A company’s retention efforts can significantly impact its profitability. A 5% increase in retention rates could potentially boost profits by 25% to 95%. On average, businesses across all industries see a customer retention rate of about 75.5%.
Retaining existing customers is also five times more cost-effective than acquiring new ones. Companies typically generate 65% of their revenue from repeat customers, who often spend 67% more than first-time buyers.
This article covers the most recent statistics on customer retention rates, including the average retention rate across various industries, and provides additional insights into the factors influencing retention.
Customer Retention Statistics 2025: Top Highlights
- The average customer retention rate across all industries is around 75.5%.
- A good customer retention rate ranges from 35% to 84%.
- The media and professional services industry has the highest retention rate at 84%.
- Retaining customers is 5 times less expensive than acquiring new ones.
- A 5% increase in customer retention can boost profits by 25% to 95%.
- Businesses typically lose 10% to 25% of their yearly customer base.
- Companies generate 65% of their business from existing customers.
- Existing customers spend an average of 67% more than new customers.
Average Customer Retention Rate By Industry
The average customer retention rate across all industries is approximately 75.5%.
Among the top performers, the media and professional services sectors lead with an impressive 84% retention rate. The automotive, transportation, and insurance industries follow closely at 83%.
On the other end of the spectrum, the fintech industry has the lowest retention rate, at just 37%, while edtech trails even further, at only 4%.
Key factors such as client satisfaction, switching costs, and the quality of customer service influence these variations in retention rates across industries.
The following table displays the customer retention rates across different industries.
| Industry | Customer Retention Rates |
|---|---|
| Media | 84% |
| Professional Services | 84% |
| Automotive & Transportation | 83% |
| Insurance | 83% |
| IT Services | 81% |
| Construction & Engineering | 80% |
| Financial Services | 78% |
| Telecommunications | 78% |
| Healthcare | 77% |
| IT & Software | 77% |
| Banking | 75% |
| Consumer Services | 67% |
| Manufacturing | 67% |
| Retail | 63% |
| Hospitality, Travel, Restaurants | 55% |
Source: Statista, Zippia, Shopify, Survey Sparrow.
General Customer Retention Stats
This section provides insights into General Statistics related to average customer retention rates and factors that retain customers.
What Is A Good Customer Retention Rate?
A good customer retention rate typically falls between 35% and 84%, with the exact figure depending on the industry.
Achieving a retention rate of 35% or higher over eight weeks in the SaaS sector is considered a great target.
Source: USER Voice.
Good Quality Products And Frequent Discounts Can Help Increase Retention Rates By Over 50%
55.3% of consumers are loyal to a brand because they love the products.
Further, 25.7% of the consumers are loyal due to the great deals and discounts the brands offer.
Hence, the brands must focus on their product quality and, at the same time, offer catchy deals to their loyal customers.
The following table displays the factors that make consumers loyal to the brands.
| Reason For Being Loyal To The Brand | Percentage Of Consumers |
|---|---|
| Products | 55.3% |
| Great deals | 25.7% |
| Customer service | 7.1% |
| Convenience | 5.7% |
| Others | 3.2% |
| Causes or charity | 1.8% |
| It’s popular | 1.2% |
Source: Yotpo.
89% Of Marketers Use Email For Customer Retention
Social media engagement and direct mail are the second and third most used tactics.
Meanwhile, television ad usage for customer retention has declined. TV adverts and direct response TV ranked at the bottom of the list, with just 7% and 3% of marketers using the method.
The following table displays the top methods used by marketers for customer retention.
| Delivery Method Used for Retention | Percentage of Marketers Using Method |
|---|---|
| 89% | |
| Social media engagement | 63% |
| Direct mail | 55% |
| Online advertising* | 49% |
| Search engine optimization (SEO) | 42% |
| Social media advertising | 41% |
| Mobile Marketing | 33% |
| Webcasts | 31% |
| Search engine marketing | 29% |
| Affiliate marketing | 26% |
Source: Exploding topics.
Customer Retention vs Customer Acquisition
Focusing on consumer retention rather than consumer acquisition is more beneficial. Here’s why-
Retaining Old Customers Costs 5 Times Less Than Acquiring A New Consumer
If you increase customer retention by 5%, Your profits can increase by 25% to 95%.
The success rate of selling a product to a customer you already have is 60% to 70% as compared to the success rate of selling the product to a new customer, which is 5% to 20%.
Hence, if a company spends more money on customer acquisition, it is more likely to spend more money trying to convert prospects than it should.
Source: Outbound Engines, LinkedIn.
Only 18% Of The Companies Prioritize Customer Retention Over Customer Acquisition
Meanwhile, 44% of the businesses focus primarily on customer acquisition.
However, customer retention and acquisition are essential for the sustainability and growth of businesses.
Source: LinkedIn.
Existing Consumers Spend 31% More Than New Customers
Plus, they are 50% more likely to try out a new product.
As loyal consumers are more familiar with your brand, there are more opportunities to upsell products, including add-ons or other higher-level subscription plans. Here, you can also cross-sell other products of your brand to the loyal consumers.
Source: Forbes.
Impact Of Customer Experience On Retention
This section uncovers how client experiences affect companies’ retention rates.
A 1% Rise In Customer Satisfaction Boosts Retention Rates By 5%
64% of consumers expect businesses to interact and respond to them in real-time. Hence, companies that can respond to consumer queries on time and provide real-time assistance witness an increase in customer satisfaction rates.
