By Thanx.com, Special for USDR
Thanx, Inc., which helps merchants effortlessly identify, engage, and retain their best customers, today published “6 Critical Stats for Customer Loyalty,” a 2014 retail and restaurant study highlighting the major customer retention challenges U.S. businesses face amidst an increasingly indiscriminate population. Analyzing more than 18 million multi-location merchant transactions, Thanx found that revenue was highly-concentrated among a small number of customers, with the top 25% contributing 64% of revenue – “top-heaviness” even more pronounced in retail.
This revenue density aligns with the 80/20 rule and has broader implications for retailers and restaurants. According to Thanx, 70% of previously loyal customers are “at-risk” and unlikely to return. This compares to the 3-4% “super loyal” who return monthly at minimum.
“Modern customers are promiscuous. With countless competing options, they don’t mind spreading the love,” said Zach Goldstein, CEO and founder of Thanx. “Most brands write them off by focusing on customer acquisition, but customer retention is 7X more cost effective – they’re already familiar with you.”
Though insights-focused, the report offers several prescriptions for ailing customer retention. With 49% of consumers making weekend-only purchases – despite stores being open all week – Thanx has seen success delivering mid-week promotions. Similarly, 77% of customers visit only one location; merchants can improve brand loyalty by driving traffic to other stores.
“I started Thanx because sophisticated customer insights and retention tools were only accessible to the country’s largest businesses,” said Goldstein. “We strive to remove the pain associated with customer loyalty and provide publicly-available insights that help mid-size businesses grade themselves without blowing their budgets.”
Thanx, founded in 2011, works with hundreds of U.S. restaurants and retailers. The inputs for “6 Critical Stats for Customer Loyalty”are a random sampling from merchants to whom Thanx has delivered loyalty and insights. The 2014 report spans 10.3M customers, 18.3M transactions, 54 businesses, and 877 locations.
Download “6 Critical Stats for Customer Loyalty” here. For more best practices, Thanx publishes the Customer Retention and Loyalty blog at blog.thanx.com.