Shep Hyken's Customer Service Blog

Customer Loyalty Programs: Stats, Facts and Opinions

For this last week in April, the final week of International Customer Loyalty Month, I want to share several more interesting statistics about customer loyalty. These statistics focus mostly on Business to Consumer types of businesses, and while the numbers may not apply to Business to Business, the concepts do. Read them with the idea of how the concepts apply to your industry and company.

Ed Hadley, Senior Marketing Manger of Neolane, Inc. posts in Cross Channel Conversation Blog the following statistics:

The average U.S. household has enrolled in more than 18 customer loyalty programs, but is only active in 8.4. (Colloquy, “The Billion Member March: The 2011 COLLOQUY Loyalty Census”) My take: Just because someone signs up for your loyalty program, it doesn’t mean they will ever do business with you again, at least in the somewhat near future.

Of the roughly $48 billion in reward points and miles issued annually, at least one third ($16 billion) goes unredeemed by consumers. (Colloquy, “The Billion Member March: The 2011 Colloquy Loyalty Census,” April 2011) My take: I’m not convinced that the $16 billion points and miles go unused. The customer may be accumulating versus spending them. That said, there are points that will never be redeemed or will expire, just not all $16 billion of them.

85% of loyalty program members haven’t heard a single word since the day they signed up. (Colloquy, “The Rules of Engagement: Loyalty in the U.S. and Canada,” 2011). My take: I’m betting that this number is somewhat accurate. There are a few programs I’ve joined that the company doesn’t contact me, but those are the minority. Most companies do reach out to their customers, however their emails or letters look like spam or junk mail.

The following stats and facts come from ClickFox’s Recent Loyalty Report. They make a good case that customers want to be loyal, and would like a good loyalty program, but the companies aren’t doing enough to follow through on their programs.

Let’s start with a quote from Marco Pacelli, CEO of ClickFox. “Customers are demanding quality products and top-notch customer service, and they’re willing to pay for it. Companies need to differentiate themselves by producing quality products and exceptional customer experiences — it is up to them to deliver on their promises by regularly evaluating customer satisfaction and making decisions in real time.” My Take: Mr. Pacelli is spot on. Consider the stats mentioned above with ClickFox’s findings below.

88% of respondents indicated that quality is a key factor in their decision to remain loyal to a brand; 72% identified customer service as a top priority. My take: These stats make a pretty strong case that loyalty comes from the combination of a high quality product and excellent customer experience. I’ve preached this for years. When you combine a quality product with quality service, one plus one is much more than two.

48% of respondents said that the most critical time for a company to gain their loyalty was when they make their first purchase or begin service. My take: First impressions count. It can be the first time you meet or work with a customer, or the 500th time. Set the tone for the first impression of that particular interaction, which sets the tone for what’s to follow.

54% of respondents would consider increasing the amount of business they do with a company for a loyalty reward, and 46 % said they already have. However, the majority of consumers (62%) don’t believe that the brands they’re most loyal to are doing enough to reward them. My take: Customers want to be loyal. They would like some type of loyalty program, but do it right. Follow through after the customer signs up or commits to your program.

Don’t let your loyalty program be gimmick, just to get customers to sign up. You can have a million card carrying members in your program, but don’t be fooled into thinking you have a million loyal customers. Unless you engage with these customers, follow through with them and make them feel special, you will only retain a percentage of these customers. And it starts with a great product that is combined with a great customer service experience.
Happy Customer Loyalty Month!

Shep Hyken is a customer service expert,  professional  speaker and New York Times bestselling business author. For information contact (314) 692-2200 or http://www.hyken.com/. For information on The  Customer  Focus™customer service training programs go to http://www.thecustomerfocus.com/. Follow on Twitter: @Hyken
(Copyright ©MMXII, Shep Hyken)

 
  1. Shep,

    I agree with your assessment of the “85% of loyalty program members haven’t heard a single word since the day they signed up” and never hearing back. It does look like junk mail or spam when they email customers. It should be more personable to their needs in my opinion. Also, first impressions really do count. That one shot, one experience is all it takes if I will return or not to any business. Great reading.

  2. Great article Shep, “88% of respondents indicated that quality is a key factor in their decision to remain loyal to a brand.”

    What does ‘quality’ really mean in this case?

    Cheers,
    Omar

    • Hi Omar – Great question. I can only make the assumption what they mean by “quality” based on my research. It is the product or quality of what they sell. If it doesn’t do what it is supposed to do (quality – does it fall apart, will it last, etc.), no matter how nice the company is, the customer will eventually find another company that sells something that does work for them. Hope that makes sense.

    • Hi Nate – Not sure what you mean by lower velocity, high ticket retail and loyalty programs. Loyalty programs are meant to get people back. However the very best loyalty program is rooted in your customer service. Deliver amazing service and tremendous value and it will be hard for customers to think about going anywhere else.

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  4. Rendell Bueno says:

    HI! Do you have statistics on how many percent are customers using loyalty cards to the total customers of any company? Preferably in the restaurant companies (food service industry).
    (For example, in the food service industry, 75% of the total customers have loyalty cards.)

    I need it for my thesis. Thanks!

    • That’s a very interesting question. We don’t do that type of research. I’m sure there is some out there. A little time on Google may help you get the answer.

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