyalty Statistics 2017

October 5, 2017

If you’re painstakingly trying to prove the value of customer loyalty, you can relax now — we’ve done the work for you. Seriously, close all those tabs.

We’ve taken the liberty of collecting the essential customer loyalty statistics and sharing them here — all in one place for you to explore. Why? It’s simple: because the pursuit of customer loyalty is the reason Smile.io exists today!

Table of Contents

Profitability in Customer Loyalty

Increasing Your Customer Loyalty

Improving Your Rewards Program

Customer Loyalty By Generation

Customer Loyalty By Geography

 

This categorized list will give you a bird’s eye-view of the entire customer loyalty domain. Every single statistic brings your closer to understanding the benefits of customer loyalty, and better equips you to retain your customers and grow your business.

With so much retention and loyalty knowledge in one place you don’t want to forget to bookmark this page for future reading!

The Complete Guide to Customer Retention Tools
Once you're done with the numbers, it's time to put a plan into action!

 

Customer Loyalty and Profitability

A report from Bain & Company found that a 5% boost in customer retention could generate up to a 95% increase in profitability.

A 2012 study from Adobe found that the top 10% of your customer base is spending 3x more per order than your average customer, while the top 1% is spending 5x more per order. The same study also found:

  • Repeat customers are purchasing nearly 30% more items per order than first-time shoppers.
  • Compared to first-time shoppers, repeat customers are 9 times more likely to convert.
  • Repeat customers generated three to seven times more revenue per visit.
  • During the holiday season, Repeat customer spending increased 47% more than first-time shoppers.

A 2013 study from Sumall discovered that the likelihood of a customer returning increases with every purchase.

  • After 1 purchase: 27% chance of returning.
  • After 2 purchases: 45% chance of returning.
  • After 3 purchases: 54% chance of returning.
  • The same study also found that customers who spend more on their first purchase are twice as likely to convert.

Simply put, loyal customers are profitable in a variety of ways. They make bigger purchases more often — especially during peak periods like the holiday season. Many organizations certainly value their loyal customers, but these statistics really put into perspective how imperative loyalty is to the longevity and success of any business.

 

How Do I Increase Customer Loyalty?

Once you’re convinced that customer loyalty is profitable, you need to actively focus on increasing it. Thankfully, there are a number of methods with proven results!

Customer Service

A 2011 report from Oracle explored the relationship between customer loyalty and customer service:

  • 73% of customers commit to a brand because of strong customer service.
  • 89% of customers changed to a competitor after a poor customer service experience.
  • 50% of customers allow a company one week to respond to an inquiry before abandoning the service.
  • 86% of customers are willing to pay more for an improved customer experience.

The annual Global Consumer Pulse Survey from Accenture discovered key linkages between customer service and loyalty:

  • The aggregate cost of customers lost due to poor service is estimated at $1.6 Trillion.
  • Poor customer service accounted for 52% of lost customers.
  • 75% of customers in the United States prefer seeking advice from human beings.

According to a survey on customer experience by Talend, 57% of respondents said that an unaddressed negative review was the primary reason they left the brand.

50% of customers allow a company one week to respond to an inquiry before abandoning the service.

 

Thank Your Customers

John Gattorna, a visiting professor at the Macquarie Graduate School of Management, claimed that 68% of customers feel companies are indifferent to them.

At Donors Choose, a not-for-profit organization, donors who were thanked were 38% more likely to donate again.

In a study on gratitude by TD Bank, researchers discovered several linkages between customer engagement and gratitude:

  • 77% of customers appreciate when companies express their gratitude.
  • 60% of customers said personally addressed acts of gratitude are more genuine.
  • Women (64%) are more likely than men (55%) to desire personally addressed gratitude.
  • 44% said personalization is the key to genuine gratitude.
  • 36% of customers commit to a brand because of personalized experiences.
  • 34% of customers prefer to be thanked by freebies.
  • Women (41%) are more likely than men (26%) to prefer freebies.

 

Loyalty and Rewards Programs

A 2014 study from Technology Advice found that 82.4% of customers said they are more likely to shop at stores that offer some type of loyalty program.

2016 research from Accenture Interactive discovered that loyalty program members generate 12% to 18% more revenue than non-members.

