What is customer loyalty?

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What is customer loyalty?

  • Customer loyalty reflects a customer’s willingness to interact with an organization or brand again and again.
  • Loyalty is the result of a positive customer experience, customer satisfaction, and the value of the products or services.
  • Loyal customers interact with and spend with brands they like more often, they spend more, and they utilize word of mouth to share their positive experience.
  • Just because a customer continues to buy from you, does not necessarily mean they are loyal. Being truly loyal means standing by a brand even when a problem arises, and they do not seek out competitors.

Did you know it costs a business about 5-25 times more to acquire a new customer than it does to sell to an existing one?

  • Existing customers spend 67% more than new customers.
  • Customer loyalty programs truly pay for themselves, as they keep customers coming back again and again.
  • In the U.S., 40% of online shopping revenue comes from repeat customers.
  • 69% of consumers said their choice of retailer was influenced by the business having a loyalty program

How can you measure customer loyalty?

  • Likelihood to recommend your products and services to others
  • Likelihood to continue purchasing your products and/or services
  • Likelihood of purchasing other products and services you offer
    • 83% of consumers said loyalty programs make them more likely to continue doing business with a particular company
  • Believing your products and services are preferable to others offered within in the marketplace
  • Not actively seeking out competitors to replace you
  • Providing your company with opportunities to correct problems and not using these as a basis for compromising the relationship
  • Did the consumer change their behavior because of a loyalty program?
    • 49% of consumers agreed they spent more at a business after joining their loyalty program

Why do customers join loyalty programs?

How to customer loyalty programs add value?

  • Use a point system
    • Ensure it is easy for the customer to understand the relationship between points and tangible items
  • Surprise gifts
    • 67% of customers surveyed said surprise gifts are a very important part of loyalty programs
  • 76% of consumers believe that loyalty programs are a form of a relationship they have with a brand

Is it time for your business to set up a loyalty program? Without a program in place, your organization could be missing out a large piece in what drives 83% of consumers buying decisions.