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 percent of customers remain loyal to just one retailer, they represent a whopping 55 to 70 percent of retail sales. They show brand the love in the following ways:
While a typical U.S. household is enrolled in 19 to 29 different loyalty programs, it only actively uses five to 12 of them.
78 percent spread the word of their favorite brand. 68 percent buy more of that brand and 54 percent abstain from buying products from any other brand.
Focus on the retention. 68 percent 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 percent reduction in the loss of customers can raise profits as much as 75 percent. This increases the value of your typical customer by 25 to even 100 percent!
Only 3 percent of businesses have a lost customer reactivation program, but more definitely should! First time customers have a 30 percent chance of turning into long term profitable customers.
Fifty-seven percent of consumers want to engage with their loyalty programs via mobile devices, but 49% don’t know whether there is an app associated with their loyalty program.
If they buy three times fairly quickly, the chance of a new customer becoming a long term customer more than doubles to 67 percent. More than 46 percent of customers between the ages of 18 and 25 say that retail rewards are more important during hard economic times, making them 27 percent more likely to join reward programs.
Communication problems can be an issue. A mere 36 percent 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 percent. 85 percent of members of loyalty programs don’t hear anything from them since the day they sign up and 81 percent 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 percent before the buy, 49 percent at the first purchase, 40 percent when they are fixing a problem and 1 percent when customer is choosing competitors.
These are the brands that have the most loyal customers: Aldi has 64 percent, USAA has 63 percent, Publix has 62 percent, Amazon has 61 percent, Credit Union has 61 percent, HEB has 60 percent, Target has 59 percent, Chick-fil-A has 59 percent and Starbucks has 59 percent.