According to an infographic by FiveStars, 63% of marketers believe that new customer acquisition is the most important advertising goal, but does focusing on new customer acquisitions lead to a more profitable business? Well, not according to research from FiveStars.

Customer loyalty marketing is crucial to driving sales for independent retailers, even more so than acquiring new business, according to the new research. The company recently performed an analysis of 14 million store visits from more than 1 million customers, as well as the results of loyalty programs from more than 2,000 businesses. Research shows that loyal customers -- those who visit stores at least 10 times -- account for about 20% of a company’s shoppers.

What’s more, that 20% drives 80% of a company’s total revenue and comprises 72% of total visits to a business.

To understand the significant value of a loyal customer, compared to a new customer, consider the following statistics based on FiveStars’ research.

Over their lifetime, loyal customers spend 10 times more

New customers are more price-conscious; the probability of getting a sale from a new customer is 5%-20%

Only 36% of daily deal customers will spend more than the discounted price of the deal

The average conversion rate from promotions sent to new customers is less than 1%

Less than 20% of daily deal customers will return and pay full price for items

VIP and loyalty program members are 70% more likely to spread the word about a specific brand

Loyal customers have greater lifetime value: They spend more over time and generate more revenue; 65% of loyal customers want coupons and promotions emailed to them; because loyal customers know a business so well, the probability for making an additional sale or upselling is 60%-70%.

The most efficient way to grow a company and generate more revenue is by implementing a modern digital loyalty program, according to FiveStars.


Digital loyalty programs:

Help track your VIPs: Know who they are so you can improve your customer service and reward them for their frequent visits

They increase customer visits by 12%-44%

They can turn new or casual customers into loyal ones

“Focus on your loyal customers so you can make sure you’re not leaving extra revenue on the table,” FiveStars advises.

Recent Content