10 Stats that Prove the Power of Loyalty Programs

Loyalty programs have become a go-to solution for businesses that want to drive repeat purchases, increase customer retention and boost overall revenue. But just how effective are these programs? As the saying goes, the numbers speak for themselves. 

Join us for a look at 10 compelling statistics that highlight the undeniable power of loyalty programs and why they’re a must-have for any brand looking to build long-term customer relationships.
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#1 - An average of 65% of a company’s revenue comes from repeat business from existing customers 

Why do we always think of attracting new customers first when it comes to marketing outreach? It’s a critical mission for any business, of course, but you know who’s more likely to buy from you in the future? Customers who have already bought from you in the past. 

Loyalty programs help you leverage the massive potential of customers that you’ve already convinced to give you a chance. They’ve already crossed that psychological barrier of making a first purchase and don’t need to be persuaded as much. They know you, they trust you and they’re open to at least considering any offer you might make. 

Loyalty programs help you organize data from those customers and craft an individualized message that speaks to their needs and interests. When two-thirds of a typical company’s business comes from repeat visits from existing customers, maintaining their interest and catering to their needs is a more profitable path than putting your resources into starting new conversations from zero with customers you first have to attract and persuade. 

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#2 - It can be up to 25x more expensive to acquire a new customer than to keep an existing one

You’ve seen some variation of this statistic before but it’s always relevant to any conversation about customer retention. It’s another reminder that the easy (and much less expensive!) victories come from looking first at the customers who are already in your tribe, in your garden, on your team or whatever metaphor you want to use for those who have already bought from you.  

Why spend all your money on attracting new clients when it costs a fraction to keep existing ones coming back? 

And while the 25x figure may be at the top end, even a 5x multiplier on the costs of generating new business versus keeping current customers highlights the value of customer loyalty and maintaining strong relationships with current clients. 

Resources spent on aggressive marketing campaigns, lead generation and initial onboarding can be far better invested in enhancing the experience of those already loyal to the brand. By focusing on retention strategies, such as personalized communication, exclusive offers and more, businesses can drastically reduce acquisition costs while simultaneously nurturing a loyal customer base that contributes to long-term profitability.

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#3 - You have a 60-70% chance of selling to an existing customer, versus a 5-20% chance of selling to a new prospect

This is another aspect of the previous two points but it deserves its own focus here. It’s another reason to question how much you’re spending on talking to a group who doesn’t know you versus a group who knows you already. 

These numbers make sense intuitively, don’t they? It just makes sense that the chances of closing a sale with a new prospect are a fraction of what they are for a customer who has already bought from you. This is the group that’s ready to receive your message and skip the “get to know you” phase because they’ve already gone through that. 

A good loyalty program takes advantage of this easier access and builds customer lifetime value (CLV) while further deepening brand loyalty. You can operate in that space where the conversation is about the value of what’s being offered and not just about who’s offering it. Meanwhile, other brands that mostly focus on attracting new business are constantly stuck at the top of the funnel. 

Where would you rather be? 

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#4 - An increase of just 5% in customer retention can deliver a 25% increase in profits

This is what you get when you combine the previous three points together.

Just think about what happens to your bottom line when your marketing budget goes to activities that pay huge dividends from customers ready to buy versus weak to non-existent results from customers who don’t know you. 

This is the impact of cultivating customer loyalty. This disproportionate growth in profitability from a modest increase in customer retention stems from the reduced costs associated with serving existing customers, the increased lifetime value they represent, and the organic marketing they generate. 

By focusing on strategies that enhance customer satisfaction, build lasting relationships and incentivize repeat business, companies can unlock significant profit potential. This highlights that even marginal improvements in retention efforts can yield exponential returns, making customer loyalty and loyalty programs a critical driver of financial success.

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#5 - 90% of loyalty program users report positive ROI, with the average ROI at 4.8x

If a business gave you $4.80 for every dollar you gave them, it wouldn’t take much persuasion to get you to sign up, right? 

