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The 2016
Customer
Loyalty
Benchmarks
The six most critical stats and insights
for restaurants and retailers looking to
understand customer behavior and
improve marketing ROI.
2
S U M M A RY
Customers — first-timers and regulars
alike — walk in and out of restaurants
and retailers every day.
But do they come back?
It is the single most important question affecting brick-and-mortar success.
Earning a repeat customer visit is the best way to increase same-store sales and
maximize profit.
However, most brick-and-mortar merchants have no idea whether or how often
customers come back. “Customer blindness” makes answering basic — and vital
— questions impossible:
• Who are my most valuable customers?
• How many of today’s customers will actually come back?
• Are my previously loyal customers still loyal?
• Most Important — What can I do to take action and increase sales?
And that’s why you’re reading this eBook — to answer these critical questions so
you can understand how to focus your marketing efforts — whether restaurant,
retailer, or otherwise.
3
D ATA S E T A N A LY Z E D
12.8 million
Customers
20.1 million
Transactions
59
Businesses
16
Industries
6 month
Timeframe
The 2016 edition of Customer Loyalty
Benchmarks analyzes a random sample of
aggregated and anonymized data from
merchants with whom Thanx has delivered
loyalty insights. The dataset spans more
than 12M customers and 20M transactions
across 16 industries, including:
Restaurants
Retail
Fine Dining
Apparel
Casual
Furniture
Fast Casual
Parking
QSR
Hardware
Coffee / Snack
Pets
Entertainment
Spa/Salon
961
Locations
4
C R I T I C A L S TAT # 1
T H E D ATA S H O W
TOP CUSTOM ERS
RE VENUE CONTRIBUTION BY QUARTILE
21%
The 80/20 Rule lives
Sure, maybe not exactly 80/20, but certainly an overwhelming majority of sales
comes from just a small percent of customers. Identifying the most valuable
customers and marketing to them personally is crucial for sustaining long-term
brick-and-mortar success.
I N D U S TRY I N S I D E R
2ND
80% of sales comes from just 50% of
customers — no matter what
9%
66%
3RD
TOP
4%
Restaurants and retailers could lose half of their customers and barely see a dip
in sales. But it has to be the bottom 50%. This holds true for every business.
R ESTAUR A N TS
BOTTOM
RETAIL
TOP
62%
TOP
74%
2 ND
19%
2 ND
17%
3 RD
14%
3 RD
6%
BTM
5%
BTM
3%
TA K E A C T I O N
66%
of sales come from the
top 1/4 of customers
Proactively identify VIPs and
personalize their experience
With 66% of sales coming from just 25% of customers, blanket and impersonal
marketing is way too risky. Take action by identifying and segmenting out VIPs — the top 10-25% — and then develop targeted VIP marketing that ensures these
loyalists never churn out of your business.
LEA R N H O W TO LAUNC H PERS ONALIZED VIP EXPERIENCES
→ thanx.com/vip
5
C R I T I C A L S TAT # 2
AT- RIS K CUSTOMERS
S UP E R LOYA L
RE GU LARS
T H E D ATA S H O W
Customers are “cheating” on you
Less than 1 in 20 customers are truly SUPER LOYAL , meaning they visit monthly.
Much more worrisome, 69% of customers are AT-RISK , meaning they were once
loyal, but haven’t returned in the last four months. They’re still eating and
shopping of course — they’re just going somewhere else.
I N D U S TRY I N S I D E R
At-risk customers represent a huge
revenue opportunity
Both restaurants and retailers have more than 69% of revenue tied up in
AT-RISK customers. Driving these previously loyal customers back in store
represents the perfect opportunity to increase profit and same-store sales.
Marketing to existing customers is 8x more cost effective, and more likely to
produce large returns.
R ESTAUR A N TS
RETAIL
3%
5%
28%
25%
69%
70%
AT RISK
TA K E A C T I O N
69%
of customers have not
returned in the last 4 months
Launch customer “winback” to convert
at-risk customers into regulars
Communicating with customers who were once loyal is much cheaper than
acquiring brand new business. Target AT-RISK customers with content according
to what made them loyal in the first place. By converting just 5% of AT-RISK
customers to regulars, merchants can increase profit by as much as 100%.
LEA R N H O W TO LAUNC H CUS TOMER WINBACK NOW
→ thanx.com/winback
6
C R I T I C A L S TAT # 3
T H E D ATA S H O W
CUSTOM ER
FREQU EN CY
RETURN VISITS
2x
3x
4x
5x
71% of customers only make one visit over a 6-month timeframe. That stat should
scream out “REVENUE OPPORTUNITY” to every brick-and-mortar business. Put
it this way: if a 10 location / $20 average check business converts a single one-time
customer into a monthly customer every day of the year, that’s immediately
$770,000 in new annual revenue.
