37+ Customer Retention Statistics For 2023: The Definitive List
While some businesses put most of their attention on getting new customers, more and more businesses are looking into customer retention strategies. The latter knows that there is a huge upside to keeping loyal customers happy.
For starters, improving the customer experience does wonders to the customer lifetime value. Existing customers will buy more from your brand if they’re rewarded for their loyalty.
In this post, you’ll find the latest customer retention statistics that you need to know.
These stats will show you just how important excellent customer service really is. It is the key to reducing churn and increasing retention.
Customer retention statistics – Editor’s picks
- 82% of customers expect brands to reply immediately to a question. (HubSpot)
- 80% of consumers are more likely to buy from a brand if they’re offered a personalized experience. (Epsilon)
- 73% said that their customer experience has an impact on their purchasing decisions. (PWC)
- Businesses are projected to spend $641 billion on customer experience technologies by 2022. (International Data Corporation)
- Only 18% of businesses prioritize customer retention. (Invesp)
Key customer retention statistics
These customer retention statistics will show you how important it is to collect feedback from existing customers to improve your customer loyalty programs.
How many customers expect an immediate response from brands?
82% of customers expect brands to reply immediately when they have a marketing- or sales-related question.
90% of customers want an immediate answer when they have a question or concern about customer service.
Will customers buy more products if offered a personalized experience?
Yes. 80% of consumers are more likely to buy from a brand if they’re offered a personalized experience. This is according to an online survey of 1,000 consumers aged 18 to 64 years old.
90% of respondents indicated that they find personalization appealing.
Does customer experience affect purchasing decisions?
Yes. 73% said that their customer experience has an impact on their purchasing decisions. In addition, 43% said that they would pay more for a better customer experience. 42% would pay more for a friendlier, more welcoming experience.
65% find that having a positive experience with a brand is more influential than great advertising.
What are the traits that consumers look for in a company?
Over 70% of consumers said that speed, convenience, friendly service, and helpful employees are the most important traits that companies need to get right.
82% of US-based consumers noted that they want human interaction with company employees.
54% of consumers also said that companies are struggling when it comes to customer experience and that they need to do better.
How many customers leave after experiencing poor customer service?
42% of UK customers left a business because of poor customer service experience.
Reasons for leaving include not feeling appreciated, not being able to speak with an advisor, rude or unhelpful staff, being passed around from one representative to the next, and being put on hold for a long period.
Source: New Voice Media
Do companies focus more on acquisition or retention?
44% of companies have a greater focus on acquiring new customers. Only 18% of businesses prioritize customer retention.
It should be noted that according to Invesp, it costs 5x as much to attract a new customer as it is to keep one.
What’s the average customer retention rate?
It depends on which industry the business is in. In the retail space, the average retention rate is 63%. Those in the banking space can expect a retention rate of 75%.
The average retention rate in the telecom category is 78%. Meanwhile, IT services see a retention rate of 81%. The average rate for insurance companies is 83%.
Professional services have an average retention rate of 84%. Those in the media will typically see a retention rate of 84%.
Source: Profit Well
What’s the churn rate in the global market?
Customer churn rate in the global market can go as high as 30%.
Customer retention statistics: customer experience
Buyers want amazing and consistent customer service — and businesses know this. Here are some customer retention statistics that show how companies are improving their customer retention process so that they end up with satisfied customers.
Why do businesses invest in improving customer experience?
The biggest reason why businesses invest in customer experience is to improve their cross-selling and up-selling (42%).
33% said it is to improve customer retention. 32% said it was to improve customer satisfaction.
How much will businesses spend on customer experience technologies?
Businesses are projected to spend $641 billion on customer experience (CX) technologies by 2022 according to a report by the International Data Corporation.
At the time of the report’s release, worldwide spending on CX for 2019 was expected to total $508 billion. This is a 7.9% increase from 2018.
Source: International Data Corporation via Business Wire
Which industries were expected to spend more on customer experience technologies?
In 2019, the retail industry was projected to spend the most on customer experience technologies at $56.7 billion. The technologies will focus on digital marketing, Ai-driven engagement, and order fulfillment.
And according to PWC, businesses that are in the healthcare (78%), banking (75%), restaurant (74%), and hotel (74%) industries are the most likely to benefit from positive customer experiences.
