6 Critical
Stats for
Customer
Loyalty
Six benchmark stats and insights for
restaurants and retailers looking to
best understand customer behavior
and improve marketing ROI.
2
S U M M A RY
Customers—new and old—walk into
restaurants and retailers every single
day. But do they come back?
It’s the single most important question affecting brick-and-mortar merchants.
Each repeat customer visit represents the most cost-effective way to increase
revenue and improve satisfaction.
However, the majority of businesses have no clue whether customers return or
not. Merchants suffer from customer blindness, unable to answer common
questions such as:
• How many customers who visit my store actually come back?
• Are my previously loyal customers still loyal?
• What percent of my revenue is tied to my top 25% of customers?
• Most Important — What actions should I take in light of this information?
And that’s why you’re reading this eBook—to have answers to these critical
questions so that 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
10.3 million
Customers
18.3 million
Transactions
54
Businesses
16
Industries
6 month
Timeframe
877
Locations
The 2014 edition of 6 Critical Stats for
Customer Loyalty analyzes a random
sampling of 2014 aggregated and
anonymized data from merchants to
whom Thanx has delivered loyalty and
insights. The data spans more than
10.3M customers and 18.3M
transactions locations across 16
industries, including:
Fine Dining
Jewelry
Merchandise
Furniture
Hardware
Parking
Fast Casual
Entertainment
QSR
4
INSIGHT #1
T H E D ATA S H O W
TO P CUSTO M ERS
RE VENUE CONTRIBUTION BY QUARTILE
The 80/20 Rule lives
So, maybe not exactly 80/20, but certainly an enormous percentage of revenue is
tied up in just a small percent of customers. Understanding which customers
contribute what amount of revenue is crucial toward sustaining long-term success.
19%
I N D U S T RY I N S I D E R
2ND
11%
Retailers depend even more
on top customers
64%
3RD
Retailers see this effect to a greater extent than restaurants, with the top 25% of
customers contributing 72% of revenue.
TOP
R ESTAUR A N TS
6%
BOTTOM
RETAIL
TO P
59%
TO P
72%
2 ND
21%
2 ND
16%
3 RD
13%
3 RD
8%
BTM
7%
BTM
4%
TA K E A C T I O N
64%
of revenue is contributed by
the top 25% of customers.
Proactively identify VIPs and create
targeted engagement
80% of a business’s revenue comes from half of its customers. That’s a huge
number. Segment out VIPs and develop targeted programs to make sure these
loyalists never churn out of your business.
DEV ELOP TA RGETED PROG RAMS
http://blog.thanx.com/new-study-restaurant-revenue-down-45-during-holiday-season
5
INSIGHT #2
AT- RISK CUSTOM ERS
T H E D ATA S H O W
Customers are “cheating” on you
Whereas 3% of customers are SUPER LOYAL , meaning that they shop monthly,
70% of customers are AT-RISK , meaning that they were loyal at one time, but
haven’t returned in the last four months. They’re still eating and shopping of
S U P E R LOYAL
RE GUL A RS
course—they’re just going somewhere else.
I N D U S T RY I N S I D E R
Retail percentage fatter at both ends
Compared to restaurants, retailers have a higher percentage of both SUPER
LOYAL and AT-RISK customers. The percentage of AT-RISK customers
represents the overwhelming majority for both types of businesses.
R ESTAUR A N TS
AT R ISK
RETAIL
3%
4%
29%
25%
68%
71%
TA K E A C T I O N
Huge revenue opportunity
70%
of customers have not
returned in the last 4 months.
Communicating with customers who were once loyal is much more cost effective
than acquiring brand new business. Target AT-RISK customers with content
churning out of your business. By converting even just 5% of AT-RISK customers
to REGULARS
PR EV E N T TH EM FROM CHURNING OUT OF YOUR BUSINESS
http://blog.thanx.com/winback-its-whats-for-customer-retention
6
INSIGHT #3
T H E D ATA S H O W
REPE AT CUSTO M ERS
BY DAY
Customers’ wallets love the weekends
No crazy surprise here, but the majority of customers only eat and shop on the
weekend.
I N D U S T RY I N S I D E R
Retail again has its work cut out
Retailers experience the weekend effect to an even larger degree than
restaurants. 54.49% of customers only shop on weekends, vs. 46.19% of
customers who eat only on Saturday and Sunday.
R ESTAUR A N TS
12%
MON–FRI
39%
BOTH
49%
WEEKEND
49%
of customers make purchases
only on weekends.
RETAIL
12%
10%
42%
35%
46%
55%
TA K E A C T I O N
Target weekenders with
weekday incentives
Changing overall customer behavior starts with already loyal customers. Target
those who only come on weekends with a weekday incentive to stop in for a visit.