That’s exactly what loyalty programs can do, according to those who use them. And that’s the average reported ROI, so even if you’re happy being average, you’re still getting paid back nearly five times for each dollar you put into loyalty programs. 

Everyone has to justify marketing budgets and it’s only reasonable that anything that doesn’t pull its own weight gets cut. Loyalty programs have an established track record of ROI success and the dollar amount at stake can be truly game-changing, especially for high pricepoint businesses. 

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#6 - Over 83% of consumer say belonging to a loyalty program influences their decision to buy again from a brand

And why wouldn’t it influence them? Belonging to a loyalty program tells you a few things about a customer

• They like the brand enough to join the loyalty program
• The brand has information about their purchase histories that help create a personalized experience
• They are invested in staying with the brand to get rewards or unlock higher levels of loyalty benefits
• They’ve given permission to communicate with them regarding offers and promotions

Put these all together and you have a customer who’s at least ready to listen when an offer is made from a brand they like. So when one of those offers connects, that customer is much more likely to buy than a new prospect. 

The lesson here is that getting customers into a loyalty program is a huge step towards making them a repeat customer and starting a long-term relationship because it gives them reasons to stay and it gives the brand an open communication channel. 

That’s a win-win situation! 

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#7 - 84% of consumers say they’re more likely to stick with a brand that offers a loyalty program

Once they start, they don’t want to stop! There’s a reason why it’s called a loyalty program!

If you’re doing your job right as a brand, participants in your loyalty program won’t want to change to any other brand. Why? Because they get rewarded for their purchases in some way. More purchases unlock even better rewards. They get personalized offers tailored to their interests. They feel valued as customers. 

All things being equal, customers prefer to stay with a brand in which they are somehow invested and there’s no better way to achieve that than with a loyalty program. 

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#8 - 77% of consumers now retract their loyalty more quickly than they did three years ago 

Wait, why are we including this on the list? Are consumers becoming less loyal? 

No, they’re switching their loyalties to brands that reward them. With the growth of loyalty programs, customers see what they have to gain by switching to brands that reward them with personalized experiences and what they’re losing by staying with brands that don’t.  

The lesson here is most customers are persuadable when it comes to trying something new, including new brands. Offering a loyalty program and communicating the value it delivers is a winning move in today’s marketplace, where such programs are a differentiator, an attention-getter and, most importantly, a great way to welcome new customers to your brand. 

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#9 - 49% of customers say they’ve made impulse purchases after receiving personalized recommendations

You know the feeling that says you deserve a little something for yourself? We’ve all been there and impulse buys are hardly a rarity and for, many shoppers, they can be a primary motivation behind many purchases. 

Loyalty programs provide the tools that brands need to set the stage for these transactions with personalized recommendations that appeal directly to individual customers at scale. With half of a customer base ready to make an impulse buy, brands can reach out at any time with a special offer with a high chance of conversion.

This is the kind of tailored marketing that customers increasingly expect in their relationship with the brands they love. It’s the product of an understanding of individual preferences that loyalty programs make possible. 

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#10 - Customers with an emotional relationship with a brand have a 306% higher lifetime value 

Which customer do you want – the one who will spend a certain amount with you or the one who will spend three times that amount?

It’s not a hard choice, but before you take advantage of it you have to cultivate a relationship that includes an emotional dimension that engages with customers. They have to care about your brand. They have to prefer to shop with you because of that emotional connection and customer loyalty programs are the best way to do it. 

Just think of what it would mean for your bottom line if you could move even a small portion of your customer base to a group that will spend three times more with you in the long term. 

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Get Started Today With TRIFFT! 

This list should be more than enough to convince you to get started with a loyalty program if you haven’t already. The numbers really do speak for themselves so talk with the team here at TRIFFT today about getting started with everything you need in a loyalty program that’s easy to deploy, customize and manage. Get in touch to learn about all the tools you can use to start creating your own impressive numbers!

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