If you're wondering whether you should take the time to explore customer loyalty statistics, consider this: studies show that loyal customers are willing to spend 67% more than new customers. That means if you want to increase profits and grow your business, boosting loyalty and retention should be at the top of your to-do list.
This is especially true for eCommerce businesses. With countless options available to shoppers at the click of a button, building customer loyalty has become crucial for standing up to the competition. Keep reading to discover the most up-to-date customer loyalty statistics for the eCommerce sector. Along the way, we'll discuss key insights that can help you turn one-time shoppers into repeat buyers and brand ambassadors.
The Power of Customer Loyalty
Customer loyalty plays a pivotal role in the sustained growth and profitability of eCommerce businesses. Loyal customers tend to spend more, are more likely to refer others, and are less sensitive to price changes. Let's explore some intriguing customer loyalty statistics that highlight the power of repeat shoppers.
Higher Profits and Increased Customer Lifetime Value (CLV)
Customer lifetime value, which represents the total value a customer generates throughout their relationship with a business, is substantially higher for loyal customers compared to new ones.
We've already mentioned that loyal customers are willing to spend 67% more than new shoppers. Recent data also shows that increasing customer retention rates by just 5% can lead to a 25% to 95% increase in profits. Furthermore, return shoppers account for 65% of a company's sales, while acquiring new customers costs 5x to 7x more than retaining existing ones. That means loyal customers both spend more and cost less.
More Sales
If you want to encourage more sales, customer loyalty is the name of the game. According to research by Invesp, the success rate of selling to a new customer is 5% to 20%. However, that success rate jumps all the way to 60% to 70% when selling to repeat customers.
Better Reviews
An increase in customer retention also leads to better reviews (which, in turn, can result in even more sales). KPMG reports that a whopping 86% of loyal consumers will recommend a brand to their family and friends.
Factors Influencing Customer Loyalty
To effectively cultivate customer loyalty, you need to understand what influences customer behavior and decision-making. Here are several customer loyalty statistics on the factors that influence return visitors.
Customer Service
Any study you look at will tell you that customer service plays a massive role in customer loyalty and retention. After all, it makes sense that satisfied customers will return to shop with you again and again.
In fact, 86% of American consumers say they are willing to pay more for a better customer experience. According to another Forbes study, 77% of shoppers view CX (customer experience) to be just as important as product quality. Research by PwC shows that 70% of customers rate customer service, convenience, and speed as the three most important factors in deciding whether to do business with a brand.
Personalized Experiences
Another way to increase customer loyalty is to build emotional relationships with your shoppers. You can do this by delivering personalized experiences.
A study by Epsilon found that 80% of consumers are more likely to make a purchase when brands offer personalized experiences. Tailoring product recommendations, sending targeted offers, and providing personalized communication are all ways to personalize the CX for your shoppers. 39% of customers even say they won't spend money on a brand that doesn't offer personalized experiences.
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Product Quality
Offering high-quality products and meeting customer expectations are key to driving loyalty in the eCommerce space. According to one study, 74% of consumers say product quality has the biggest influence on their loyalty to a specific brand.
Price
Of course, price also matters. In customer loyalty statistics published by Hubspot, 78% of consumers report looking for a fair price when deciding whether to buy from a company. 53% of customers also say discounts and loyalty memberships influence them to stay with brands longer.
The Cost of Poor Customer Service
While a positive experience with your brand can lead to a massive increase in customer loyalty, poor customer service can have a profoundly negative effect on your success.
According to Annex Cloud , 37% of customers will never buy from a brand again following a negative experience. Zendesk research indicates an even higher number, showing that 50% of consumers say they'll switch brands after a single bad experience. Even worse? A massive 80% will switch over multiple negative experiences.
Make sure you stay on the list of your shoppers' favorite brands by providing excellent customer service at all times.
Customer Loyalty Programs
So, you know how important customer loyalty is, and you know the factors that influence it. But, how can you encourage better loyalty and retention? Three words: customer loyalty programs. Here are some noteworthy loyalty program stats.
Membership and Engagement
A recent report reveals that the average U.S. household actively participates in 14.8 loyalty programs. However, customers are only engaged with 6.7 programs on average. This highlights the importance of designing compelling programs that capture and retain customers' attention.
Influence on Purchase Decisions
According to a survey conducted by Yotpo, 57% of customers consider a loyalty program as a significant factor when making purchase decisions. Well-designed programs that offer tangible benefits, such as discounts, exclusive offers, and early access to products, can influence customers' buying behavior.
Emotional Connection
As evidenced by the stats on personalized experiences, an emotional bond between customers and brands is instrumental in fostering loyalty. A study by Motista found that customers with a strong emotional connection to a brand have a 306% higher lifetime value compared to those who lack such a connection. Loyalty programs that evoke positive emotions and foster brand advocacy contribute to building lasting customer relationships.
The Role of Technology
In the digital landscape, technology plays a pivotal role in determining customers' favorite brands. Here are some statistics highlighting the influence of technology on customer loyalty and retention.
Mobile Commerce
Mobile commerce has gained immense traction in recent years. Data from Statistica shows mobile commerce (or mCommerce) has accounted for a higher percentage of overall eCommerce sales each year since at least 2016. This research indicates that mCommerce made up 54.8% of eCommerce sales in 2016, and was estimated to account for 72.9% of all retail eCommerce in 2021. This means that eCommerce businesses must optimize their platforms for mobile devices and provide a seamless user experience to retain mobile-savvy customers.
Social Media
Social media platforms also serve as powerful tools for inspiring customer engagement and building loyalty. A recent study reveals that 63% of consumers expect brands to offer customer service through social media channels.
Personalization Technologies
Advanced technologies, such as artificial intelligence (AI) and machine learning (ML), enable personalized experiences at scale. According to Segment, 71% of consumers feel frustrated when their shopping experience is impersonal. Utilizing personalization technologies can help e-commerce businesses tailor recommendations, offers, and communication, thereby enhancing customer loyalty.
Customer Loyalty Statistics: Final Thoughts
Customer loyalty is a critical factor for success in the highly competitive eCommerce industry. By understanding customer loyalty statistics and harnessing the power of factors such as product quality, personalized experiences and marketing strategies, customer service, and loyalty programs, businesses can build lasting relationships with their customers.
Leveraging technology to optimize the mobile commerce (or mCommerce) experience and create personalized interactions further strengthens customer loyalty. In an era where customer acquisition costs are high, investing in customer loyalty initiatives is a strategic move that can drive sustainable growth and profitability in the eCommerce landscape.
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