Time-shifting will draw more business during slow days, and also extend your
brand’s top-of-mind awareness.
TIME-SH IFTIN G
http://blog.thanx.com/proprietary-data-for-brick-and-mortar-businesses
7
INSIGHT #4
REPE AT CUSTO M ERS
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 T RY I N S I D E R
Customers are less willing
to travel for a meal
Restaurants are more affected by the “convenience factor.” As a result, it’s all the
more important to extend customer brand awareness about other business locations.
R ESTAUR A N TS
23%
MULTIPLE LOCATIONS
77%
RETAIL
20%
29%
80%
71%
SINGLE
TA K E A C T I O N
77%
of customers only make purchases
at one brand location.
Drive traffic to under-utilized
locations
Have customers who visit only one location? Send them a promotion to visit a
SEE OV ER A LL P ROFITS IN CREASE
http://blog.thanx.com/why-customer-retention-marketing
8
INSIGHT #5
T H E D ATA S H O W
CUSTO M ER
FREQU EN CY
Revenue walks out the door every day
72% of customers have only visited once in six months. Flipped around, only 13%
of customers have stopped by more than twice. Think of it this way—a 10-location,
$20 average check business that converts a single one-time customer into a
monthly customer every day immediately earns $770K in annual revenue.
I N D U S T RY I N S I D E R
6 Months
Restaurants and retailers in same boat
No real difference between restaurants and retail here. Visit frequency is a huge
1x
2x
3x
4x
5x
6+
opportunity for both.
RETURN VISITS
R ESTAUR A N TS
OPPORTUNITY
RETAIL
72%
72%
15%
14%
6%
5%
3%
3%
1%
1%
3%
5%
TA K E A C T I O N
72%
of customers visited only once
in the past 6 months.
Flip this 1X-6X graph on its side
Treat every customer visit as an opportunity to get that customer to come back
again. Implement a loyalty program. Tweak incentives. Launch bring-a-friend
days. Make sure employees communicate these initiatives to customers. Choose
the tactic that makes the most sense, test, and iterate. A 5% movement from left
to right will have an immediate (and dramatic) positive impact on revenue.
MA K E SUR E E M PLOYEES COMMUNICATE
http://blog.thanx.com/the-must-know-retention-marketing-stats-for-2015
9
INSIGHT #6
AVER AG E CH ECK
BY LO CATION
T H E D ATA S H O W
Location, location, location!
Not all locations are made equal—the variance between a brand’s highest and
lowest performing location is dramatic. The average customer at the best
location spends 156% more than the average customer at the lowest performing
location. Every. Time. They. Visit.
+156%
I N D U S T RY I N S I D E R
Can all retail customers
be created equal?
an average check size variance of +265%, versus +93% for restaurants.
AVERAGE
CHECK SIZE
INCREASE
+265%
AVERAGE NUMBER OF
LOCATIONS ACROSS
BUSINESSES ANALYZED
21
RESTAURANTS
+93%
17
RETAIL
27
RESTAURANTS
+156%
difference between the average
check at the highest performing
location vs. the lowest.
RETAIL
TA K E A C T I O N
Identify, learn, and communicate
All multi-location businesses should graph the performance of their locations and
manage a responsive customer feedback program. Have high performing
locations share best practices with others to increase the amount customers
spend when they come in store—no matter what store that might be.
MA N AGE A R ESPONSIVE CUSTOMER FEEDBACK PROG RAM
http://blog.thanx.com/what-i-learned-from-launching-a-new-customer-retention-program
10
METHODOLOGY
INSIG HT # 1 — TOP CU STO M E RS
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.
Thanx for reading.
INSIGHT # 2 — AT- R I S K CU STO M E RS
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.
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.
INSIG H T S 3 & 4 — R E P E AT C U S TO M E R S B Y DAY & LOCATION
This focuses exclusively on customers who have made more than one purchase in the last 6
multi-location customers.
To learn more about customer
behavior and how to address
these six loyalty stats, please
visit blog.thanx.com or email
[email protected].
INSIG HT # 5 — C U STO M E R F RE Q U E N CY
This visualization represents the distribution of all customers based on repeat visit
frequency over six months of data.
INSIG H T # 6 — AV E R AG E C H E C K B Y LO C AT I ON
This visualization illustrates the variance in average check across all locations.
DATA A N A LY S I S
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.
Thanx, Inc.
180 Redwood Street, Suite 200
San Francisco CA 94102
888-233-1939
[email protected]
6 Critical Stats for Customer Loyalty
Version 1 – January 2015
© Thanx, Inc. All rights reserved.