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Average Customer Retention By Industry (2022)

by Josh Howarth
July 6, 2022

Strong customer retention is vital to success irrespective of industry. Business executives are constantly aiming to improve retention strategies to remain ahead of the curve.

There is plenty of variation between industry customer retention rates. And a high figure in one space can be a concerning figure in another.

We’ll explore the latest customer retention rates across different industries.

Top 5 Customer Retention Stats in 2022

  • Media and professional services have the highest industry retention rates (84%).
  • The hospitality/travel/restaurants industries have a retention rate of just 55%.
  • Financial/credit and cable have the highest churn rates in the US (25%).
  • The top delivery method used for retention is email (89%).
  • 60% of people believe that good customer service is key to customer retention.

Customer Retention by Industry

Breaking down customer retention figures by industry, media and professional services rank joint-top for highest retention with 84%.

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At the other end of the spectrum, the hospitality/travel/restaurants industries have a comparatively low customer retention rate of just 55%.

Here’s the full list of average customer retention rates by industry:

Industry Customer Retention Rate Difference vs Average*
Media 84% ↑ 9%
Professional Services 84% ↑ 9%
Automotive & Transportation 83% ↑ 8%
Insurance 83% ↑ 8%
IT Services 81% ↑ 6%
Construction & Engineering 80% ↑ 5%
Financial Services 78% ↑ 3%
Telecommunications 78% ↑ 3%
Healthcare 77% ↑ 2%
IT & Software 77% ↑ 2%
Average Retention Rate* 75% -
Banking 75% - 0%
Consumer Services 67% ↓ 8%
Manufacturing 67% ↓ 8%
Retail 63% ↓ 12%
Hospitality, Travel, Restaurants 55% ↓ 20%

*Average derived from 15 above industries

Looking specifically at US data, 2020 research shows that the financial/credit sector and cable have the highest churn rates (25%). This was closely followed by general retail with 24% of customers discontinuing their use of a retail service.

Here’s a detailed look at US churn rate by industry:

Industry Churn Rate Difference vs Average*
Financial/Credit 25% ↑ 4%
Cable 25% ↑ 4%
General Retail 24% ↑ 3%
Online Retail 22% ↑ 1%
Telecom/Wireless 21% - 0%
Average Churn Rate 21% -
Travel 18% ↓ 3%
Big Box Electronics 11% ↓ 10%

*Average derived from 7 above industries

Source: Customer Gauge, Aspect

Media and IT Services Customer Retention

At 84% the media industry ranks joint-highest for global customer retention rate. Media companies often have substantial marketing budgets that allow them to target large client bases. This helps maintain a high retention rate despite a lack of personalization.

Meanwhile, IT services have a customer retention of 81%. And the IT & software industry has a comparatively low 77% customer retention. Both sectors have the advantage of being able to deliver fast results. However, unfulfilled expectations can quickly lead to high churn rates and customers jump ship.

One aspect that links both media and IT is apps - specifically social media apps.

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The latest available statistics show that the average social app has a 24-month usage retention rate of 8.7%. Yet, 2015’s figures for the most popular social apps far exceed this average.

Here’s how the biggest social apps compared in terms of mid-term to long-term user retention:

Social App 24-Month Usage Retention Rate Comparison to Average
Facebook 69.6% ↑ 60.9%
VKontakte 52.7% ↑ 44%
Instagram 39.1% ↑ 30.4%
Pinterest 37.5% ↑ 28.8%
Kakaotalk 35.6% ↑ 26.9%
Snapchat 30.2% ↑ 21.5%
Twitter 22.9% ↑ 14.2%
Average Social App 8.7% -

These figures compare favourably to the average short-term retention for mobile apps:

Month Average User Retention
1 43%
2 33%
3 29%

Evidently, the type of app has a sizable influence on user retention rates.

In fact, 2020 data shows that the top app type by retention rate over 30 days (comics - 33.8%) has more than double the retention of the bottom of app type (food & drink - 16.5%).

Below are a selection of mobile app retention statistics by app type:

App Type Day 1 Retention Day 7 Retention Day 30 Retention Day 1 to Day 30 Drop-Off
Comics 33.8% 16.4% 9.3% ↓ 24.5%
News 33.1% 19.8% 13.3% ↓ 19.8%
Gaming - Hyper Casual 32.3% 8.3% 2.6% ↓ 29.7%
Gaming - Casual 32.3% 11.1% 4.5% ↓ 27.8%
Gaming - Social Casino 32.1% 12.6% 5.4% ↓ 26.7%
Gaming - Midcore 31% 7.9% 2.3% ↓ 28.7%
Gaming - Hardcore 28.7% 8.7% 3.1% ↓ 25.6%
Social 26.3% 9.3% 3.9% ↓ 22.4%
Books 25.1% 11.1% 6% ↓ 19.1%
Shopping - e-Commerce 24.5% 10.7% 5.6% ↓ 18.9%
Entertainment - Streaming 24.4% 9.9% 4.7% ↓ 19.7%
Entertainment - All 22% 8.2% 3.8% ↓ 18.2%
Music 20.4% 8.1% 4.2% ↓ 16.2%
Medical 20% 7% 3.5% ↓ 16.5%
Education 18.8% 6.3% 2.5% ↓ 16.3%