I N D U S TRY I N S I D E R
6 Months
1x
Revenue walks out the door every day
Improving visit frequency is a gold mine
6+
Restaurants and retailers both face the same reality — more than 70% of
customers visit only once over the course of 6 months. Investing in frequency
represents the low-hanging fruit that will generate meaningful results.
R ESTAUR A N TS
OPPORTUNITY
RETAIL
70%
73%
12%
19%
11%
7%
7%
2%
TA K E A C T I O N
71%
of customers visited only once
in the past 6 months
Use incentives to drive
more frequent visits
Customer rewards and incentives are the single best way to motivate more
frequent visits. After all, humans are animals at their core. To ensure that
rewards and incentives actually increase frequency, make sure you align the
incentives offered with your overall brand. For example, don’t give discounts if
your brand is high end. Deliver unique experiences or personalized items instead.
LEA R N H O W TO LAUNC H REWARD S THAT AC TUALLY WORK
→ thanx.com/rewards
7
C R I T I C A L S TAT # 4
AVER AG E CHECK
BY LO CATION
+168%
T H E D ATA S H O W
Location, location, location!
All locations are not made equal. Considering the average check of a
top-performing location is often 2.7x higher than the lowest-performing,
management should be doing everything possible to figure out how to share best
practices and ideas across the whole organization.
I N D U S TRY I N S I D E R
Can all locations be made equal?
Restaurants and retailers both leave a ton of money on the table when it comes to
achieving parity across their various locations. By figuring out how to replicate the
success achieved at top-performing locations across all others, brands can generate
immediate incremental sales.
AVERAGE CHECK SIZE INCREASE
+254%
+98%
RESTAURANTS
RETAIL
21
17
27
AVERAGE NUMBER OF
LOCATIONS ACROSS
BUSINESSES ANALYZED
RESTAURANTS
RETAIL
TA K E A C T I O N
+168%
difference between average
spend at a merchant’s best
location vs. the worst
Use feedback to track customer
satisfaction and Net Promoter Score as a
key metric to hold locations accountable
All multi-location businesses should graph the performance of their locations
according to a responsive customer feedback program. Understanding the
feedback and overall satisfaction at high-performing locations introduces
immediate ideas about how to replicate this success in other, under-performing
locations.
LEA R N H O W TO CREATE RES PONS IVE CUS TOMER FEED BACK
→ thanx.com/feedback
8
C R I T I C A L S TAT # 5
T H E D ATA S H O W
REPE AT CUSTOMERS
BY DAY
Customers are creatures of habit
52% of repeat customers only make purchases on the weekend and 16% of
repeat customers only make purchases during the week. That means that 68% of
repeat customers only visit during certain days of the week.
I N D U S TRY I N S I D E R
Don’t leave incremental sales on the table
People eat every day of the week. They shop every day of the week. If repeat
customers are only coming in to your store during certain days, that means
they’re going somewhere else on those other days. To prevent competitors from
getting their hooks in, restaurants and retailers have to find ways make sure
customers visit out of loyalty, and not out of habit.
R ESTAUR A N TS
16%
32%
52%
MON–FRI
BOTH
WEEKEND
68%
of repeat customer visits occur only
during certain days of the week
RETAIL
15%
12%
37%
30%
48%
58%
TA K E A C T I O N
Target loyal customers with
“timeshift” marketing to change
overall behavior
Changing overall customer behavior starts with your most loyal customers.
Target those who only come in on weekends with a weekday incentive to stop in
for a visit (and vice versa). Time-shifting will draw more business during slow
days and increase overall top-of-mind awareness.
LEA R N H O W TO LAUNC H TIMES HIFT NOW
→ thanx.com/timeshift
9
C R I T I C A L S TAT # 6
REPE AT CUSTOMERS
BY LO CATION
T H E D ATA S H O W
Even loyal customers aren’t
necessarily loyal
Even if someone visits a business every day, they may be doing so out of
convenience. What happens when they change jobs or move houses? Will a
merchant still be top of mind? Customers who visit multiple locations aren’t just
looking for a place to shop, they’re looking for your business.
I N D U S TRY I N S I D E R
Don’t rely on convenience as a
long-term strategy
Restaurants and retailers both have a large majority of revenue tied to customers at a
single location. There’s no way to know for sure that these customers are actually
brand loyal. Only those who eat or shop at multiple locations are definitively taking
initiative to seek out your brand.