In their 2016 Loyalty Report, Bond Brand Loyalty uncovered various insights into the customer perception of loyalty programs:

  • 73% of customers are more likely to recommend companies with strong loyalty programs.
  • 75% of consumers believe loyalty programs are part of their relationship with a brand.
  • 75% of American companies generate a positive return on investment with their loyalty programs.
  • 66% of consumers modify purchase amounts in order to maximize points earned.
  • 67% of consumers will change brands in order to maximize points earned.
  • The average consumer is registered in 13.4 different loyalty programs, while active in 6.7.

It’s clear from the research that taking a holistic approach to the customer experience at every touch point is imperative to building customer loyalty. Customer service, gratitude, and rewards programs span the entire customer roadmap, from the moment a customer visits your e-commerce site to the moment they checkout. Without these three key ingredients, you run the risk of losing out on valuable long-term relationships.

Build a World-Class Rewards Program
The biggest brands have obviously done their homework

 

How Do I Improve My Rewards Program?

The numbers don't lie — reward programs are a surefire way to build customer loyalty and we should know — we're experts! While launching a rewards program has never been easier thanks to Smile.io, you need to keep in mind that customer expectations are constantly evolving. The following data reveals the elements that will make-or-break the modern rewards program.

Reward Diversity

Technology Advice found in their 2014 survey that 57% of consumers are more likely to participate in rewards programs with VIP tiers and exclusive rewards.

A survey by Collinson Latitude found that 63% of program members believe a broad range of benefits and rewards is the most important part of a rewards program.

In a report by Oracle Hospitality, 71% consumers join loyalty programs for discounts, while 63% join for free products.

57% of consumers are more likely to participate in loyalty programs with VIP tiers and exclusive rewards.

 

Personalization

The 2016 Loyalty Survey by Bond Brand Loyalty also touched on the clear correlation between personalization and loyalty program satisfaction:

  • 79% of customers are very satisfied with loyalty programs with high personalization.
  • Loyalty programs that make customers feel special and recognized had 2.7 times more satisfied members.

Data collected by Virtual Incentives touches on the state of personalization in the personalized incentive domain:

  • Only 40% of respondents had ever received a personalized incentive.
  • 56% said that a personalized incentive would increase the likelihood of considering a brand.
  • 63% of respondents prefer a personalized incentive based on purchase history.

 

Mobile Experiences

Technology Advice also found in their survey that 59% of consumers are more likely to engage with rewards programs that have accompanying mobile applications.

In their 2016 Loyalty Report, Bond Brand Loyalty discovered a growing interest in loyalty programs on mobile devices, but little awareness

  • 57% of consumers want to engage with loyalty programs by using their mobile device.
  • 30% of respondents have downloaded a loyalty program mobile application.
  • 49% of respondents are unaware whether the loyalty programs in which they participate offer mobile applications.

In a report on by Vibes, 66% of smartphone users prefer loyalty programs with mobile wallet app integration.

In an age of innovation, customer expectations are high for reward programs. Punch cards and basic program benefits just don’t cut it for the modern consumer. A strong and nuanced rewards program can be the key to standing out from the competition in the highly competitive ecommerce space. Offering a range of diverse rewards will allow you to differentiate your store from the competition, while personalization will encourage a deeper relationship between you and the customer. Finally, the smartphone is the modern consumer’s toolkit — make it a priority.

Is a Rewards Program Right For You?
Now that you know the power of rewards programs, find out if your store is the right fit to start driving customer loyalty.

 

Customer Loyalty by Generation

You’ve heard the stereotypes: Millennials are fickle and Generation X is cheap, but is there really any credence to these claims? Let’s explore the various dimensions that influence brand loyalty across generational cohorts — the results may surprise you.

Generation Z is all about quality

According to a survey of 1000 consumers by Yes Lifecycle Marketing, quality matters most to Generation Z:

  • 57% indicated quality as a brand loyalty driver.
  • 50% said their last purchase decision was made on quality.
  • 28% are self-described “quality-first” shoppers.

Findings from Colloquy indicates that Generation Z is still maturing, but appears to be less enthusiastic about shopping compared to Millennials:

  • 41% view shopping as a relaxing experience, compared to 45% of Millennials.
  • 24% claim to make impulse purchases, compared to 33% of Millennials.
  • Only 46% claimed to often use coupons and discounts, compared to 55% of Baby Boomers.