Source: Business Wire, SimilarWeb, Localytics, Liftoff

Automotive & Transportation Customer Retention

According to 2018 data, the automotive and transportation industries have an average customer retention of 83% - among the highest recorded industry retention rates.

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In the short-term, travel apps have a lower-than-average 1-day retention rate. On average, just 1 in 5 people will continue to use a travel app after the first day.

However, the drop-off over the course of a month isn’t as severe as some other app categories. From the remaining 20%, almost 1 in 5 continue to use travel apps up to the 30-day mark.

App Type Day 1 Retention Day 7 Retention Day 30 Retention Day 1 to Day 30 Drop-Off
Travel 20% 7.6% 3.6% ↓ 16.4%

Looking at 2021 data, transportation apps fare rather well in terms of long-term retention. Especially when compared to automotive apps.

App Type 30-Day Retention 90-Day Retention 1-Year Retention Day 30 to 1 Year Drop-Off
Transportation 50% 45% 33% ↓ 17%
Automotive 67% 57% 32% ↓ 35%

Automotive apps have a notably higher (17%) 30-day retention than transportation apps.

Yet, transportation apps edge (1%) automotive apps in terms of retention after a year.

The drop-off between the 30-day mark and 1-year mark for automotive apps is over double the drop-off for transportation apps.

Source: Business Wire, Liftoff, Apptentive

Financial Services and Banking Customer Retention

The average customer retention rate for financial services is 78%. While the retention rate for the banking industry is a fraction lower at 75%.

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These high customer retention rates are reinforced by the fact that the average American uses their primary bank account for 16 years. In fact, just 4% of consumers switched banks in 2018.

A strong brand is thought to be the most important driver in banking industry customer retention.

Here’s are the top drivers for customer retention according to retail bank CEOs in 2010:

Requirement Percentage of CEOs Who Consider Requirement Very Important
Strong Brands 90%
High quality data and data analysis 82%
Integrated multichannel sales 79%
Transparent products 78%
Segmented offerings based on the consumer’s needs 68%
Competitive prices 60%
Strong branch presence 59%
Use of innovative technologies 53%
Bonuses for loyal customers 37%
Product bundles 31%

And here’s how various financial and banking apps compare in terms of short-term customer retention:

App Type Day 1 Retention Day 7 Retention Day 30 Retention Day 1 to Day 30 Drop-Off
Finance - Traditional Banking 30.6% 18.6% 13.4% ↓ 16.2%
Finance - Digital Banking 30% 15.6% 10.2% ↓ 19.8%
Finance - Investments 25.6% 12.5% 7.1% ↓ 18.5%
Finance - All 22.7% 9.7% 5.8% ↓ 16.9%
Business 22.4% 10.1% 5% ↓ 17.4%
Finance - Financial Services 21.8% 9.7% 6.1% ↓ 15.7%
Utilities 18.3% 6.8% 3.4% ↓ 14.9%

On average, organic payment apps achieve higher retention rates than paid install payment apps. This is true across all five measured intervals between 1 day and 30 days.

Here is a detailed look at H1 2019 data for global payment app customer retention:

Payment App Day 1 Day 7 Day 14 Day 21 Day 30
Organic 16% 10% 8% 7% 6%
Paid 14% 7% 5% 4% 3%

Paid install payment apps also see a slightly higher 30-day drop-off (11%) compared to organic payment apps (10%).

Source: Business Wire, Bankmagazin, Liftoff, adjust

Telecommunications Customer Retention

The customer retention rate for telecommunications companies averages out at 78%.

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The relatively high customer retention rate is perhaps linked to long-term contracts and customer loyalty incentives which makes switching more difficult.

Meanwhile, mobile apps are a big part of modern telecommunication. However, the ease of installing and uninstalling apps means that their retention rates are considerably lower than more fixed subscription models.

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Nonetheless, here is a look at global mobile app user retention rates over time from 2012 to 2019:

Year App Retention Rate Change of Previous Year
2012 31% -
2013 34% ↑ 3%
2014 39% ↑ 5%
2015 34% ↓ 5%
2016 38% ↑ 4%
2017 37% ↓ 1%
2018 38% ↑ 1%
2019 32% ↓ 6%

Over this period, the average retention rate for app users sat at just over 35%.

