40+ Customer Retention Statistics You Need to Know in 2025

What would you call a business with a steady flow of returning customers driving consistent revenue and sustainable growth? Ideal, right? Absolutely! This is the transformative power of a strong customer retention strategy.

While acquiring new customers grabs the spotlight, it’s expensive and time-consuming.

In contrast, retaining existing customers costs less and delivers more value over time. According to the Harvard Business Review, increasing customer retention by just 5% can boost profits by 25% to 95% — a compelling case for why retention deserves your focus.

Customer retention statistics play a pivotal role in this equation. They reveal key patterns in customer behavior, shed light on industry trends and provide actionable insights to help you refine your strategies. Whether it’s identifying loyalty drivers or spotting areas for improvement, these statistics empower you to adapt and stay ahead.

Ready to unlock the numbers? Let’s dive in!

What is customer retention?

Customer retention refers to your ability to keep existing customers over time. It is about building long-term relationships through prompt customer communication and proactive customer service, which fosters trust and increases customer lifetime value. And it pays off — according to Forbes, returning customers spend 67% more than first-time customers.

Customer retention statistics to know

Here is a meticulously compiled collection of key statistics that elucidate the significance of customer retention, its interplay with customer experience (CX), prevailing industry trends and the role of loyalty programs in fostering retention. These insights will help you make informed decisions about where to invest your efforts and resources for maximum impact.

Why customer retention?

· It costs 5 times more to acquire a new customer than to retain old ones.

· Loyalty leaders — companies at the top of their industries in Net Promoter Scores or satisfaction rankings for three or more years — grow 2.5 times faster than their competitors.

· According to Forbes, 50% of existing customers are likelier to try new products and 31% spend more than new customers.

· Loyal customers are 5 times more likely to make repeat purchases, 5 times more likely to overlook mistakes, 4 times more likely to refer your brand to others, and 7 times more likely to try new products or services.

· Loyal customers account for 60% of direct-to-consumer sales.

· Value enhancement is an economically significant opportunity that boosts the probability of customer retention by 82%.

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How does customer experience affect the retention rate?

· 44.5% of organizations worldwide rely primarily on customer experience (CX) as a primary competitive differentiator.

· Customers with favorable past experiences spent 140% more than customers with negative experiences.

· 89% of companies compete primarily based on customer experience in the market.

· 64% of US consumers feel organizations have lost the human touch of customer experience.

· 86% percent of customers say they’re more likely to stay loyal if they feel an emotional connection with a customer service agent.

· Customer experience drives 73% of consumers toward a purchasing decision.

· 77% of customers choose or recommend brands with personalized brand experience.

· 61% of customers are willing to pay at least 5% more if they know they’ll get a good customer experience.

How does customer retention look across industries?

· On the higher end, media and professional services see an average of 84% customer retention.

· The financial services industry — which includes banks, insurance companies, investment firms and credit unions — boasts an impressive average customer retention rate of 78%.

· The travel and hospitality industries have a 55% average customer retention.

· On the lower end, e-commerce has an average retention rate of 38%.

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How are loyalty programs potential boosters for customer retention?

· The global loyalty management stands at $10.67 billion with its market worth.

· About 80% of American consumers are members of at least one loyalty program.

· 75% of consumers will switch to a brand with a better loyalty program.

· 59% of consumers have strong personal connections with the companies they are loyal to.

· According to an April 2022 survey, 79% of Americans agree that a loyalty program affects the likelihood of continuing business with a brand.

· Only 37% of respondents feel that points and rewards can secure brand loyalty.

· 78% of respondents across various countries agreed that consumers can discover aspects that foster brand loyalty after their initial purchase. This insight emphasizes the importance of companies effectively showcasing their loyalty drivers from the first interaction with a consumer, as it can impact long-term brand loyalty.

· 43% of consumers are more likely to make weekly purchases due to loyalty programs.

· 62% of customers are likely to spend more to get better benefits from the loyalty programs.

· A survey from late 2022 revealed that 7 in 10 Americans view loyalty programs as a key factor in staying loyal to their favorite brands.

Why tap social media for customer retention?

· 90% of social media users follow at least one brand through social media platforms.

· As of 2021, 53% of organizations in the United States use social media for customer service.

· 62% of millennial customers become more loyal if the brand interacts with them on social media.

· Customers spend 20-40% more on brands that respond to customer service requests on social media.

What are the customer retention statistics by churn rate?

· In the U.S., 59% of customers will walk away or drop off after several bad customer experiences and 17% after just one bad experience.

· Boomers are the most selective when measuring loyalty across generations — 44% will abandon a brand after just one bad experience, compared to 30% of Millennials and 24% of Gen Z.

· Enhancing customer experience can decrease customer churn by 15%.

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Retain customers with a service-led approach

Customer loyalty and retention are two sides of the same coin. A happy customer is easier to retain and more likely to evolve into a loyal advocate for your brand. In fact, 74% of customers report that their loyalty grows when they feel heard and understood by a brand. This highlights an essential truth — discounts alone won't suffice. True retention thrives on shared experiences and meaningful connections. Embracing this mindset equips you to outpace competitors and build lasting customer relationships.

Prompt communication and proactive customer service are non-negotiable in today's fast-paced market. Even the most innovative products and services can fall flat without timely, personalized support. That's why upgrading your tech stack is essential.

With Sprinklr Service, an all-in-one customer experience solution, you gain the tools to identify at-risk customers, deliver timely assistance and foster enduring connections.Sprinklr's innovative AI seamlessly supports your customer service teams, enabling them to focus less on repetitive tasks and more on creating meaningful customer interactions.

Book an expert-led demo today to discover how Sprinklr empowers some of the world's most customer-centric brands — and how it can empower yours, too.