Important Loyalty Program Statistics for 2020

by: Mark Herbert March 4, 2020

Customer loyalty is important to businesses. Loyal customers are more profitable customers. A loyalty program is a tool business can use to increase sales, differentiate their brand, and achieve a sustainable competitive advantage. But don’t believe me! These loyalty program statistics show why and how companies use loyalty programs – as well as what kind of revenue growth a loyalty program can achieve!

Loyalty Program Statistics 2020

Why Is Customer Loyalty Important?

Below are stats that show the impact of customer loyalty and retention on business growth.

Customer Loyalty on Revenue Growth

  • Companies with strong loyalty marketing programs grow revenues 2.5 times faster than their competitors and generate 100-400% higher returns to shareholders (HBR).
  • Members of top-performing loyalty programs are 77% more likely to choose your brand over the competition (Bond).
  • 20% of your current customers will make up 80% of your company’s future revenue (Zinrelo).
  • A 5% increase in customer retention increases profits by 25% to 95% (Harvard Business School).
  • Integrating a loyalty program with your e-commerce platform can increase average order quantity by 319% (Incentive Solutions).
  • 64% of companies say their loyalty program is the best way to connect with customers (Invespcro).
  • 63% of Millennial and Gen Z shoppers will not commit to brand that doesn’t have a loyalty program (AnnexCloud).
  • Acquiring a new customer costs 5 to 25 times more than retaining an existing one (HBR).
  • 75% of customers report they are more likely to make another purchase after receiving a loyalty reward (Wirecard).
  • Loyal customers spend 67% more than their peers (CMO by Adobe).
  • 71% of loyalty program members say that their membership is an important part of their relationship with the sponsoring brand (Bond).

How Do Businesses Use Loyalty Programs?

In 2019, The Harvard Business Review surveyed 400 businesses from major industries around the globe to see how they used their loyalty programs. These customer loyalty program stats can help guide your program design!

Loyalty Program Business Stat

  • 65% of businesses use their loyalty program to attract new customers.
  • 57% of businesses list building stronger emotional brand connections with customers as their primary goal.
  • 50% use their loyalty program to gain insight and data about their customers.
  • 49% use their program to increase word of mouth referrals.
  • 42% of companies use their customer loyalty program to cross-sell products and services.
  • 31% of loyalty programs are designed to increase customer spend or increase e-commerce site visits.
  • 23% of businesses use their loyalty program to re-engage customers.
  • 17% state their loyalty program is more cost-effective than their traditional marketing spend.

Customer Experience and Loyalty Program Software Statistics

Now that we know the importance of customer loyalty programs, it’s time to explore the technology you need to drive your program. These customer loyalty program statistics let you know the platforms, features, and functionality you need from the loyalty program software that empowers your program.

Loyalty Program Gamification Stat

  • 65% of all buyers expect a connected experience across all devices (Salesforce). Integration, data analytics, and mobile readiness are important software features for loyalty program success.
  • One-third of adults in the U.S. are digital natives who are comfortable exchanging more of their personal information with companies that have loyalty programs (Forrester). Data collection and segmentation tools for your loyalty program are a must.
  • Over 57% of members prefer to interact with their loyalty program on mobile devices (Pymnts). Maybe it’s time to invest in a mobile app.
  • 56% of members prefer one loyalty program over another because of ease-of-use and accessibility (Loyalty One). Focus on providing engaging, accessible platforms where customers can connect.
  • 181% more companies plan to incorporate elements of gamification into their customer loyalty programs in the next 5 years (Regalix). Beat them to the punch!
  • Loyalty program emails have up to a 55% open rate and 17% click through rate – two times and eight times higher than MailChimp benchmarks (Incentive Solutions)! Make sure your loyalty program includes robust communication tools and services!

Loyalty Program Reward Statistics

With the right goals, insights, and software in place, it’s time to choose rewards! These customer loyalty program stats will help you pick rewards that will motivate your participants!

  • Non-cash rewards are three-times more cost effective than discounts or cash prizes (The Aberdeen Group).
  • Companies with the highest customer retention and sales growth offer group travel rewards (IRF).
  • In 2019, the top redeemed categories for loyalty rewards were:
  • 36% of customers prefer gift card and debit card programs (Technology Advice).
  • Consumers are 56% more likely to join customer loyalty programs that offer tiered rewards and exclusive treatment for top customers (Technology Advice).

Get a Loyalty Program That’s Up for the Task

Hopefully these loyalty program statistics for 2020 gave you some actionable insight into designing a loyalty program your customers will love. If you’re shopping for a loyalty program provider that will provide the strategy, structure, software, support and rewards you need – well, you came to the right place!

We would love to help you engage customers, build loyalty, and improve customer retention! Just give us a call!

Additional Reading for Loyalty Program Statistics:

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About Mark Herbert

Mark Herbert is President and CEO of Incentive Solutions. He has more than 30 years of experience overseeing business operations within the incentives industry, helping companies increase channel sales, build customer loyalty, motivate employees, and grow their business.