Further, companies with high consumer satisfaction rates see a 12% increase in stock prices.
Source: Help Scout, Survey Sparrow.
61% Would Switch To A Competitor After Just One Poor Experience
This is an increase of 22% compared to the previous year.
Comparatively, 17% of US customers walk away just after one bad experience, and 59% walk away after several bad experiences.
Meanwhile, 95% of customers who had a bad experience with a company will tell others about it.
Hence, customer experience is crucial to retaining your consumers.
96% Of The Consumers Say Customer Service Is Important For Brand Loyalty
Efficient customer service improves consumer retention rates. Customers who are happy with the service they receive are more likely to stay with the brand and buy more products or services.
Additionally, if the consumers feel they are treated well, they are more likely to increase their spending and explore additional services.
Source: Textexpander.
60% Of Consumers Will Likely Become Repeat Buyers After A Personalized Experience
76% of consumers view receiving personalized communications as a significant factor in prompting their consideration of a brand.
Hence, businesses that invest in personalization drive greater revenue through personal retention.
Impact Of Loyalty Programs On Customer Retention
Loyalty programs play a crucial role in retaining consumers. This section highlights the importance of loyalty programs and facts about loyal consumers.
83% Of Consumers Said That Membership In A Loyalty Program Influences Their Decision To Make Repeat Purchases From A Brand
The top-performing loyalty program boosts revenue by 15% to 25% annually. That’s because 84% of consumers will likely stick with a brand that offers them a loyalty program.
Source: Zinrelo.
65% Of The Customers Signups For A Brand Loyalty Program
When customers feel emotionally connected to a brand, they want to act on their loyalty, and enrolling in a loyalty program is the top choice of more than 6 in 10 consumers.
Meanwhile, 59% of the consumers said they would wait to purchase their favorite products from the brand until they are back in stock.
The following table displays what the customers would do for the brands they are loyal to.
| What Customers Would Do For The Brands They Love | Percentage Of Customers |
|---|---|
| Sign up for a loyalty program | 65.3% |
| Wait to purchase until my favorite brand’s products are back in stock. | 59% |
| Sign up for emails | 58.5% |
| Recommend it to others | 54.5% |
| Pay more for the products despite cheaper competitors | 39.2% |
| Sign up for texts | 23.1% |
| Others | 0.5% |
Source: Yotpo.
Customer Loyalty Management Market Is Valued At Over $5.5 Billion
Today’s global loyalty market is worth over $5.57 billion and is expected to grow at a CAGR of 23.5%, reaching $24.44 billion by 2029.
The following table displays the market size of the loyalty management market recorded over time.
| Year | Loyalty Management Market size |
|---|---|
| 2029* | 24.44 |
| 2022 | 5.57 |
| 2021 | 4.54 |
| 2020 | 3.65 |
Source: Statista.
The Top 10% Of Loyal Customers Spend Three Times More Per Purchase Than Other 90%
Meanwhile, the top 1% of loyal consumers spend five times more than the other 99%.
When loyal to a company, consumers are not distracted by the price or availability. Instead, they would rather pay more for the same quality service and the product they prefer.
Source: BigCommerce.
Nearly 88% Of Consumers Need Three Or More Purchases To Become Brand Loyal
37% of consumers said it takes five or more purchases to be loyal to a brand.
Meanwhile, 67.3% of shoppers expect 24/7 customer service, 58.4% value free shipping, and 71.% want more frequent discounting as a reward for their loyalty.
The following table displays the number of purchases consumers make to become loyal to a brand.
| Number Of Purchases | Percentage Of Consumers |
|---|---|
| More than 5 | 37% |
| Four Purchases | 17.65% |
| Three purchases | 33% |
| Two purchases | 12.35% |
Source: Yotpo.
Customer Churn Rates
Customer churn is the percentage of customers who stopped using your company’s product or service during a specific time frame. Here are some of the latest figures about consumer churn rates.
The Wholesale Industry Has The Highest Churn Rate Of 56%
On the other hand, the lowest churn rates are recorded in the Energy/ Utility industry.
Your product quality or consumer service are the primary factors contributing to customer churn rates.
The following table displays the median churn rates of different industries.
| Industry | Industry Churn Rates |
|---|---|
| Energy Utilities | 11% |
| IT services | 12% |
| Computer Software | 14% |
| Industry services | 17% |
| Financial services | 19% |
| Professional services | 27% |
| Telecommunications | 31% |
| Manufacturing | 35% |
| Logistics | 40% |
| Consumer packaged goods | 40% |
| Wholesale. | 56% |
Source: Customer gauge.
Average Companies Lose 10% To 25% Of Their Customers Every Year
Just 35% of the business revenue comes from new consumers, while 65% comes from existing customers. Hence, companies that wish to retain their consumers must find out why they lose consumers and try to fix the issue to reduce the churn rate.
Source: Zippia.
Conclusion: The Average Customer Retention Rate Across All Industries Is Approximately 75.5%
With businesses able to boost profits by 25% to 95% through a mere 5% increase in retention rates, the value of keeping existing customers cannot be overstated.
For example, industries like media and professional services, which have high retention rates of around 84%, demonstrate the strong rewards of prioritizing customer loyalty. On the flip side, sectors like fintech and edtech struggle with much lower retention rates.
For example, industries like media and professional services, which have high retention rates of around 84%, demonstrate the strong rewards of prioritizing customer loyalty. On the flip side, sectors like fintech and edtech struggle with much lower retention rates.
