For those building loyalty programs, there are both known and unknown unknowns. We can take educated guesses at the known unknowns, such as how many members will sign up and what ROI a loyalty program will generate. However, the answers to the unknown unknowns come only with experience and vast amounts of data – more data than a single store could ever collect.
Data is the centre of our universe here at LoyaltyLion, so we want to make sure you’re well equipped with as much of it as possible. In a short series of three blog posts, we’ve collated 36 facts, figures and statistics to help you find answers to both the known and the unknown unknowns.
Why invest in customer loyalty programs?
- Members of loyalty programs generate between 12 and 18% more incremental revenue growth per year than non-members (Accenture)
- 75% of companies see a return on investment from their loyalty program. Only 6% do not, and the rest simply aren’t tracking (Experian)
- 66.3% of millennials indicate that they are more likely to shop from stores where they are part of a loyalty program (Aruba)
What loyalty means for customer retention and lifetime value
- After the original purchase, the likelihood of a customer making a second purchase is close to 30%, and after they make a second purchase the likelihood of a third jumps past 50% (RJ Metrics)
- A customer who joins your loyalty program is 47% more likely to make a second purchase than a customer who doesn’t (LoyaltyLion)
- Nearly 80% of companies spend less than 30% of their time and budget on customer retention-focused messaging (Accenture)
- Increasing customer retention by 2% can have the same impact as reducing costs by 10% (Bain and Co)
- The majority of a customer’s 365-day CLV is realized within the first 30 days as a customer. 65% is realized on day 1, and that grows to 79% by the three-month mark (RJ Metrics)
- The cost of bringing a new customer to the same level of profitability as an existing one is up to 16 times more (MarTech)
- The average basket size of customer that uses a loyalty reward in a purchase is 39% higher than the basket size of a customer that doesn’t (LoyaltyLion)
- 80% of a retailer’s business comes from 20% of its customers (BRP)
- The top 10% of customers on average are worth 6 times more than the average customer. The top 1% of customers are worth 18 times more than the average customer. This means a single customer in the top percentile will spend more than the entire lower 50% combined (RJ Metrics)
Head over to part two of this blog, where we’ll be looking at everything you need to know about points and rewards, or visit our blog for more ecommerce loyalty resources. You might also like to see how many of your own unknown unknowns you can answer with our Ecommerce Insights tool.