loyalty program statistics

Eye-Opening Loyalty Program Statistics You Need to Know



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loyalty program statistics

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Customer loyalty is one of the most valuable assets you can have. It’s no secret that finding new customers is much more expensive than retaining existing ones.

Loyal customers not only generate recurring revenue, but they also act as brand advocates, spreading positive word-of-mouth and attracting new customers. 

Creating a loyalty program is one effective strategy for building customer loyalty and boosting customer experience. A loyalty program is a structured marketing effort that rewards customers for their repeat business or other desired behavior, such as referrals or social media engagement. 

However, not all loyalty programs are created equal. Designing a program that aligns with your brand values, customer preferences, and business goals is essential. 

In this article, we will share the latest customer loyalty statistics to show you why exactly working on building a loyalty program can be one of the best decisions you can make for your business as a whole.

So, let’s start with some basic information!

The importance of customer loyalty programs

customer loyalty programs

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The global loyalty management market was worth USD 8.75 billion in 2021, and experts predict that it will grow at a compound annual growth rate (CAGR) of 16.88% from 2022 to 2027.

Improving customer loyalty can have a significant positive impact on your business. Here are some critical advantages of enhancing customer loyalty:

  1. Improved customer retention: A loyalty program can help you retain customers you worked hard to attract in the first place, preventing them from leaving and going to your competitors.
  2. Increased customer lifetime value: Increasing the income you earn per customer can improve customer acquisition ROI. A loyalty program is a practical way to achieve this.
  3. Improved brand recognition: Customers who love your loyalty program will more likely praise your business to their network, resulting in word-of-mouth recommendations and improved brand recognition.
  4. Increased customer satisfaction: Demonstrating that you care about your loyal customers will enhance their happiness, resulting in more sales, better reviews, and positive brand perception.
  5. Improved customer insights: A loyalty program provides valuable customer behavior and preferences data. This information lets you refine your marketing and sales efforts and allocate your budget more effectively.

Overall, investing in a well-designed loyalty program is a wise decision to help your business significantly. Let’s discuss how.

How customer loyalty boosts your business

benefits of a customer loyalty program

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Here are some reasons why customer loyalty programs are helpful for your business:

  1. Improved marketing and sales ROI: By earning more from every customer through loyalty programs, you can quickly recoup your initial investment in acquiring them.
  2. Increased revenue: Loyalty programs incentivize customers to remain loyal to a brand, leading to more frequent and higher-value purchases and increased revenue.
  3. Decreased costs: Selling to existing customers is less expensive than acquiring new ones. Offering discounts or exclusive access to new products to loyal customers can encourage repeat purchases, resulting in decreased costs for marketing purposes.
  4. Staying ahead of the competition: By retaining customers through effective loyalty programs, you prevent customers from switching to your competitors. Providing excellent customer service is essential in keeping customers, as poor customer service is a leading reason customers change brands.

Effective loyalty programs can be crucial in building a successful and sustainable business in a competitive market. However, you must use the appropriate tools to create an optimal business loyalty program.

That’s where PassKit comes in.

What is PassKit and how does it work?

PassKit customer loyalty platform

While rewarding loyal and satisfied customers is vital for any business, it’s equally important to ensure that the points reward system is easy to use and accessible to buyers. 

It is where PassKit comes in handy. 

Setting up digital loyalty programs with PassKit takes only a few minutes. Unlike traditional loyalty programs that rely on paper or plastic cards, PassKit helps you design a loyalty program that integrates with Apple and Google Wallet, which most customers use daily. 

With PassKit, you can use loyalty card templates to create digital membership cards, loyalty customer cards and various passes, such as digital tickets.

Customers can access their loyalty points status on mobile devices and redeem rewards by scanning their cards at your location. 

This streamlined process eliminates the hassle of carrying or losing traditional loyalty cards and provides customers and businesses instant access to crucial information.