 

Millennials are the most loyal, go figure

The Yes Lifecycle Marketing survey indicates Millennials are very engaged with rewards programs.

  • 22% indicated rewards programs as a brand loyalty driver, more than any other generation surveyed.
  • 15% said rewards were a purchase-driver in their most recent purchase.
  • 34% consider themselves price-savvy, while another 34% consider themselves quality-first.

Research by the International Council of Shopping found that Millennials appear to be the least sensitive to negative experiences:

  • Only 74% would switch brands after negative customer service experience, the lowest of any cohort compared to 86% of Generation X and 85% of Baby Boomers.
  • 58% stating they would stay with a brand no matter what.

A report by Colloquy corroborates the above findings on Millennial sensitivity:

  • Only 33% would be unlikely to return to a store due to lack of appreciation from sales associates.
  • Only 36% would be unlikely to return to a store if it was messy or disorganized.
  • Only 32% would be unlikely to return to a store due to inconvenient returns.

 

Generation X Values Price Above All Else

The Yes Lifecycle Marketing survey indicates Generation X is more price conscious:

  • 30% indicated price as a brand loyalty driver.
  • 85% said discounts influenced their most recent purchase.
  • 44% consider themselves price-savvy consumers.

A report by Colloquy shows that Generation X is quite tech-savvy:

  • 27% will voice their feelings on social media after a negative experience.
  • 36% enjoy shopping online to avoid going to a store.

 

Baby Boomers Seek Convenient Shopping Experiences

The Yes Lifecycle Marketing survey indicates Boomers are convenience-driven

  • 30% indicated convenience as a brand loyalty driver, more than any other generation.
  • 36% said convenience influenced their most recent purchase.
  • 16% consider themselves quality-first shoppers, the lowest of any generation surveyed.

A report by Colloquy says Baby Boomers are more sensitive to negative customer experiences:

  • 54% would be unlikely to return to a store due to lack of appreciation from sales associates.
  • 50% would be unlikely to return to a store that was messy or disorganized.
  • 54% would be unlikely to return to a store due to inconvenient returns.

Since Generation Z is still such a young cohort, they’re hard to pin down. From the research, they appear to be similar to Millennials, but with more careful buying habits. Millennials, on the other hand,appear to be the most loyal cohort due to their increased loyalty program engagement and unflinching brand loyalty.  For Generation X, discounts and freebies are imperative to building loyalty due to their price-sensitivity. Finally, just make things easier for Baby Boomers. Easy registration and simple redemption terms will attract and retain this cohort.


The above statistics and findings prove that there is no one-size-fits-all solution in customer loyalty, but rather that marketing segmentation is the key.  Understanding your customers is ultimately the best way to make them happy and, as a result, extremely loyal.

How To Build A Rewards Program For Different Generational Cohorts
Would you look at that! We have the numbers and the steps to build the perfect rewards program for consumers of all ages.

 

Loyalty Programs by Geography

Now that we’ve explored the differences between generations, let’s take a trip and explore the wide array of customer loyalty behaviours across the globe.

North America

According to data collected from Smile.io merchants, Canada has a slightly higher reward redemption rate at 16.9%, compared to 14.9% in the United States.

From Nielsen’s “How Loyal Are Your Customers?” report:

  • 48% avoid or abandon loyalty programs because they feel they do not shop at the establishment enough to benefit, the highest in the world.
  • Tend to value monetary loyalty program benefits such as discounts (82%) and free shipping (46%).

The 2016 Nielsen Global Retail Loyalty Sentiment Report:

  • 54% of Canadians to value free products as a top loyalty program benefits, compared to just 32% in the United States.
  • 37% of Americans value free shipping as a top loyalty program benefit, compared to just 21% in Canada.
  • Compared to Canadians, American consumers are more likely to use new loyalty program methods such as mobile application and third-party applications.
Examining eCommerce Reward Redemption Rates
We've seen redemptions by geography, now go and explore the other side of redemption rates

 

Latin America

From Nielsen’s “How Loyal Are Your Customers?” report:

  • 49% would abandon or avoid a loyalty for being too complicated.
  • 59% state enhanced customer service as a top loyalty program benefit.

