Customer Retention Statistics

20 Ultimate Customer Retention Statistics in 2024

Published on: November 12, 2023
Last Updated: November 12, 2023

20 Ultimate Customer Retention Statistics in 2024

Published on: November 12, 2023
Last Updated: November 12, 2023

Customer retention plays a key role in every business that wants to be successful over the long haul.

By implementing good customer experience strategies, you can improve your customer retention rates.

You will find out more about that in this article. 

In this resource, we will discuss customer retention statistics that impact your business and customers. 

Resource Contents show

Key Statistics

  • A mere 5% boost in customer retention can increase profits by up to 75%.
  • Approximately 44% of businesses neglect to measure customer retention rates.
  • It’s easier to get sales from an existing customer than it is from a new customer.
  • 50% of a company’s revenue comes from about 8% of their most loyal customers.
  • 82% of companies say that customer retention is less costly than customer acquisition.
  • 65% of U.S. consumers base their second buying decision on their first experience.
  • Only 42% of companies accurately measure CLV (customer lifetime value).
  • 82% of customers have come to expect brands to immediately reply to queries.
  • 91% of customers say that they prefer to buy from brands that offer more relevant offers.
  • The insurance industry has the highest customer retention rate at 84%.

Top Customer Retention Statistics in 2024

Customer Retention 531

1.  A Mere 5% Boost in Customer Retention Can Increase Profits by 75%.

Even an insignificant boost in customer retention (5%) can increase a business’s revenue by up to 75%.

The 5% increase in customer retention may seem insignificant, but the profit increase is incredibly significant. 

(Annex Cloud) 

2. Approximately 44% of Businesses Neglect to Measure Customer Retention Rates.

You would think that knowing how important customer retention is in the competitive marketplace would spark all businesses to measure their retention rates.

However, 44% of businesses neglect to measure their customer retention rates.

Measuring customer retention rates gives you the data you need to make the appropriate improvements to raise those rates.

(HubSpot Blog)

3. It’s Easier to Get Sales from An Existing Customer than It Is from A New Customer.

Statistics show that it’s easier to get existing customer sales than it is to get new customer sales.

In fact, the data says that you have a 60% to 70% chance of selling to existing customers compared to only a 5% to 20% chance of selling to new customers.

Which would you prioritize?

(Zippia)

4. Nearly 50% of A Company’s Revenue Comes from About 8% of Their Most Loyal Customers.

Data analytics show that almost 50% of an organization’s revenue can be attributed to around 8% of their most loyal existing customers.

If you’re not already incentivizing your loyal customer base, you should consider doing so as soon as possible. 

(ThinkImpact)

5. 82% of Companies Say that Customer Retention Is Less Costly than Customer Acquisition.

Customer Retention 532

If you’re wondering why you need to focus on customer retention, this statistic is telling.

Statistics reveal that 82% of companies know that customer retention is less costly than customer acquisition.

This is related to customer churn rates which should be measured and improved.

(FinancesOnline)

6. 65% of U.S. Consumers Base Their Second Buying Decision on Their First Experience.

This statistic shows that if you want a consumer to come back as a repeat customer, you need ot ensure you are providing a positive customer experience.

Sales data revealed that 65% of Americans say that customer retention occurs from the first purchase and the experience they have. 

(TrueList)

7. Only 42% of Companies Accurately Measure CLV (Customer Lifetime Value).

It’s worthy of note that 76% of companies believe that CLV (customer lifetime value) is a key metric for measuring customer retention.

Even so, 42% of companies accurately measure CLV.

As vital a role as CLV plays in terms of measuring customer retention, more companies should be accurately measuring CLV.

(Bloggingwizard)

8. 82% of Customers Have Come to Expect Brands to Immediately Reply to Queries.

We live in the digital age where instant gratification is a major part of our everyday lives.

Studies have shown that 82% of customers now expect brands to instantly reply to their questions or concerns.

Most of this is through messaging services like SMS texting and social media texting.

(Startupobonsai)

9. 91% of Customers Say that They Prefer to Buy from Brands that Offer More Relevant Offers.

Most modern customers say they prefer to buy from brands that offer them more relevant and meaningful offers.

That sentiment comes from 91% of consumers in a survey.

If you’re not personalizing your offers to be more meaningful and relevant, you can’t stand up to your competition.

(Annex Cloud)

10. The Insurance Industry Has the Highest Customer Retention Rate at 84%.

Customer Retention 533

In terms of which industry has the highest customer retention rates, insurance has an 84% customer retention rate.

Even so, there’s room for improvement, right?

Banking is second to the insurance industry with a 75% customer retention rate.

Retail is third at 63% and Hospitality brings 63% to the table in customer retention rates.

(HubSpot Blog)

11. Loyalty Programs Can Generate 54% of The Customer Base to Increase Their Spending.

This statistic means that brands can cause 54% of their customer base to spend more money simply through offering a good loyalty program.

Once upon a time, new customers got all the best discounts and offers.

Today, due to the recognition of the benefits of customer retention, loyal customers get exclusive deals through loyalty programs, which encourages higher spending.

(ThinkImpact)

12. One Bad Experience Can Cause Customers to Switch to A Competing Brand, According to 72% of Customers. 

We’re here to discuss customer retention, but we must also discuss what discourages customer retention.

In fact, 72% of customers say that a single bad experience can cause them to quit a brand and switch to a competing brand.

If you don’t want this to happen to you, focus on your existing customers.

(Zippia)

13. 33% of Consumers Say Being Put on Hold Is the Most Frustrating Part of Customer Service.