Of course, retention rates vary across nations. Analysis from Q3 2020 highlights the discrepancies between countries’ post-install app retention over a 30-day period:

Country Region 30-Day Retention Rate
Finland Europe 6.01%
Japan Asia 5.89%
Ireland Europe 5.78%
Denmark Europe 5.17%
Sweden Europe 4.48%
Netherlands Europe 4.36%
Canada North America 4.31%
Australia Oceania 4.11%
South Korea Asia 4.06%
Germany Europe 3.86%
United Kingdom Europe 3.82%
Belarus Europe 3.65%
France Europe 3.56%
United States North America 3.49%
Spain Europe 3.46%
Belgium Europe 3.42%
South Africa Africa 3.41%
Poland Europe 3.38%
Italy Europe 3.3%
Malaysia Asia 3.07%
Romania Europe 2.78%
Russia Europe/Asia 2.73%
Thailand Asia 2.36%
Colombia South America 2.35%
Indonesia Asia 2.3%
Ukraine Europe 2.27%
Saudi Arabia Asia 2.26%
Mexico North America 2.2%
Argentina South America 2.17%
Philippines Asia 2.08%
Brazil South America 2.04%
Vietnam Asia 1.97%
Egypt Africa 1.96%
Turkey Europe/Asia 1.94%
India Asia 1.92%

And here are three select types app and their short-term retention statistics as of 2020:

App Type Day 1 Retention Day 7 Retention Day 30 Retention Day 1 to Day 30 Drop-Off
News 33.1% 19.8% 13.3% ↓ 19.8%
Social 26.3% 9.3% 3.9% ↓ 22.4%
Communication 22.4% 10.1% 5% ↓ 17.4%

Source: Business Wire, Localytics, AppsFlyer, Liftoff

Consumer Services, Hospitality, and Travel Customer Retention

Among the lowest industry averages for customer retention are consumer services (67%) and hospitality, travel, and restaurants (55%).

Hospitality/tourism apps have near-identical retention rates to transportation apps:

App Type 30-Day Retention 90-Day Retention 1-Year Retention Day 30 to 1 Year Drop-Off
Hospitality/Tourism 50% 44% 31% ↓ 19%
Transportation 50% 45% 33% ↓ 17%

But there’s a considerable disparity between different types of consumer and hospitality apps:

App Type Day 1 Retention Day 7 Retention Day 30 Retention Day 1 to Day 30 Drop-Off
Gaming - Social Casino 32.1% 12.6% 5.4% ↓ 26.7%
Dating 29.6% 11.4% 5.1% ↓ 24.5%
Sports 27.6% 15.3% 9.9% ↓ 17.7%
Social 26.3% 9.3% 3.9% ↓ 22.4%
Lifestyle 20.9% 8.7% 4.5% ↓ 16.4%
Music 20.4% 8.1% 4.2% ↓ 16.2%
Health & Fitness 20.2% 8.5% 4% ↓ 16.2%
Travel 20% 7.6% 3.6% ↓ 16.4%
Productivity 17.2% 7.2% 4.1% ↓ 13.1%
Food & Drink 16.5% 7.2% 3.9% ↓ 12.6

Food & drink apps have the lowest retention after 1 day (16.5%) and 7 days (7.2%). While Travel has the lowest 30-day retention at 3.6%.

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Source: Business Wire, Apptentive, Liftoff

Retail Customer Retention

On average, retail has one of the lowest customer retention rates at around 63%.

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Retailers are increasingly reliant on social media to boost sales and customer retention. One of the most popular tools used to engage with customers today are temporary photo/video reels known as ‘stories’.

Instagram stories are an effective way to communicate with customers. Brands who share one story per day have a viewing retention rate of 100%. However, this figure drops by over 40% when brands share 15 stories per day.

Here’s a full breakdown of retention rate for Instagram brand stories between April 2019 and September 2020:

Number of Instagram Stories Retention Rate Difference Between One Less Story
1 per day 100% -
2 per day 85.21% ↓ 14.79%
3 per day 79.04% ↓ 6.15%
4 per day 75.71% ↓ 3.35%
5 per day 71.79% ↓ 3.92%
6 per day 69.03% ↓ 2.76%
7 per day 67.51% ↓ 1.52%
8 per day 66.18% ↓ 1.33%
9 per day 64.6% ↓ 1.58%
10 per day 63.2% ↓ 1.4%
11 per day 62.17% ↓ 1.03%
12 per day 60.11% ↓ 2.06%
13 per day 59.28% ↓ 0.96%
14 per day 60.92% ↑ 1.64%
15 per day 59.4% ↓ 1.52%

In the digital age, mobile apps are an imperative retail tool.

