What is Customer Loyalty?

Customer loyalty is a feeling of allegiance a consumer has for a business and is usually characterized by a long-term relationship and the customer’s willingness to make ongoing purchases. Customers become loyal when businesses earn their trust, typically by consistently delivering satisfying experiences. It is important to foster customer loyalty because it ultimately has a positive impact on the bottom line. An often-used statistic illustrates one compelling reason to focus on customer loyalty – it costs five times more to acquire a new customer than keep an existing one. But the economic benefits don’t stop there. Loyal customers make repeat purchases, often spend more than new customers, and can become brand promoters by writing good reviews, posting positive comments on social media, and recommending the business to friends and family. That last characteristic – brand promotion – is a particularly important aspect of customer loyalty because a recommendation from a trusted source is one the most effective “marketing” techniques.

Customers’ willingness to recommend a brand is measured by their Net Promoter Scores® (NPS®). NPS is determined by asking one simple, but powerful, question: “How likely is it that you would recommend [brand] to a friend or colleague?” NPS is a proven measure of customer loyalty and a predictor of business growth. Providing exceptional CX is an effective way to increase customer loyalty, but great CX doesn’t happen by accident. Many businesses have established Voice of the Customer (VOC) programs as a way to design and deliver satisfying customer experiences that enhance the customer journey and create more lifelong customers. Customer Feedback software can help CX teams keep tabs on Net Promoter Scores and other indicators of customer loyalty.