Customer Retention Statistic (2023 Data)

After a customer makes a purchase, the relationship they have with you doesn’t end. If you’re looking to maximize revenue, it is important to keep that relationship going and to have those customers return for more.

This roundup of statistics on customer retention will give you a good idea of the state of neglect in this area of marketing.

Customer retention benefits

Let’s first look at a few statistics that show the benefits of customer retention.

Existing customers are more likely than new ones to try a new product.

Customers who are already customers convert at a rate of 60-70%.

New customers are covert only 5-20% of the time.

Just 20% of customers account for 80% of the revenue generated by your business.

By increasing your retention rate to 5%, you can boost profits by 25-95%

Spending by repeat customers is 33% higher than that of new customers

A lost customer can cost you $243 on average

Customer retention costs 7x less than customer acquisition

Spend 3x as much on your most loyal 10% customers.

Spending by your top 1% customers is 5x higher than that of the rest

Investing in your customer retention will make a huge difference to the bottom line. It can increase revenue by encouraging repeat purchases. However, it also helps to reduce costs because you don’t have to spend so much money on customer acquisition in order to achieve your sales target.

How many companies have a program to retain customers?

Stats show that the majority of businesses recognize the importance of customer retention. According to Loyalty 360’s survey:

65% of companies surveyed have a department that is primarily focused on customer retention.

Sixty-eight percent of professionals surveyed rate the effectiveness of their company’s loyalty/retention programs as somewhat or very effective.

How much does a business spend on customer retention and satisfaction?

Costs of customer retention vary depending on your business and the amount you allocate to marketing.

We do, however, know the following:

In 2021, businesses will spend $75 billion on customer retention management.

What are your main goals for customer retention?

Here are some statistics to reveal what companies and marketers hope to achieve with their customer retention campaigns:

According to 47% of professionals surveyed, the primary goal of their customer retention programs is to increase spending by customers

19% of respondents said they want to reduce their natural customer turnover rate

16 % said that the goal was to create brand advocates

10% of respondents say that their goal is to gain new customers

This last point might be surprising given that marketing is usually divided into two distinct areas: customer acquisition and retention. They often go hand in hand.

Brands that place a high priority on customer retention will often have happy and loyal customers who act as brand advocates. These loyal customers may share positive reviews about your business with friends and family and help you acquire new customers.

Customer retention metrics & KPIs

We know the primary goals for customer retention, but how can businesses track their progress in achieving these goals? We’ll find out what the most important KPIs and metrics are by looking at some statistics.

76% of companies believe that customer lifetime value is a key metric for customer retention…

Only 42% of CLVs can accurately measure CLV.

Companies measure their retention efforts by focusing on the retention and attrition rate.

57% of companies focus on revenue

Customer satisfaction and loyalty metrics are used by 55% of companies

34% of companies check their Net Promoter Score

25% of companies consider the number of customers saved

What is the average rate of customer retention?

Comparing your retention rate with your competitors can help you measure your program’s success. This metric can be affected by the nature of your company, but the statistics indicate that:

Average customer retention rates across industries are around 75.5%

Customer Retention by Industry

Let’s look at average customer retention rates across different industries.

Media and professional service industries have the highest average retention rate of 84%.

The industries with the lowest retention rates are hospitality, travel, and restaurants, at 55%.

Average customer retention rates for insurance businesses are 83%

Retail businesses average a customer retention rate of 63 percent

The banking sector’s average customer retention is 75%

Banking customer retention statistics

In the banking industry, customer retention is crucial. Here are some statistics on customer retention that are relevant for banks:

80% of customers would switch banks to a competitor that offers a superior experience.

56% of bank customers who quit say that their bank did not make any effort to retain them.

Approximately half of the customers who close their bank accounts do so in the first 90 days of opening the account.

In conclusion, banks must continue to invest in offering the best customer experience possible, particularly to newly acquired customers. Otherwise, they risk losing their business to competitors.

What is the average retention rate of mobile apps?

The average retention rates of mobile apps vary depending on the app category. The retention rate also depends on the period you are measuring. Here are some statistics that will help you benchmark the performance of your mobile app against other apps in your industry.

AverageIndustryetention rates for mobile apps across industries are 25.3%

Average 30-day retention rates for mobile apps across industries are 5.7%

The highest 1-day retention rate for comic apps is 33.8%

The highest 30-day retention rates are for traditional banking apps (13,4%) and news apps (13,3%).

Casual gaming apps retain users for a day at 32.3%, and for 30 days, it is 4.5%

The 30-day retention of dating apps is 5.1%, while the 1-day rate is 29.6%

Apps for ecommerce have a retention rate of 24.5% after a day and 5.6% after 30 days.

The 30-day retention of social apps is 3.9%, and the 1-day retention of 26.3%

These statistics demonstrate that mobile app users are not very attentive. Over 30 days, it isn’t easy to keep more than a third of your users, so you need to invest continuously in acquiring new ones.

What is the average rate of customer turnover?

Customer churn is closely linked to retention. It is a metric that tells how many customers stop using a service in a certain time frame.

Here are some statistics that show the average churn rate across industries in the US for 2020:

The highest rate of churn was recorded by businesses in the financial/credit and cable sectors, at 25 percent.

The lowest churn rates were found in big box electronics, at 11%.

The average rate of customer turnover in online retail is 22%

Customer retention strategies

What marketing strategies are used by businesses to increase customer loyalty and retain customers? Find out.

Email marketing is used by 89% of marketers to retain customers.

Social media engagement is used by 63% of marketers to retain customers.

Direct mail is used by 55% of marketers to retain customers.

Online marketing is used by 49% of marketers to retain customers (excluding SEO and social media ads).

SEO is used by 42% of marketers as a part of their strategy for customer retention.

Social media advertising is used by 41% of marketers as a part of their strategy for customer retention.

Statista’s data is based on the fact that companies use a variety of marketing strategies to retain customers. Invesp, for example, found that:

Retargeting is used by 22% of marketers to maintain customers.

39% of marketers use mobile push notifications and web push notifications to retain customers

Mobile messaging is used by 58% of marketers to retain customers.

Email is used by 52% of marketers to retain customers.

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