According to the 2016 Nielsen Global Retail Loyalty Sentiment Report:

  • 40% say free products is one of the most important benefits of a loyalty program, more than any other region.
  • 86% value omni-channel point earning and redemption.
  • 85% value personalized benefits, such as discounts.
  • Brazil has the highest loyalty program participation in the region at 53%, compared to 32% in Argentina and Mexico.
40% of customers say that free products are one of the most important benefits of a loyalty program.

 

Europe

According to Smile.io data, the United Kingdom has a reward redemption rate of 15.6%

In a report from Adobe, repeat customers and returning customers make up 20% of the German e-commerce customer base, compared to just 8% in the United States.

From Nielsen’s “How Loyal Are Your Customers?” report:

  • 82% of customers felt discounts were the most important benefit of loyalty programs, while all other listed benefits- such as free shipping and enhanced customer service- fell below global averages.

55% of consumers in Finland name exclusive access to sales as a top loyalty program benefit, the next highest being Portugal at 37%.

Building Rewards Programs For Men and Women
So many elements influence our rewards programs preferences, I mean you've read this far so you should know!

 

Middle East/Africa

Data collected from the Smile.io loyalty solution reveals that South Africa has a reward redemption rate of 13.3%.

From Nielsen’s “How Loyal Are Your Customers?” report:

  • While only 42% of consumers surveyed participate in loyalty programs, 87% of consumers are more likely to shop at retailers with loyalty programs.
  • Twice as likely than the rest of the world to abandon a brand for better features.

According to the 2016 Nielsen Global Retail Loyalty Sentiment Report:

  • 26% of consumers in Morocco see customer recognition as a top program benefit, the highest in the world.
  • Traditional loyalty program methods are common in more developed countries like South Africa and UAE, while Pakistan lead the region in loyalty program mobile application usage.
26% of Moroccan shoppers value customer recognition as a top rewards program benefit, more than any other country in the world.

 

Asia-Pacific

Reward redemption rates according to Smile.io customer data:

  • 17.8% in Singapore, the highest country surveyed overall
  • 15.2% in Australia
  • 14% in New Zealand
  • 12.1% in Hong Kong
  • 9.8% in Indonesia

From Nielsen’s “How Loyal Are Your Customers?” report:

  • 92% of consumers are more likely to shop at retailers with loyalty programs.
  • 41% of customers said exclusive products or events are most important.
  • 36% of customers said special shopping hours are most important.

The 2016 Nielsen Global Retail Loyalty Sentiment Report indicates that Asia-Pacific consumers are more attracted to programs with digital and technological attributes:

  • 69% are more likely to join a rewards program with a mobile application, the highest of any other region.
  • 49% of consumers in Thailand use a retailer’s mobile application to participate in a rewards program, the highest in the region.
  • 83% of consumers like flexible access to their rewards program across various channels, including on the web and mobile.
How To Build a Rewards Program in Cosmetics
Glam up your customer loyalty with the perfect rewards program for your industry

Evidently, rewards program preferences and customer loyalty drivers differ greatly based on location. In regions with more developed economies, such as North America and Europe, more traditional monetary benefits such as discounts and free shipping are visibly more popular. While these benefits are popular across the globe, other regions tend to have very distinct loyalty program traits.

In Latin America, enhanced customer service is a uniquely sought after benefit.  This could be due to the fact that it is a heavily marketed benefit.  Conversely, it could be a result of brands providing poor customer service in the absence of a loyalty program.

In Asia-Pacific, technological integration is a must-have for many consumers. This is not surprising given the presence of many countries known for technological innovation such as Japan and South Korea. Finally, Middle East/Africa presents a unique mix of new and old methods of interacting with loyalty programs, with countries like Pakistan leading the charge in mobile integration. Ultimately every market is different, so make sure your rewards program is tailored to prevailing country preferences.

 

Cracking the Customer Loyalty Code

The first step to improving anything is understanding it. I hope this guides saves you some time and effort, allowing you to take action with your own rewards program right away. Building customer loyalty doesn’t have to be complicated - it’s just a matter of being informed about how it differs across various contexts.

If you’re looking to learn more about customer loyalty and loyalty programs, we have a wealth of resources available on our blog and Resource Center.