22%
MULTIPLE LOCATIONS
78%
R ESTAUR A N TS
SINGLE
78%
of customers only make purchases
at one brand location
RETAIL
18%
27%
82%
73%
TA K E A C T I O N
Drive traffic to more locations
Segment customers who visit only one location and send them a promotion to
stop in at a new, less-trafficked, or other convenient location. Once they start
visiting at two or more locations, you know they are truly brand loyal.
LEA R N W H Y C US TOMER RETENTION MATTERS
→ thanx.com/retention
10
B O N U S C R I T I C A L S TAT
THE POWER OF
1-TO -1 CUSTOMER
EN GAG EMENT
LIKELIHOOD TO RE TURN IN 2 MONTHS
T H E D ATA S H O W
Customers love feeling valued
The simple act of asking for feedback — 100% free by the way — has a pronounced
effect on customer frequency. Across 100’s of thousands of feedback responses,
customers who completed a non-intrusive mobile survey returned 7% faster than
those who didn’t. The reason, of course, is that customers love to feel heard. So,
ask them! That’s how to build deeper relationships.
I N D U S TRY I N S I D E R
Restaurants and retailers see
the same effect
Across all the data surveyed, restaurants and retailers demonstrated the
feedback effect to the same degree. Industry had an immaterial effect on how
customers reacted to having their opinions heard. Lesson learned — engage
customers directly!
R ESTAUR A N TS
+7%
+14%
+22%
Customer
Completes Survey
Customer Receives
Merchant Response
Customer Receives
Merchant Response
+Reward
7–22%
increase in frequency, just from
1-to-1 customer engagement
RETAIL
7.8%
7.1%
14.2%
14.1%
22.4%
22.2%
TA K E A C T I O N
Ask customers for feedback —
and make it effortless
Because customers have their mobile phones with them 24x7, mobile serves as
the perfect channel to solicit customer feedback. But don’t stop there. Only send
feedback requests to customers right after they have made a purchase. That way
feedback arrives in their existing shopping flow, which catapults response rates.
LEA R N H O W TO LAUNC H MOBILE CUS TOMER FEED BAC K IN
TH E EX ISTIN G SHOPPING FLOW
→ thanx.com/feedback
11
Thanx works with 100’s of merchants
METHODOLOGY
across the U.S. To name a few:
CRITICA L S TAT #1 — TOP CUSTOMERS
This pie chart segments customers into quartiles based on revenue contribution to
demonstrate how much more valuable top customers are to a business. Each segment of the
chart has the same number of unique customers in it.
CRITICA L S TAT #2 — AT-RISK CUSTOMERS
This visualization represents an estimate for “at-risk” customers who may have churned out
of the business (or will soon) and consistently loyal customers who return every month.
“At-risk” customers represents the percentage of customers who shopped in the first two
months of our data set but did not make a purchase in the subsequent four months.
“Consistently loyal” customers represents the percentage of customers who shopped at
least once in each month of data.
CRITICA L S TAT #3 — CUSTOMER FREQUENCY
This visualization represents the distribution of all customers based on repeat visit
frequency over six months of data.
CRITICA L S TAT #4 — AVERAGE CHECK BY LOCAT ION
This visualization illustrates the variance in average check across all locations.
CRITICAL STATS 5&6 — REPEAT CUSTOMERS BY DAY & LOCATION
This focuses exclusively on customers who have made more than one purchase in the last 6
months. The first breaks down week vs. weekend shoppers while the second illustrates
multi-location customers.
BO N US CRITICAL STAT — T HE P OWER OF 1-TO-1 CUSTOMER
E N GAGE ME N T
This visualization unpacks the effect of sending a mobile net promoter score survey to
customers right after they’ve completed a transaction. Data comes from feedback prompts
sent to hundreds of thousands of customers in 2015.
DATA A N A LYS IS
Data analyzed is only viewed by Thanx, Inc. and the authorized representatives of the
merchants. Thanx only receives anonymized consumer transaction data, and all Thanx
Reports present such anonymized data.
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Thanx for reading.
To learn more about how to increase
sales by influencing customer behavior,
as well as tactics for addressing the six
critical stats, please visit thanx.com or
email [email protected].
Thanx, Inc.
The 2016 Customer Loyalty Benchmarks
180 Redwood Street, Suite 200
Version 2.0 – February 2016
San Francisco CA 94102
888-233-1939
[email protected]
© Thanx, Inc. All rights reserved.