Customer Loyalty Matters

With sharply rising inflation and growing pressure on the US consumer, customer brand loyalty is becoming more important than ever. Shopper loyalty and your brand’s ability to retain customers amid rising prices and soaring costs of living may be the difference between success and failure in navigating these volatile times.

But what is a good retention level for a brand, and how do you measure and benchmark yourself against your peers? The M Science team has analyzed hundreds of thousands of transactions for over 40 kitchen-related brands since January 2019, tapping big data to help determine quality customer retention for a brand.

With our data, we aim to answer a series of questions: which brands maintain the best customer loyalty in the kitchen-appliances industry? Does price affect loyalty? Do the brands with the highest rates of customer retention and loyalty enjoy increased market share?

Using Consumer Spending Data from M Science’s Brand Intelligence Dashboard, we calculated the average retention rate for all covered kitchen brands and analyzed those averages over time.

For our first analysis, we looked at the ability of a brand to retain customers over the course of one year. In other words, of the cohort of customers who purchased a Breville product in Q1 2021, what percentage of them bought another Breville product in the following year? We also analyzed other brands through this metric.

Notably, there are some difficulties in making such a comparison. Some brands offer more products than others, so customers have more “opportunity” to make additional purchases, and thus, appear more loyal. Additionally, the kitchen brands supply a variety of supplies. In other words, when comparing a food processor to a cooking pan, you can expect customers to buy one more often than the other. Finally, this analysis does not control for the average price of an item and the total dollar amount spent for each brand. We only looked at the number of customers making a purchase.

Recognizing these factors, to get a rough idea of retention, we visualized the distribution of one-year retention numbers for our brand groups.

Distribution of 1-Year Retention Since Q1 2021

Retention: Percentage of a brand’s customers who bought another product from that brand over the course of a year following the initial purchase (Source: M Science)

The average one-year customer retention rate was 14%. Interestingly, 66% of all brands had between 10% and 15% one-year retention. Anything above 15% is above-average retention and anything over 20% is very successful.

The brands with extremely high retention numbers (+25%) were Room Essentials and Stasher – both offering lower-priced organizational items. These products are expected to have more repeat purchasers.

T-Fal, Whirlpool, and Food Network also showed high customer retention, landing in the top 10 of the highest retention numbers for the brands covered in this analysis.

Interestingly, price did not seem to have a strong relationship to retention. The correlation was -22%, but the very high retention brands all have significantly lower average prices. As you move up in price, the relationship breaks down, indicating that customers are loyal to some brands even if their items are more expensive than the competition’s alternatives.

What influences a brand’s retention, and how do you improve yours? You can use Consumer Spending Data to answer these questions and many others. Find out how.

Ready to talk to our team? Contact us to find out how brands are partnering up with M Science to answer these questions and more.

M Science is a global data-driven research and analytics firm, with nearly 20 years of experience uncovering new insights for some of the world’s largest corporations and financial institutions. We revolutionize research by discovering new datasets and pioneering methodologies to provide actionable intelligence. Learn more at: mscience.com/corporate intelligence. M Science is a portfolio company of Leucadia Investments, a division of Jefferies Financial Group Inc. (NYSE: JEF).

Interested in talking to a member of our sales team for a demo of our solutions? Reach out to our team!

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