It’s reasonably necessary that sometimes customers must be put on hold to investigate something for them.

However, 33% of customers in a survey said that being put on hold is the most frustrating thing about customer service.

Therefore, it’s best to only do so as a last resort.

Some of this issue has been resolved by using AI chatbots for resolving some issues, but some issues still require the human touch.

(TrueList)

14. The Overall Average Customer Retention Rate for All Industries Is About 75.5%.

As discussed in another statistic above, the insurance industry has the highest customer retention rate at 84% which is higher than the average across industries of approximately 75.5%.

If you’re a business working to improve your customer retention rate, start comparing yours against those of your competitors.

You can learn from that data.

(Bloggingwizard)

15. Satisfied and Happy Customers Are 87% More Apt to Buy New Services and Upgrades.

Customer Retention 534

One of the biggest revenue benefits of customer retention is that happy and satisfied customers are 87% more apt to buy new services and/or upgrades for their services.

For instance, a happy customer of a streaming service is 87% more likely to upgrade their service if it’s offered to them.

It happens in retail, cable and internet services, and other kinds of services, but it can also occur when purchasing goods.

For example, if a person is happy with a certain brand of gaming system, they are more likely to buy the new ones as they are launched.

(Annex Cloud)

16. The Global Pandemic Prompted 3 out Of 4 Americans to Alter Their Shopping Behaviors.

The global pandemic literally changed the world, including how people make shopping decisions.

In the United States, 3 of 4 Americans were compelled to change their shopping habits.

This includes switching brands due to the lack of pandemic readiness services. 

(HubSpot Blog)

17. The Travel Industry Experiences a Customer Churn Rate of 18%.

Customer churn is the percentage of customers that quit using a brand’s services or products over a specific period.

The travel industry has a customer churn rate of 18%.

For reference, an acceptable customer churn rate is between 2% and 8%.

In other words, the lower the churn rate the better as you might suspect.

(FinancesOnline)

18. 42% of Customers in The UK Have Quit a Business Due to Poor Customer Service.

Customer retention is a global concept as is the customer experience.

Customer service plays a major role in the overall customer experience and customer retention.

That said, 42% of customers in the United Kingdom said they have quit a business because of poor customer service. 

(Startupbonsai)

19. Companies Across the World Spend $75 Billion Annually on Loyalty Management Systems.

Where loyalty management was once a manual process, today it’s done via software applications.

Companies all over the globe spend $75 billion annually on loyalty management systems.

This is one way to keep track of how your loyalty programs are doing and that does pertain to customer retention.

(ThinkImpact)

20. 56% of Customers Remain Loyal to A Brand that Understands Them.

Customer Retention 535

One of the aspects of being human is that we like to be understood.

We want to be around people who “get” us.

Therefore, it makes sense that 56% of customers remain loyal to a brand that understands their needs and wants while also meeting those desires.

The scope of this metric includes customer service to quality of products. 

(Zippia)

FAQs

What Is Customer Retention?

Customer retention is the process of keeping customers that you have acquired coming back for more.

This concept is as important or more important than customer acquisition.

The biggest difference is that customer acquisition is more costly and time-consuming than customer retention which is easier and less costly.

Why Is Customer Retention so Important?

Businesses and brands can’t ignore customer retention if they intend to survive and thrive.

That’s because keeping customers has a significant positive impact on a business. 

Acquiring new customers can cost 5 to 20 times more than retaining them.

Also, repeat customers tend to spend more money and buy more things than first-time customers.

What Are the Benefits of Customer Retention?

Here are a few benefits of customer retention to consider:

• Boost in revenue
• Lower costs
• Enhanced customer satisfaction
• Higher brand loyalty
• Positive WOM (word-of-mouth) marketing

What Are Some Common Customer Retention Strategies?

There are several customer retention strategies that are used to keep your customers.

The strategies you use will depend on your industry and target market.

Here are some solid customer retention strategies:

• Providing superior customer service
• Offering loyalty rewards programs
• Making the customer experience personalized
• Offering exclusive promotions and discounts
• Making it easy to do business with you

How Do You Measure Customer Retention?

There are several easy to measure customer retention such as:

• Customer churn rate where you measure the percentage of customer loss over a given period.
• CLV (Customer Lifetime Value) is a metric used to measure the total amount of revenue a customer is expected to generate in the course of their relationship with your business.
• NPS (net promoter score) which is a metric that measures how likely your customers are to recommend your company to others. 

How Can You Improve Your Customer Retention Rate?

Here are some things you can do to improve your customer retention rate:

• Focus on excellent service
• Get feedback and act on it accordingly
• Make it easy for people to do business with you
• Offer promotions and discounts
• Personalize the customer experience
• Offer loyalty programs

These are also commonly used strategies.

Conclusion

Now we can see from these statistics how important customer retention is to brands.

Moreover, customer retention correlates with excellence customer service and support.

Likewise, the overall customer experience Impacts customer retention rates.

Customer retention can be improved in many ways as mentioned throughout this article in the statistics and below in the FAQs.

If you find you’re doing something that’s not working or not doing something that will work, you can make those changes.

After reading these customer retention statistics you should have a good idea of how to properly engage and manage your customer base.

Sources

Annex CloudTrueListThinkImpact
FinancesOnlineZippiaStartupbonsai
HubSpot BlogBloggingwizard

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Written by Kelly Indah

I’m a statistics researcher here at EarthWeb with a special interest in privacy, tech, diversity, equality and human rights. I have a master’s degree in Computer Science and I have my Certified Information Systems Security Professional (CISSP) certification.