What Is Customer Stickiness and How Can It Benefit Your Business?

Every business owner wants to ensure customers return to their store or website to retain loyal buyers and increase sales. One way to determine what might make a customer or client return to your business is to explore your “customer stickiness”—or the likelihood that a customer will “stick” to your brand by making a repeat purchase.

Several factors contribute to your brand’s stickiness, including product quality, pricing, convenience, and customer experience. Understanding how sticky your business is provides insight into why a customer is repurchasing your products or continuing to use your services.

The difference between customer stickiness and customer retention

Marketers often use the terms "customer stickiness" and "customer retention" interchangeably, when there are several key differences between them.

“Customer stickiness is about how integrated your business becomes in the day-to-day lives of your customers,” said Benjamin Kats, CEO and Founder of Dispatch Dudes. “It’s not just about whether they come back; it’s about whether they want to come back, or better yet, whether they’d have a hard time imagining doing business without you."

Measuring customer stickiness involves understanding why people choose to purchase and repurchase your products—be it convenience, pricing, product quality, or customer experience. Once you know the inherent value of your products and services, you increase the lifetime value of your business.

Customer retention, on the other hand, speaks to the long-term, trusting relationship you’ve developed with consumers over time. Though retention and loyalty are also important, they’re also more passive measures than stickiness, Kats explained.

“Stickiness is proactive. It’s built by delivering consistent value, removing friction, and finding little ways to surprise and delight,” he added. “It’s the difference between a customer who returns because of habit and one who returns because your product or service just makes their life easier.”

Why should you focus on customer stickiness?

Here are some key benefits of prioritizing your brand’s customer stickiness factor:

Increase the lifetime value of your customers

As you improve parts of your brand to encourage customer stickiness, you cultivate stronger and longer-lasting relationships with valued customers, as they’ll feel they can trust your brand as a go-to for specific products and/or services.

Improve customer loyalty

Increased stickiness among your customers means they will continue to purchase your products and support your brand, leading to more beneficial customer relationships and loyalty.

Provide customers with more value

When you seek to increase customer stickiness, you typically find ways to develop new products or improve existing services. This, in turn, helps provide more value to your customers, encouraging them to continue doing business with you.

Increase customer referrals

Sticky customers who trust your products and services are more likely to refer your business to other people.

Improve your ratings and reviews

If customers are satisfied with your business and choose to continue doing business with you, they are more likely to leave positive reviews and ratings.

Generate more sales and increase revenue margins

Increased customer stickiness directly correlates with higher sales and revenue margins. Customers tend to feel more satisfied with their purchases and are more willing to return for repeat purchases.

Gain a higher return on investment from marketing campaigns

The more loyal and satisfied your customers are, the more effective your marketing efforts will be and the better they will drive real results.

Key metrics to measure customer stickiness

To increase customer stickiness, your company will need to track specific metrics to understand your customers’ shopping behaviors, including:

• Net promoter score (NPS): A 10-point scale to assess customer loyalty by asking, “How likely are you to recommend the product/company to friends or family?” Responses are categorized into three groups: Detractors (0-6), Passives (7-8), and Promoters (9-10).
  • NPS = (Total Promoters / Total Respondents x 100) - (Total Detractors / Total Respondents x 100)
• Repeat purchase rate: The percentage of customers who purchase from your brand more than once. “If a customer uses us once, that’s great. If they use us five times in a month without a promo pushing them, that’s sticky,” Kats said.
  • Repeat purchase rate = (Number of Repeat Customers During a Period / Total Number of Customers for that Period) x 100
• Existing customer revenue growth rate: Also known as revenue growth rate, this metric provides the revenue your company generated from previous customers. Marketers recommend performing this calculation monthly to gain a clear picture of your company’s revenue over time.
  • Revenue growth rate = [(Current Period Revenue - Previous Period Revenue) / Previous Period Revenue] x 100
• Customer retention rate: This is the most straightforward indicator of customer stickiness.
  • Customer retention rate = [(Number of Customers at End of a Period - Number of New Customers for that Period) / Number of Customers at Start of a Period] x 100

Kats emphasized that customer stickiness is less about a single metric and more about the full story.

“If people reorder without hesitation, refer friends, and talk about your brand like it’s a no-brainer, that’s a win,” he said.

How to increase customer stickiness

Here are some basic strategies you can implement in your business to help build customer stickiness from the very first interaction:

• Develop a unique value proposition (UVP) for your company. Your UVP serves as the foundation for all sales and marketing efforts. It’s why customers should choose your brand, products, and services over your competitors. 
• Create personalized experiences with your brand. Customers are loyal to brands that deliver on their UVP by developing customized experiences throughout every touchpoint, such as highlighting their preferred products and offering unique discounts or rewards based on their shopping habits. “Small businesses have an edge here,” noted Kats. “You can personalize the experience and make customers feel like they matter.”
• Launch a customer loyalty rewards program. Whether you offer exclusive discounts or rewards to customers, the right program will keep them engaged and incentivized to make repeat purchases, earning rewards in the process.
• Communicate, communicate, communicate. Kats recommends being clear and proactive in customer communications and quickly addressing any concerns or issues that arise.

Above all else, make sure your brand always delivers top-quality products and services. This strategy speaks to developing lasting brand loyalty as much as it does customer stickiness. By doing this, you give customers a reason to remain loyal to your company over the competition.

Samantha Friedlander contributed to this article.

 

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