What Is Customer Loyalty?

Customer loyalty is when someone chooses a company’s services or products consistently over the competitors’. They usually aren’t persuaded by competitor’s prices or availability. Instead, they trust a brand and continue to give their support to that business because they understand the value they add. Plus, they also tend to recommend that products and services to other people they know.

Customer loyalty is important because acquiring new patrons actually costs much more than retaining old ones. When you establish this allegiance to your brand, you’re securing your company’s future. They help your business thrive consistently, so you never have to worry about taking a hit.

By investing your time and energy into your current clientele, you’re not just preventing them from leaving, you’re also creating an opportunity for growth. When you have devoted customers, they become walking advertisements for your brand. It’s likely they will tell everyone they know how much they enjoy your brand and will convince others to give you a try as well.

In the end, loyalty will lead to higher profits for your company. If you want to retain business, conducting a customer loyalty survey is an easy way to pinpoint what exactly makes them happy or sad so that you can strategize how to give them a higher satisfaction.

Wikipedia’s definition of a loyalty program is: ‘Loyalty programs are structured marketing strategies designed by merchants to encourage customers to continue to shop at or use the services of businesses associated with each program.’

If you were a customer about to sign your details up to a program, and read this definition first – would you hand over your details? …… we thought not

In our view, a loyalty program should be described as a structured customer strategy to help build a stronger relationship between the customer and the brand. Providing a value exchange between the brand and customer, beyond the product and services paid for.

Customer Loyalty Programs – The Good, The Bad, The Ugly

We have shared powerful statistics on the cost of Customer Acquisition vs. Customer Retention. According to Gartner 80% of your future profits will come from 20% of your existing customer base. In other words – you need to look after your existing customers.

Brands are investing in loyalty programs to help increase customer retention, generate loyalty, provide a point of competitive differentiation, and ultimately get customers back in to store. Many, however, miss the mark when it comes to looking after their existing customers. Some brands offer loyalty programs which do not actually benefit the customer or are difficult to use, others offer loyalty programs purely as a marketing ploy. Many loyalty programs actually have a bad reputation. The customer thinks they will be spammed with offers, the business carries the points risk and staffs are reluctant to ‘sell’ the program to customers.

If implemented and managed properly, loyalty programs have so much potential. They enable brands to get to know their customers better – the more the customer shops with them, the more they reveal about themselves, making it easier for the brand to continue the conversation with the customer.

What Does Genuine Loyalty Look Like?

It’s important to establish what genuine loyalty looks like. Customology defines loyalty as “where a customer would still choose your brand over others when given the choice (and incentives).” It’s a two-way relationship between the brand and the customer.

There is a clear difference between Behavioural Loyalty and Attitudinal Loyalty. A customer who shops regularly at the same place may be classed as Behavioural Loyalty, whilst a customer who tells their friends how fantastic a brand/product is would be referred to as Attitudinal Loyalty. The two are not mutually exclusive – it’s possible to have a customer with both traits. They are your best type of customer (or should we say advocate). Advocates are guaranteed to be back, and they will bring their friends with them. They’ll promote the brand any which way they can – including social media and online reviews sites. More and more customers are referring to customer reviews first when researching a new product or service, so you need to look after this elite customer group.

When determining customer loyalty, ask yourself the following question: Will the customers still chooses you if other things are equal – price, value added, if something goes wrong? If the answer is yes – then you have a very loyal customer – hold onto them.

Don’t Mistake Convenience For Loyalty

Today’s customers are time poor, they want an easy life, so more often than not, don’t spend time shopping around for better deals or benefits. This does not make them loyal to a brand. Don’t mistake habit for loyalty. It’s important brands monitor repeat transactions and identify habitual behaviour. This will enable you to be more effective in your marketing communications.

Don’t Mistake Convenience For Loyalty

There are several different ways to measure a consumer’s devotion to your brand.

Customer Lifetime Value (CLV) – The CLV measures how much value someone will bring your company over their lifetime. Instead of assessing individual purchases, this number will help you protect your company’s future success. Repeat Purchase Rate – You can also measure your customer’s loyalty by determining your repeat purchase rate. This is a percentage of your entire client base that conducts repeat business with you.

Net Promoter Score (NPS) – The net promoter score is a questionnaire you send your customers to see how likely they are to recommend your services or products. The survey asks respondents to answer on a scale of 1 to 10. If their score is 6 or lower, they’re considered detractors. Those who answer 7 or 8 are passive and those with an answer of 9 or 10 are promoters. You calculate your NPS by subtracting the total number detractors from the total number of promoters. This number tells you how many people are likely to recommend you.

Survey – With a survey, you can evaluate your customers’ satisfaction, trust, brand esteem and your company’s perceived value and quality. Asking questions related to these subjects can give you insight into the areas that make someone devoted to your brand.

Customer Loyalty Survey Results

Once you send your customer loyalty survey, start preparing for the analysis phase. When you review the data you collected from your survey, review answers to see trends in different areas. First, look at the questions related to satisfaction. This will tell you whether consumers feel an overall satisfaction or not. You can also look at individual questions to pinpoint certain areas of satisfaction regarding particular products or customer service.

Next, evaluate the customer loyalty survey questions you asked related to trust for the company. The answers will tell you if your people trust your brand and what encouraged them to do so. Looking at questions related to brand esteem will also tell you how your customers feel about your brand in regards to familiarity and if it’s is well recognizable.

Lastly, you will evaluate how consumers perceive your quality and value. Do they find your services and products a good value? Are they high-quality compared to your competitors?

Analyzing your survey will tell you which areas are producing the most loyalty and which aren’t. Once you figure out your company’s problem areas, you can address them to help more consumers become devoted. If your company offers a Loyalty Reward Program, feel free to also include Customer Loyalty Program Survey Questions in your next survey. These results will tell you if your program is effective at retaining business or not.

Customer Loyalty Survey Questions:

With the help of Herculean Rewards, we will create your own customer loyalty survey questions like the following.

  • If a competitor sold the same products in a more convenient location, how likely would you switch?
  • How likely would you win more customers even if a competitor was cheaper?
  • How is the quality of your customer service doing?
  • Do customers trust your brand, are they happy with your services?
  • Compared to your competitors, how did your customers rate your products/services?
  • How likely are your customers to recommend your services or products to others?
  • From 1 to 10 how did your customers scare your services or products?