Studies consistently show that retaining customers communication email list and selling to existing customers can improve a company's bottom line. Experts say the chances of selling to an existing customer are 60-70%. But the chance of getting a new customer to buy products is only 5-20%. Additionally, it's important to know that:
Repeat customers spend on average 31% more than first-time customers.
A 5% increase in customer retention produces more than a 25% increase in profits .
Customers who feel an emotional connection to a brand have a 306% higher lifetime value (LTV) . They stay loyal to a brand for an average of 5.1 years versus 3.4 years, and are almost twice as likely to recommend brands.
A customer loyalty program is a very effective way to boost retention.
What is a customer loyalty program?
Wikipedia defines a loyalty program as "a marketing strategy designed to encourage customers to continue to make purchases or use the services of a business associated with the program." There are many types of customer loyalty programs. For example, earning points for each purchase and redeeming them later. Or, offering discounts for spending a certain amount of money.