Loyalty Management Statistics 2024 By Better Customers

Introduction

Loyalty Management Statistics: Loyalty management involves strategically implementing programs to build lasting customer connections, encourage repeat business, and reduce churn.

It is defined by the customer’s consistent choice of a specific brand or service over time, extending beyond one-off transactions.

Crucial for businesses, loyalty management contributes to customer retention, a competitive advantage, revenue growth, brand advocacy, and informed decision-making through data analytics.

By fostering loyalty, businesses can differentiate themselves, increase customer lifetime value, and adapt to changing consumer expectations.

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• The revenue generated by the loyalty management market has exhibited significant growth over the years at a CAGR of 23.5 %.
• In 2020, the market revenue amounted to USD 3.65 billion, and the forecast for 2029 indicates a substantial surge, with projected revenue soaring to USD 24.44 billion.
• A loyalty program influences 75% of consumers to prefer a brand, demonstrating its impact on consumer choices.
• The viewpoint shared by 82% of business leaders is that maintaining existing customers is more economical than acquiring new ones.
• Product quality is the most significant determinant, with a 74% impact on customer loyalty.
• A significant 58% of marketers believe in the effectiveness of email campaigns as a primary means of retaining customers.
• The economic toll of inadequate customer retention in the United States is $136.8 billion annually.

Loyalty Management Market Statistics

Global Loyalty Management Market Size Statistics

• The revenue generated by the loyalty management market has exhibited significant growth over the years at a CAGR of 23.5 %.
• In 2020, the market revenue amounted to USD 3.65 billion. Followed by a notable increase to USD 4.54 billion in 2021.
• The positive trend continued in 2022, reaching a revenue of USD 5.57 billion.
• The forecast for 2029 indicates a substantial surge, with projected revenue soaring to USD 24.44 billion.
• However, this substantial growth reflects businesses’ increasing recognition and adoption of loyalty management strategies. Underlining the market’s importance in enhancing customer retention and fostering lasting relationships.

(Source: Statista)

Customer Loyalty Management & Retention Statistics

Customer Loyalty

• A loyalty program influences 75% of consumers to prefer a brand, demonstrating its impact on consumer choices.
• Additionally, 43% of customers exhibit increased spending on brands to which they maintain loyalty.
• Notably, customers who share an emotional connection with a brand boast a substantially higher lifetime value, recording a remarkable 306% increase.
• Furthermore, 60% of loyal customers tend to make more frequent purchases from their favored companies.
• These findings underscore the considerable influence and financial advantages of implementing effective loyalty strategies in business.

(Source: KPMG, Fundera, Motista, Hubspot)

Customer Retention

• The viewpoint shared by 82% of business leaders is that maintaining existing customers is more economical than acquiring new ones.
• In specific global markets, customer churn rate can reach as high as 30%.
• In comparison, the likelihood of successfully selling to a new customer falls within the range of 5% to 20%.
• In contrast, it notably rises to 60% or even 70% for customers familiar with the brand.
• The economic toll of inadequate customer retention in the United States is $136.8 billion annually.
• In various industries, 75% of members enrolled in loyalty programs showcase unwavering brand loyalty, demonstrating resilience against switching.
• Among these members, those actively engaged are the most financially efficient and lucrative for businesses.

(Source: e-Consultancy, Deloitte, Forbes, Call Miner, Think Impact)

Customer Experience

• Approximately half of dedicated customers have shifted allegiance to a competitor because that company is more relevant and better able to meet their evolving needs.
• A significant 93% of customers express a likelihood to make repeat purchases from companies that excel in providing excellent customer service.
• A substantial 62% of consumers are willing to increase their spending if their shopping experience is tailored to align with their interests.
• 75% of consumers in the United States have adjusted their shopping behaviors. Factors such as availability, price, and convenience are key influencers.
• Among those choosing a business, 53% prioritize getting good value, while 30% specifically appreciate the benefits, rewards, and privileges offered by a preferred company’s loyalty program.
• The satisfaction level of customers with a loyalty program increases eightfold if it feels personalized to their preferences.
• A notable 72% of customers are ready to switch to a competitor following a negative customer service experience.

(Source: InMoment, Hubspot Research, Business Wire, McKinsey, PwC, Forbes, Hiver Research Report)

Revenue

• The majority, specifically 80%, of your company’s upcoming revenue is anticipated to be generated by a select 20% of your current customer base.
• Companies that excel in fostering loyalty experience revenue growth at a pace approximately 2.5 times faster than their counterparts in the same industries.
• Following the introduction of a loyalty program. There is potential for a substantial increase of 319% in the average order quantity a business receives.
• Notably, loyalty programs play a pivotal role in revenue enhancement. With 50% of consumers altering their purchasing patterns to attain a higher tier within these schemes.