PassKit is a convenient and effective solution for any business looking to reduce customer acquisition costs, improve its loyalty program and provide a seamless experience for its customers.

Start your free trial to evaluate our customer loyalty software.

Why should you start a loyalty program with PassKit?

digital loyalty cards

Let’s share the crucial features that make PassKit stand out from competitors.

No custom app building is required

PassKit does not require custom app building to launch your loyalty program, which saves you time and money. You can set up and manage your program entirely through our platform without coding or design skills.

Automated loyalty program processes

PassKit automates loyalty program processes, reducing any manual effort required to manage your program. You can focus on providing outstanding customer experiences while PassKit handles the backend processes.

Centralized location for loyalty program data

PassKit provides a centralized location for all your loyalty program data. You can easily access and analyze customer behavior, program engagement, and rewards redemption data.

Visual card editor

PassKit provides an easy-to-use visual card editor that allows you to create custom loyalty cards and other digital passes without any design experience.

Multi-channel distribution of loyalty program cards

PassKit lets you distribute your loyalty program cards through multiple channels, including email, SMS, and social media. It increases your program’s visibility and accessibility, making it more likely for customers to engage with it.

QR code distribution

PassKit allows you to distribute your loyalty program cards through QR codes, which customers can scan using any smartphone camera. It makes it easy for customers to access and use their loyalty cards.

CRM and POS integration

You can integrate PassKit with your CRM and POS systems, allowing you to track customer behavior and loyalty program engagement in real-time. It helps you personalize customer experiences and make data-driven decisions.

Contactless shopping

PassKit promotes contactless shopping by enabling customers to use digital loyalty cards without physical contact. It provides a safe and convenient shopping experience, especially during a pandemic.

Push notifications and location-based reminders

PassKit allows you to send push notifications and location-based reminders to your customers, reminding them of upcoming rewards or promotions. It helps increase engagement and loyalty program participation.

Personalized experiences

PassKit helps you create personalized experiences by allowing you to segment your customers and send targeted offers and rewards. It increases the likelihood of program engagement and customer retention.

Multi-language translation

PassKit offers multi-language translation for your loyalty program cards, making them accessible to a broader audience. It is beneficial for businesses operating in multicultural regions.

Digital passes creation

PassKit enables you to create various digital passes, including loyalty program cards, e-gift cards, event tickets, and boarding passes. It makes PassKit a versatile tool for managing all your current and future needs.

All you need to do is start your free trial to use our platform.

Now that you understand the significance of customer loyalty, the advantages of implementing loyalty programs, and the ideal platform to achieve your objectives, it’s essential to review some crucial statistics that reflect the industry’s current state. 

These statistics will assist you in making informed decisions and accelerating the process of initiating a loyalty program.

Loyalty program statistics to boost your decision-making

loyalty program statistics

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If you still need convincing about the importance of loyalty programs, here are some eye-opening loyalty program statistics that will help you change your mind.

Demographics of loyalty program members

According to industry statistics, younger consumers are more interested in shopping and participating in loyalty programs. 

However, older and middle-aged populations tend to be more consistent and reliable when it comes to their loyalty to a brand. It can be beneficial for businesses, as these demographics are likely to spend more money themselves and may also purchase for their children and grandchildren. 

In addition, women are more likely to register and use loyalty programs than men. These statistics highlight important business considerations when developing loyalty programs and marketing campaigns.

Customer retention rates with loyalty programs

Improving customer retention, even by a small percentage, such as 5%, can significantly impact your profits. 

Research has shown that such an increase in loyalty can result in a 25% or more increase in average profit per customer. It is essential since acquiring new customers can be costly and time-consuming. 

Customer lifetime value with loyalty programs

This statistic refers to the customer lifetime value improvement. By increasing customer loyalty by just 7%, a brand can expect a significant increase of up to 85% in the money customers spend over their lifetime.