Here’s how select types of mobile app compare in terms of short-term retention:

App Type Day 1 Retention Day 7 Retention Day 30 Retention Day 1 to Day 30 Drop-Off
Shopping - Marketplace 33.7% 16.1% 8.7% ↓ 25%
Shopping - e-Commerce 24.5% 10.7% 5.6% ↓ 18.9%
Food & Drink 16.5% 7.2% 3.9% ↓ 12.6%

Source: Business Wire, Liftoff, Socialinsider

Customer Retention Drivers

A recent report revealed that business spending on loyalty management reached approximately $75 billion worldwide in 2019.

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The methods employed by companies to boost customer retention can vary greatly.

A 2015 US survey found that email is the number one delivery method used for retention (89%).

Social media engagement (63%) and direct mail (55%) complete the top three.

Television as an institution is said to be on the decline, and that is backed up by the retention data. TV adverts (non-infomercial) and direct response TV ranked bottom of the list with just 7% and 3% of marketers using the method respectively.

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This is the full list of delivery methods used by marketers in the US as of 2015:

Rank Delivery Method Used for Retention Percentage of Marketers Using Method
1 Email 89%
2 Social media engagement 63%
3 Direct mail 55%
4 Online advertising* 49%
5 Search engine optimization (SEO) 42%
6 Social media advertising 41%
7 Mobile marketing 33%
8 Webcasts 31%
9 Search engine marketing 29%
10 Affiliate marketing 26%
11 Telemarketing (outbound) 21%
12 Insert media 17%
13 Direct response space 16%
14 Direct response radio 8%
15 TV ads (non-infomercial) 7%
16 Direct response TV 3%

*Excluding social media and paid search

Customer service satisfaction plays a large part in customer retention, although the latest data suggests it may be on the decline somewhat.

In 2017, good customer service in the US led to 68% of customers doing more business with that company.

This figure dipped slightly to 66% in 2018. And dropped further to 60% in 2020.

However, the fact that over half of respondents still view customer satisfaction as a key driver to conducting further business is worth noting. Slightly more than 7 in 10 people agree that “ease of resolution” is in the top three most important customer experience service factors.

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Here’s the full list of factors impacting customer satisfaction:

Rank Factor Impacting Customer Service Satisfaction Percentage of Respondents Ranking Factor in Top Three Most Important
1 Ease of resolution (customer effort) 70.7%
2 Agent knowledge 52.5%
3 Ease of contact (choice/accessibility) 42.8%
4 Time taken to resolve queries 40.5%
5 Organizational policies 23.9%
6 Seem issues recur repeatedly/feedback goes unanswered 22%
7 Digital channel/function doesn’t work 16.2%
8 Preferred channel not available 10.8%
9 Can’t trust services will be delivered 9.2%
10 Other 5.9%
11 Difficult to speak with a human 3.6%

Another important driver of customer retention: loyalty programs.

According to business executives in 2019, these are the most important features of a successful loyalty program:

Loyalty Program Feature Importance* Importance in 5 Years* Difference
Exceptional Customer Service 51% 50% ↓ 1%
Digital and omnichannel access 48% 53% ↑ 5%
Ease of use 45% 39% ↓ 6%
Personalized offers 42% 45% ↑ 3%
Economic rewards** 42% 26% ↓ 16%
Social media engagement 38% 27% ↓ 11%
Experiences and emotional brand connection 33% 35% ↑ 2%
Social impact/sustainability 24% 32% ↑ 8%
Building a community among consumers 20% 26% ↑ 6%
Perks and services*** 19% 14% ↓ 5%
Forging cross-industry partnerships 13% 18% ↑ 5%
Access to expert advice/assistance from humans 12% 16% ↑ 4%
Gamification 10% 10% - 0%

*Percentage of respondents who believe the feature is one of the most important
**Points, miles, cashback, etc
***Concierge service, early access to new products, airline lounge access

Business executives are investing in technology to improve customer loyalty strategies.

Mobile capabilities is the primary area of investment according to a May 2019 survey.

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Here’s a rundown of the technology investments being made by business executives in order to improve customer retention:

Rank Technology Investment Business Executives Making Investment
1 Mobile capabilities (eg. digital wallet) 52%
2 Customer service chat bots 38%
3 APIs 27%
=4 Artificial intelligence/machine learning 25%
=4 Geolocation/proximity-based services 25%
6 Cloud computing 22%
7 Virtual assistants (eg. Alexa, Siri) 13%
8 Natural language processing 10%
9 Augmented or virtual reality 8%
10 Blockchain 5%

Source: Business Wire, Target Marketing, Aspect, NTT, Harvard Business Review

Conclusion

Customer retention is incredibly industry-specific and time-sensitive.

Yet, many business executives face an increasingly uphill task when it comes to retention as user demands continually shift. And expectations often evolve regardless of industry.