(Source: Gartner, HBR, Incentive Solutions, Invesp) 

Factors Influencing Customer Loyalty Statistics

• Various factors shape customer loyalty, each holding a distinct percentage of influence.
• Product quality is the most significant determinant, with a 74% impact on customer loyalty.
• Following closely is the perceived value for money, holding a weight of 66%. Emphasizing the importance of customers feeling they receive a worthwhile return on their investment.
• The consistency of products plays a crucial role, contributing to a 65% influence on customer loyalty.
• With a 56% impact, customer service underscores the significance of responsive and effective support in fostering loyalty.
• Simplicity in the shopping experience and a well-curated product selection each hold a 55% share in influencing customer loyalty.
• With a 54% impact, pricing also plays a pivotal role in shaping customers’ allegiance to a brand. Emphasizing the delicate balance between cost and perceived value.
• These factors highlight the multifaceted nature of customer loyalty. Businesses need to address a spectrum of elements to build and maintain customer allegiance.

(SourceKPMG-2019)

Common Mediums for Customer Retention

• In the realm of customer retention strategies, various mediums play crucial roles, as indicated by the preferences of marketers.
• A significant 58% of marketers believe in the effectiveness of email campaigns as a primary means of retaining customers.
• Following closely, social media emerges as a valuable tool, with 37% of marketers placing their trust in its ability to foster customer retention.
• Content marketing is also recognized as impactful, securing a 32% preference among marketers for engaging and retaining customers.
• Additionally, referral marketing holds a notable position, with 26% of marketers acknowledging its effectiveness in leveraging customer referrals to enhance retention.
• These insights highlight the diverse approaches marketers employ to build lasting connections with customers. Utilizing a combination of email, social media, content marketing, and referral strategies.

(Source: Invesp-2019)

Importance of Customer Experience in Loyalty Management Statistics

• Customer experience is paramount in the business landscape, with 89% of companies recognizing it as a pivotal element in nurturing customer loyalty.
• Notably, 33% of businesses invest in enhancing customer experience, primarily to bolster customer retention.
• A remarkable 60% of consumers gravitate toward businesses that deliver exceptional customer service.
• 80% are willing to allocate more of their spending to companies that provide a superior customer experience.
• In physical retail, 60.3% of consumers have abandoned a company due to an unsatisfactory in-store experience, and an equivalent percentage are inclined to spend more at a brick-and-mortar store offering a positive customer experience.
• Additionally, 59% of US consumers have shared negative experiences with others, contrasted with 68% who have recommended brands to friends and acquaintances based on positive encounters.
• Speed, friendliness, convenience, and support are deemed the most crucial factors for a favorable customer experience by a resounding 80% of customers.
• Lastly, it’s noteworthy that companies with annual revenues of $1 billion witness an impressive average revenue increase of $700 million over three years following investments in customer experience enhancements.

(Source: Invesp-2019, SuperOffice-2021, Aspect-2020, Fundera-2019, Raydiant-2021, Criterion-2020, Annex Cloud-2020, V12-2020)

Customer Churn Statistics

• Annually, businesses in the United States suffer a substantial loss of $136.8 billion due to customers shifting their allegiance to other brands.
• A single unfavorable encounter with a product prompts half of consumers to switch to a competitor, and this percentage surges to 80% when multiple negative experiences occur.
• Additionally, 57% of consumers will cease patronage if a brand fails to address a negative review.
• Furthermore, a lack of personalization leads to a departure of 33% of consumers from a brand.
• These statistics underscore the significant impact of customer experiences, reviews, and personalization on brand loyalty and retention.

(CallMiner-2020, Zendesk-2021, Fundera-2019, Annex Cloud-2020)

Customer Churn Statistics- by Industry

• In 2020, the United States saw varying customer churn rates across different industries.
• Among these, the cable industry registered a customer churn rate of 25%, indicating a significant level of customer turnover.
• General retail followed closely behind at 24%, while the financial and credit sector also experienced a churn rate of 25%.
• Online retail had a lower percent churn rate of 22%, while the telecom and wireless industry stood at 21%.
• In the travel industry, the customer churn rate was 18%, suggesting a relatively more stable customer base.
• On the other hand, big-box electronics demonstrated the lowest churn rate at 11%, indicating higher customer retention within this sector.
• These figures reflect the dynamics of customer loyalty and attrition in various industries in the United States during 2020.