Customer engagement with loyalty programs

loyalty program engagement statistics

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Having engaged customers is crucial for businesses as it can increase the share of wallet, profitability, and revenue by 23%. Implementing a loyalty program is one effective method to keep customers engaged and loyal to your brand.

Redemption rates of loyalty program rewards

An average redemption rate of approximately 14% is typical for loyalty programs. However, reaching above 20% is considered a significant achievement. 

If your redemption rate falls below 15%, it may indicate that you need to change your loyalty program.

Customer satisfaction with loyalty programs

loyalty program customer satisfaction statistics

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Research shows that 94% of Americans are willing to recommend a product they consider “very good,” making word-of-mouth referrals from loyal customers a valuable asset. 

Investing in premium loyalty programs can ensure customer satisfaction and increase the likelihood of positive recommendations.

The impact of rewards on customer behavior

Research indicates that reward programs do not alter customer behavior but strengthen loyalty. 

It is logical since the purpose is to reward current customers rather than entice new ones to make purchases, resulting in genuine supporters of your product, service or brand.

The impact of personalization in loyalty programs

To create a loyal customer base, providing a personalized experience is essential. While more than half of customers expect personalization, two-thirds feel they are treated like numbers

It highlights the importance of avoiding one-size-fits-all solutions and focusing on detailed segmentation to create genuine customer connections.

The impact of social media on loyalty programs

Social media channels have become essential for existing and potential customers to interact with brands. Therefore, they play a crucial role in establishing brand loyalty. 

However, instead of solely relying on direct advertisements, creating brand experiences on social media channels can lead to a significant increase of 70% in ROI.

The role of mobile in loyalty programs

mobile loyalty programs

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It’s well-known that customers prefer using mobile devices for loyalty program engagement. As many as 72.4% of customers subscribe to loyalty programs while browsing online

It highlights the importance of PassKit, which can blend effortlessly with customers’ regular routines and help your business stay in line with the latest consumer trends.

The effectiveness of email marketing in loyalty programs

Although emails have been a long-standing online communication channel, they remain an effective way to promote products and services. 

Recent surveys indicate that up to 59% of respondents admitted that emails significantly influenced purchasing decisions. 

Therefore, creating a personalized customer experience, with rewards and loyalty emails, can help engage customers and increase sales. 

The impact of gamification on loyalty programs

Studies have shown that incorporating game elements into marketing activities throughout the customer journey can significantly impact customer behavior and decision-making, making gamification an incredibly effective strategy.

The impact of tiered loyalty programs

Loyalty programs can have varying impacts, depending on whether they are paid or free. 

Customers who subscribe to paid loyalty programs are 60% more likely to make purchases, while those who join free programs are only 30% more likely to do so. 

However, since more customers opt for free programs, they can still generate more sales in absolute numbers.

The impact of exclusivity on loyalty programs

Offering exclusive customer access is a highly effective sales strategy that has delivered results in multiple industries. 

Therefore, it is an excellent addition to your brand’s loyalty program. 

By providing exclusive access to only your most loyal customers, you can make them feel special, increasing sales.

The impact of referrals on loyalty programs

referral progam statistics

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According to research, 81% of customers rely on recommendations from friends and family rather than brands. 

Hence, incentivizing loyal customers to recommend your products to their network can benefit both parties. 

You can gain new, reliable customers who receive discounts, and those who refer you also get a bonus.

The effectiveness of point-based vs. tiered loyalty programs

Since an average company loses up to 30% of customers per year due to the lack of loyalty, it makes sense to spend some time and develop several customer loyalty programs. 

It’s good to know that 37% of customers are willing to pay to upgrade to an enhanced loyalty program tier. 

Conversely, almost 70% of shoppers claim that the availability of loyalty/rewards program points influences their decision on where to shop. Furthermore, 57.4% of consumers join such programs to save money, while 37.5% join to receive rewards.

