Looking Back on 2018: What Have We Learned About Customer Retention?

Be authentic, transparent, maintain loyalty, and work constantly to forge an emotional connection. Oh, and invest in your product. Lessons from 2018

Matt Duczeminski
December 05 2018

It feels like just yesterday we were starting our articles with phrases like “Well, it’s a brand new year,” and “Wow, 2017 flew by, didn’t it?”

While there are still a few months left of 2018, we all know how quickly these last few months tend to pass us by – so we decided to get a jump on our year in review in the realm of customer retention.

Most – if not all – of the predictions we discussed earlier this year ended up proving to be true, but it’s important that we go a bit deeper and explain why these predictions came true – and the implications these trends have on the future of brand-customer relations.

But before we dive in, let’s take a moment to recognize why fostering customer loyalty is so important in the first place.

Customer Retention and Loyalty: More Than Just Monetary Gains

There’s no denying it:

Your loyal customers are your best customers.According to data collected by Yotpo:

  • 8% of loyal customers are more willing to participate in branded events and engage with branded promotions
  • 60% of loyal customers refer their favorite brands to others in their network
  • 37% of loyal customers are willing to provide feedback to the company

A brand’s most loyal and engaged customers know much more about the brand than the “average” customer, meaning their feedback is likely to be more accurate and more thorough.

So, it’s not that your most loyal customers provide massive ROI for your company (which they do); they also provide you with major opportunities to widen your reach, expand your marketing horizons, and – most importantly – make the improvements needed to maintain such a loyal following in the first place.

Customer Retention In 2018: What Have We Learned So Far?

Before we get into the more nuanced stats and figures regarding current retention trends, we have some good news to share:

According to Yotpo, 90.2% of consumers consider themselves “equally or more brand loyal” than they were last year. That said, anyone thinking about blowing the loyalty doomsday whistle any time soon should probably hold off.

The above statistic can be a bit misleading, however, if taken the wrong way. In fact, this statistic alone doesn’t really tell us all that much – and actually begs the question:

Is the modern consumer more likely to become loyal, or are top-performing brands currently doing a better job of fostering loyalty among their customers?

From one side of the coin, it’s logical that all consumers, on some level, want to be loyal to the brands they do business with. I mean, no one engages with a brand thinking, “Gee, I hope this company doesn’t give me what I want, so I can start looking elsewhere right away!”

From the other side of the coin, customers don’t just stay loyal simply because they want to.

Knowing this, it seems that the above statistic says more about the successful company’s ability to cater to the modern consumer’s needs than it does about the modern consumer’s propensity to be loyal.

Those who believe the modern consumer isn’t bound to be loyal needs to reframe their understanding of the situation, and ask themselves this:

Am I doing what it takes to make my target customers want to be loyal?

Let’s take a look at all that goes into fostering customer loyalty as we barrel ahead toward 2019.

A Quality Product (or Service) Is Still Number One

The statement “customer experience will soon overtake price and product quality as the key brand differentiator” has been thrown around a lot over the past few years.

Unfortunately, this message has often been misunderstood to mean that the quality of a brand’s main offering isn’t all that important as long as the “experience” is enjoyable in some way or another.

This isn’t true in the slightest.

A brand’s products are by far the main factor in determining whether a customer remains loyal or not.


51% of consumers say that poor product quality is the number one reason they choose not to remain loyal to a certain brand.

The modern consumer expects that your product or service will be top-notch – and won’t accept anything less. It’s for this reason that the customer experience is becoming a key differentiator: because the products offered by various competing brands are all relatively similar in quality, the consumer must look to other aspects of their experience to decide where they’ll place their loyalties.

But they won’t even get a chance to check out these “extras” if the main product you offer isn’t up to their standards.

Authenticity and Transparency as Key Differentiators

We live in a world powered by the creation, transfer, and intake of information. And this has revolutionized the way in which consumers operate.

As eBay’s Director of Global Data Infrastructure, Gayatri Patel explains:

“(Consumers) have the means to explore, research and share every purchase decision. And they can do it in a very quick way.”

The modern consumer is more “in the know” than ever before. This impacts their propensity to do business with – and remain loyal to – certain brands in a couple ways.

For one thing, the modern consumer is typically more socially responsible and ethically-motivated than those of past decades. Case in point, 81% of Millennials expect the brands they patronize to be “good corporate citizens.” Additionally, 66% of consumers are willing to pay more for products and services that come from companies “who are committed to positive social and environmental impact.”

