The Value Of A Loyal Customer
We all know how vital customers are to business. But do you realize how important loyal customers can be? This article will explain more about that.
While only 12 to 15 per cent of customers remain loyal to just one retailer, they represent a whopping 55 to 70 per cent of retail sales. They show brand the love in the following ways:
78 per cent spread the word of their favorite brand. 68 per cent buy more of that brand and 54 per cent abstain from buying products from any other brand.
Focus on the retention. 68 per cent of customers are fickle in that they change where they do business for little or no reason at all. It costs businesses 5 to 7 times more to find new customers than to keep old ones.
Obviously it pays to hold on to customers! Just a 5 per cent reduction in the loss of customers can raise profits as much as 75 per cent. This increases the value of your typical customer by 25 to even 100 per cent!
Only 3 per cent of businesses have a lost customer reactivation program, but more definitely should! First time customers have a 30 per cent chance of turning into long term profitable customers.
If they buy three times fairly quickly, the chance of a new customer becoming a long term customer more than doubles to 67 per cent. More than 46 per cent of customers between the ages of 18 and 25 say that retail rewards are more important during hard economic times, making them 27 per cent more likely to join reward programs.
Communication problems can be an issue. A mere 36 per cent of customers get a promotion or reward that entices them to return to the store. 1 in 4 customers receive a promotion or reward for something they will never buy.
Not many Americans see loyalty programs as very relevant, only 31 per cent. 85 per cent of members of loyalty programs don’t hear anything from them since the day they sign up and 81 per cent do not even know how or when they will get their rewards.
Loyal customers are more profitable for a variety of reasons. They tend to buy more than your average walk in customer. They are worth much more to keep than to find new customers.
The most crucial time for companies to gain brand loyalty are: 11 per cent before the buy, 49 per cent at the first purchase, 40 per cent when they are fixing a problem and 1 per cent when customer is choosing competitors.
These are the brands that have the most loyal customers: Aldi has 64 per cent, USAA has 63 per cent, Publix has 62 per cent, Amazon has 61 per cent, Credit Union has 61 per cent, HEB has 60 per cent, Target has 59 per cent, Chick-fil-A has 59 per cent and Starbucks has 59 per cent.