The role of customer data in loyalty programs

According to research, 75% of consumers in the US have adopted new shopping behaviors in response to the COVID-19 pandemic due to changes in prices, inflation, store closures, or logistics issues. 

While these changes present new opportunities for brands, they also signal the importance of building a loyal customer base.

The impact of loyalty programs on revenue growth

Customer experience optimization can bring significant returns on investment, with 60% of customers making another purchase. Additionally, repeat customers tend to recommend the brand to others and leave positive reviews, leading to long-term revenue growth.

The effectiveness of different types of rewards in loyalty programs

Which type of customer loyalty management program you pick is often determined by the type of business you run. 

A survey has revealed that 84% of retailers who have implemented a premium loyalty program rate the profitability of their program at eight or higher out of 10. It indicates that point-based loyalty programs can successfully boost customer engagement and drive business profits.

The Global Customer Loyalty Report 2022 found that businesses with tiered loyalty programs reported a return on investment 1.8 times higher than those without tiers.

Loyalty program statistics: The bottom line

The statistics about customer loyalty speak for themselves, demonstrating the significant benefits loyalty programs can bring to your business. 

While advanced customer loyalty apps like PassKit can make these programs more efficient and hassle-free for you and your customers, it’s up to you to develop and implement a compelling idea. 

If you’re still stuck on where to start, here are some excellent customer loyalty program ideas to help get your creative juices flowing.

You’ve already learned enough about customer loyalty statistics, so it’s time to take action. 

Sign up for PassKit and launch your customer loyalty rewards program today. 

FAQs about loyalty program statistics

Here are the answers to frequently asked questions that will help you understand the importance of running a loyalty campaign.

What percentage of customers join a loyalty program?

Studies have shown that up to 79% of customers tend to establish some relationship with the brands they purchase from. 

It could be through subscribing to newsletters, becoming members of loyalty programs, or other similar actions that foster a sense of connection with the brand.

What are the statistics for loyal customers?

There are several statistics related to loyal customers:

Based on recent statistics on customer loyalty, most customers (54.7%) are loyal to only 1 to 5 brands, whereas 31.1% of customers are loyal to 6 or more brands.

Customers who are members of loyalty programs tend to generate 12-18% more revenue growth per year than non-members. The loyalty programs that perform the best increase revenue from customers who use them by 15-25% each year.

Brands that understand their customers can retain their loyalty, as 56% of customers remain loyal to such brands. Furthermore, existing customers contribute 65% of a company’s business. Increasing customer retention by a mere 5% can lead to a 25-95% profit increase.

Do more than 90% of companies have a customer loyalty program?

Determining an exact number is difficult, as it would require a global survey of all companies. However, many successful businesses offer rewards to their loyal customers, incentivizing them to continue patronizing the brand. 

With the availability of tools like PassKit, implementing a loyalty program is not limited to large enterprises, as it only requires an internet connection to get started.

Do 79% of consumers say loyalty programs make them more likely to continue doing business with brands?

Studies have revealed that 79% of customers consider brand loyalty crucial when purchasing. 

This statistic proves that loyalty campaigns can significantly impact customer engagement and retention. 

Therefore, there is no reason not to consider implementing a customer loyalty program of your own using tools such as PassKit.

What are the statistics for customer retention?

To put it in perspective, on average, a company loses between 10% to 25% of its customers annually. However, the average customer retention rate across all industries is approximately 75.5%.

According to research, 91% of customers are inclined to buy from brands offering relevant and meaningful promotions.

Regarding customer retention rates, the retail industry has a rate of 63%, while banking has a rate of 75%, telecom has a rate of 78%, IT has a rate of 81%, and insurance has the highest rate of 83%.

Do 43% of customers spend more money on brands they are loyal to?

Statistics show that 43% of customers worldwide tend to spend more money on brands they are loyal to. Although building loyalty may require some time and effort, the rewards can be significant, making it a worthwhile investment.

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