As the modern consumer becomes more and more aware of some of the not-so-great things many larger corporations do in the name of driving profits, they’ve begun demanding that their favorite brands hold themselves to a higher standard in terms of social responsibility. But it’s not enough for a company to simply say it acts in a socially-responsible manner; it has to prove itself if it wants to maintain loyalty from its customer base.

The modern consumer has also become increasingly aware of the modern brand’s modus operandi and can easily spot when a company is authentic in its promise to provide value – and when a company is just looking to make a quick buck.

According to Yotpo, 64.5% of consumers say “fair pricing” is a key driver of their decision to make repeat purchases. The modern consumer is more than happy to open up their wallets and spend their hard-earned cash – as long as they’re receiving a product or service of equal (or greater) value in return.

(Note: The value of a product or service, as discussed above, is always in the eye of the consumer. “Transparency” does not mean rationalizing the price of a product or service based on what it costs your company to provide it; rather, it’s based on your customer’s perception of the value they’ll receive from using it.)

Your brand needs to be:

  • Authentic in your mission of how you serve both your clientele and the world around you
  • Transparent in allowing “real you” to be easily seen, accessed, and understood by your target audience

Loyalty Isn’t Earned Just Once – It Needs to Be Maintained

Another possible reason behind the misunderstanding that customer loyalty is dying is the fact that customers don’t stay loyal just because they once were.

On the contrary, brands must consistently facilitate, grow, and nurture loyalty within their customers over time in order to keep them onboard and providing high levels of value to the company in question.

We present the following chart from Yotpo, with one minor nitpick regarding the way in which the title is worded:



As it’s worded, this chart may lead to the misconception that those who make more than five purchases from a brand are “automatically” loyal to that brand.

We’d argue that, while these individuals have an affinity for the brand, a more accurate statement would be that those who make five or more purchases are more likely to remain loyal to a given brand over the course of time – as long as the brand continues providing the same (or better) value to them over this span of time.

Unfortunately, while it takes multiple positive experiences to foster loyalty, it may only take a single poor experience to cause a customer to defect to a competitor.


As shown in the graphic above, over 80% of consumers have completely stopped doing business with a company after one bad experience. Without looking our nose down on anyone, those who believe consumer loyalty is dying out are overlooking the fact that these defectors probably had a sub-par experience, causing them to defect to a competitor afterward.

(It is worth noting, however, that 70% of consumers facing a problem will continue doing business with a brand if their issue is resolved during the first go-round.)

The takeaway is that a quality product or service is what gets the modern consumer to the point of considering becoming loyal to a brand – but it’s the company’s ability to consistently and unwaveringly provide value to the customer that will keep them on board.

Where Do We Go From Here?

As 2018 begins to fade into the sunset, there are three main areas we believe brands should be focusing on that will enable them to lean into the aforementioned trends in customer retention.


Remember how we talked about the fact that the value you bring your customers is defined by your customers?

That is why personalization is so important. While you know that a one-size-fits-all approach to marketing and provision of services isn’t going to cut it nowadays, you now need to figure out different ways to cater to each of your individual customers.

Here, Adebisi Adewusi provides three quick tips to help you get started with personalization right away.

Omnipresence and Immediacy

We also discussed the importance of maintaining engagement with your customers as they grow into loyal followers of your brand.

To do this, you need to go beyond multi-channel marketing, opting instead for an omni-channel approach. This will enable your brand to provide value to your customers on every channel and platform they utilize – be it the various social media channels available, chat programs like WhatsApp, or your own website.

Remember, your ability to maintain loyalty among your customer base depends on your ability to quickly satisfy their needs on their terms. Being active where they are is the first step in being able to reach them as quickly as humanly (or, in some cases, robotically) as possible.

Forging an Emotional Connection

Finally, we discussed the fact that, once you’ve met your customers’ baseline needs (by providing high-quality products and services as promised), you’ll want to focus on their more high-level emotional needs.


In accordance with Maslow’s Hierarchy of Needs, this means providing your loyal customers with a sense of belonging and a boost in self-confidence, and even doing your part to help them reach their full potential as a human being.

For more on the importance of forging an emotional bond with your customers – and how to make it happen – check out this post from our own Lauren Dowdle.

Now, we’re handing it over to you:

How do you see your brand fostering and maintaining loyalty among your customers in 2019 and beyond? Do you see any major shifts in the modern consumer’s propensity to stay loyal in the years to come?

Matt Duczeminski

Matt is a professional writer specializing in helping entrepreneurs improve relationships with their customers. He lives in Philadelphia with his wife, Sarah, and he'd probably get a lot more work done if his cat would stop bothering him.

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