(Source: Statista)

The Role of Technology in Customer Loyalty Management Statistics

• A significant majority, exceeding 80% of companies, are actively investing in enhancing the omnichannel experience for their customers.
• Furthermore, 62% of these businesses are directing their efforts toward leveraging artificial intelligence to elevate the quality of customer interactions.
• Interestingly, despite technological advancements, a noteworthy 75% of customers express a preference for human communication over automated bots or machines.
• Additionally, a considerable 42% of consumers indicate a strong preference for brands that offer live chat or real-time customer support.
• Moreover, implementing a loyalty program on an e-commerce platform can lead to a remarkable surge of 319% in order quantities, and monthly revenues could experience a substantial uptick of 665%.
• The adoption of contactless payments has seen a notable growth of 69% since January 2020, and 94% of retailers anticipate this trend to persist throughout 2021.
• Furthermore, 67% of consumers report satisfaction with using their mobile devices for making payments when purchasing goods.

(Source: Finances Online)

Recent Developments

Acquisitions and Mergers:

• Visa acquires YellowPepper: In 2023, Visa acquired YellowPepper, a loyalty and payments technology provider, for $100 million. This acquisition strengthens Visa’s position in the loyalty management space by integrating YellowPepper’s digital engagement tools, enabling more personalized loyalty programs for consumers across Latin America.
• Marriott acquires Welk Resorts: In 2023, Marriott International finalized its acquisition of Welk Resorts for $430 million, enhancing its loyalty management capabilities. This merger allows Marriott to integrate new loyalty program offerings into its Bonvoy program, giving members more options for vacation stays.

New Product Launches:

• Salesforce Loyalty Management Platform Expansion: In early 2024, Salesforce announced updates to its Loyalty Management Platform, incorporating AI-driven insights for better personalization and real-time customer engagement. This update allows businesses to create more targeted loyalty strategies, driving customer retention and increasing lifetime value.
• Oracle CrowdTwist Loyalty Cloud: Oracle launched its CrowdTwist Loyalty Cloud in 2023, focusing on building highly personalized and data-driven loyalty programs. The platform uses advanced analytics to offer personalized rewards, making it easier for companies to enhance customer satisfaction and loyalty.

Funding:

• Antavo raises $50 million in Series C funding: In mid-2023, Antavo, a loyalty management software provider, raised $50 million to expand its platform and improve its AI-powered loyalty solutions. This funding will support the company’s growth in the U.S. and European markets, as it aims to provide more personalized, data-driven loyalty solutions.
• Punchh secures $120 million for AI-driven loyalty services: In late 2023, Punchh, a leader in loyalty and engagement solutions for retail and hospitality, secured $120 million in funding. The funds will help the company expand its AI-driven loyalty offerings and improve customer personalization for businesses.

Technological Advancements:

• AI in Loyalty Management: Artificial Intelligence is transforming loyalty programs by enabling better customer segmentation and personalization. By 2025, over 50% of loyalty programs are expected to use AI-driven tools to predict customer behavior and offer tailored rewards, improving customer retention and satisfaction.
• Blockchain for Loyalty Programs: Blockchain technology is being integrated into loyalty management systems to improve transparency, security, and flexibility. By 2024, approximately 25% of loyalty platforms will adopt blockchain technology, particularly for managing reward points and customer data more securely.

Market Dynamics:

• Growth in Loyalty Management Market: This growth is fueled by the increasing use of advanced analytics and AI to create personalized, customer-centric loyalty programs that drive engagement across industries like retail, travel, and hospitality.
• Increased Adoption of Digital and Mobile Loyalty Programs: As digital transformation accelerates, 65% of consumers are now using mobile apps for loyalty program engagement. This shift towards mobile-first experiences is driving businesses to invest more in digital loyalty solutions that provide seamless and personalized customer interactions.

Conclusion

Loyalty Management Statistics – In summary, loyalty management is crucial for business growth, supported by various statistics. Customer retention and experience are paramount, with quality, value, and service playing key roles.

Effective loyalty programs and personalization boost spending and advocacy, while poor service and lack of personalization drive customers away. Technology, including AI and omnichannel approaches, is reshaping loyalty strategies.

Adaptation is vital with loyalty management remains dynamic, with companies seeking lasting customer connections to thrive in competitive markets.

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