Source: International Data Corporation via Business Wire, PWC
Are customers willing to give their personal info for a great user experience?
63% of consumers said that they were willing to give up their personal information in exchange for a great customer experience.
In addition, 32% said that they’d walk away from a brand if they get a poor customer service experience.
How much can a business earn if it improves the customer experience?
Companies that earn $1 billion annually can earn an average of $700 million within three years if it starts investing in customer experience.
The source also adds that investing in customer experience initiatives has the potential to 2x the company’s revenue within 36 months.
Customer retention statistics: communication
A lot of businesses lose money due to poor customer communication. If you don’t offer consistent customer service, you will start losing customers.
These customer retention statistics will show you what happy and satisfied customers look for in a brand.
What do customers find frustrating with getting customer service help?
33% of customers said that getting put on hold is the most frustrating part about trying to get help from customer service. Another 33% said that having to repeat information as they’re passed on from one representative to another is another frustration they face.
19% said slow response time is what bothers them while 14% said that representatives not being able to resolve their issues is their main problem.
How do customers want to communicate with brands?
Customers use around 13 channels to talk with brands. What they prefer to use will depend on their intent.
83% said they prefer communicating through the company’s website when it comes to consuming marketing content. This is followed by videos (45%), email (37%), blog (28%), Facebook Messenger (23%), Twitter (21%), live chat (20%), downloaded content (19%), and others (4%).
The options are slightly different when it comes to communicating for sales. The company website is still the preferred option at 53%. It’s then followed by phone (39%), the contact form (34%), live chat (33%), self-service (30%), Facebook Messenger (18%), and others (3%).
Email at 62% is the leader in terms of customer service. Phone is next at 48%. It is followed by live chat (42%), the contact form (36%), Facebook Messenger (21%), Twitter (10%), Slack (5%), and others (1%).
Do customers think that phone calls are effective in resolving issues?
No. Only 16% of surveyed consumers believe that phone calls are an effective means of resolving an issue.
49% goes on to say that there is no ideal way to resolve a customer service problem.
Common issues cited by respondents include being put on hold for too long, not being able to speak with a real person, and having to repeat information to multiple agents.
16% of respondents said that they turn to social media to resolve issues that they’re having.
Source: New Voice Media
How important is transparency in retaining customers?
86% of Americans think that transparency from businesses is more important than ever before.
90% of consumers are more likely to give a brand a second chance after a bad experience so long as they’re clear about the situation. 85% are also more likely to stick with a brand while in the middle of a crisis.
If consumers see that brands are transparent on their social media profiles, 53% of them would consider the business for their next purchase. However, only 15% see brands as transparent on social media.
Customer retention statistics: brand loyalty
Want more repeat customers? Make them loyal to your brand. But it’s not as easy as making customers join loyalty programs. You might have to make changes to how you handle customer inquiries and improve your products as well.
Here are customer retention statistics that explain how customers stay loyal to a brand.
Do customers want to be rewarded for their loyalty?
Yes. 79% of customers said that they would want to be rewarded by brands for staying loyal to the company. And if they are, these customers are more likely to make repeat purchases from the company.
Source: Loyalty Lion
How many purchases does it take for customers to consider themselves brand loyal?
37% of buyers said that it will take 5 or more purchases from the same business before they can consider themselves loyal to a brand.
33% said that it will only take them 3 purchases to feel the same way. 17.65% said it will take four while 12.35% feel they’re loyal to a brand after only making two purchases.
What keeps a customer loyal to a brand?
55.3% of surveyed buyers said that the product that a company sells is the main reason why they stay loyal to a brand.
25.7% said they’re loyal because of the great deals they’re getting. Only 7.1% cited customer service as their reason.
Other reasons mentioned include convenience (5.7%), cause or charity (1.8%), and popularity (1.2%).
Customer retention statistics sources
There you have it – a ton of customer retention stats to hopefully give you a better understanding of how businesses reduce the churn and increase their loyal customers.
However, not enough businesses are focusing on their existing customers, despite the fact that the customer acquisition cost can be up to 5x as much compared to an existing customer.
Although the average customer retention rates vary industry to industry with professional and media services having the highest retention rate, it is worth noting that the customer experience and rewards systems are incredibly valuable to consumers.
Want to work out what your customer retention rate is? As well as your customer acquisition cost? Check out our calculators:
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