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Customer loyalty · 

7 minutes

Cormac O'SullivanPiggy

Customer Loyalty: The What, Why, and How (with examples)

What is Customer Loyalty?

Customer loyalty is the result of consistently positive emotional experiences, physical attribute-based satisfaction, and perceived value of an experience, which includes the product or service. It's about the behaviour of repeat customers, coupled with their feelings towards your business. Their preference for your products and services leads to repeat purchases and recommendations to friends and family, acting as your business's ambassadors.

The Benefits of Customer Loyalty: 15 Statistics

There's a wealth of benefits that come from nurturing customer loyalty. Here are 15 compelling statistics demonstrating the advantages:

  • Cost Efficiency: It's 5-25X more expensive to acquire a new customer than to retain an existing one.

  • Increased Spending: Loyal customers spend 67% more than new ones.

  • Profitability: Increasing customer retention rates by 5% increases profits by 25% to 95%.

  • Loyalty Program Effectiveness: 79% of consumers say loyalty programs make them more likely to continue business with brands.

  • Referrals: Loyal customers are 4X more likely to refer others to your business.

  • Feedback: 50% of loyal customers have a suggestion for a company.

  • Retention vs Acquisition: A 2% increase in customer retention has the same effect as decreasing costs by 10%.

  • Churn: 68% of customers leave because they believe you are indifferent to them.

  • Conversion: Loyal customers have a 60%–70% chance of conversion.

  • Loyalty vs Satisfaction: Only 14% of customers who are dissatisfied with a product will not buy from that company again, but 9 out of 10 customers who rate a company's service as 'superior' will continue to do business with them.

  • Customer Service: 73% of customers fall in love with a brand and remain loyal because of friendly customer service reps.

  • Social Media: Brands with superior customer experience bring in 5.7 times more revenue than competitors that lag in customer experience.

  • Repeat Purchase: Loyal customers are 5x as likely to repurchase, 5x as likely to forgive, and 4x as likely to refer.

  • Credit Card Rewards: 84% of consumers say they’re more apt to stick with a brand that offers a loyalty program. And 66% of customers say the ability to earn rewards changes their spending behavior.

  • Customer Satisfaction: A totally satisfied customer contributes 2.6x as much revenue as a somewhat satisfied customer, and 14x as much revenue as a somewhat dissatisfied customer.

How to Build Customer Loyalty

Building customer loyalty is a long-term investment that requires consistent effort, strategic planning, and a genuine commitment to customer satisfaction. Here are some of the proven strategies you can implement to boost customer loyalty.

1. Provide Exceptional Customer Service

The quality of your customer service can significantly impact your customers' loyalty. Customers who receive exceptional service are more likely to become repeat customers and recommend your brand to others. This includes responding to inquiries promptly, resolving issues efficiently, and always being courteous and respectful in your interactions.

2. Personalize Customer Experiences

In an era where customers are inundated with generic marketing messages, personalization can make your brand stand out. Use customer data to understand their preferences, habits, and needs, and tailor your offerings and communications accordingly. This could include personalized product recommendations, tailored email marketing, or customized offers.

3. Implement a Customer Loyalty Program

Loyalty programs are a great way to incentivize repeat purchases and reward your loyal customers. These programs can take various forms, such as point-based systems, tiers, or referral programs. The key is to make the rewards desirable and attainable to encourage continued participation.

4. Regularly Request and Act on Customer Feedback

Actively seeking customer feedback not only provides valuable insights into how you can improve but also shows customers that you value their opinion. Use surveys, social media, or direct communication to gather feedback, and, most importantly, take action on it to improve your products or services.

5. Prioritize Quality and Consistency

Ensure that your products or services are of high quality and consistently meet or exceed customer expectations. Customers are more likely to stay loyal to a brand that they can rely on to deliver excellent quality consistently.

6. Cultivate a Strong Brand Community

A strong brand community can foster loyalty by creating a sense of belonging among customers. This can be achieved through social media, online forums, or community events. Engage with your community regularly, encourage discussions, and make customers feel like they are part of your brand's story.

7. Leverage Social Proof

Social proof, such as reviews and testimonials, can be a powerful tool in fostering customer loyalty. Potential customers are more likely to trust and become loyal to a brand that others endorse. Encourage customers to leave reviews or share their experiences on social media.

By implementing these strategies, you can create a strong foundation for fostering customer loyalty. Remember that building customer loyalty is not a one-time effort but an ongoing process that requires dedication, patience, and a sincere commitment to customer satisfaction.

Customer Loyalty and Retention: Do They Go Hand in Hand?

Absolutely, customer loyalty and retention are two sides of the same coin. While customer loyalty revolves around the emotional attachment and positive feelings a customer has towards a brand, customer retention focuses on strategies and actions to reduce customer defections. Both have a shared objective - keeping customers engaged and interested in your brand over the long term. According to a study by Bain & Company, a 5% increase in customer retention can lead to an increase in profits between 25% to 95%.

Customer Loyalty Programs

Customer loyalty programs are a proven strategy to encourage repeat business. A well-structured program rewards customers for their repeated business. This reward could be points that can be redeemed for products or discounts, or even exclusive access to new products.

According to a survey by Accenture, loyalty program memberships are on the rise, but active engagement with these programs is declining. This highlights the need to ensure your program is attractive and rewarding for your customers.

Building a Customer Loyalty Program: The Steps

Creating an effective customer loyalty program involves several steps. Here's a guideline to help you build your own program:

  • Understand Your Customers: Understand your customer's needs, preferences, and buying behavior. Use data analytics to gain these insights.

  • Set Clear Objectives: Define what you aim to achieve with your loyalty program. This could be increasing sales, improving customer retention, or acquiring new customers.

  • Design the Program: Design a program that appeals to your customers. It should be simple to understand and use, and the rewards should be attractive and achievable.

  • Promote Your Program: Use various channels like email, social media, and in-store promotions to make your customers aware of the program and its benefits.

  • Measure and Adjust: Regularly review the performance of your loyalty program and make necessary adjustments to keep it attractive and engaging.

Customer Loyalty Marketing

Customer loyalty marketing is a strategy to retain customers and increase customer loyalty by delivering personalized experiences, relevant content, and rewards. It goes beyond merely offering promotions and discounts, focusing on building long-lasting relationships with customers. Here are some tactics to consider for your customer loyalty marketing strategy:

  • Segmentation: Divide your customers into segments based on their behavior, preferences, and demographics. This helps you create targeted marketing campaigns that cater to their specific needs.

  • Personalization: Use the information you have about your customers to tailor your marketing messages, product recommendations, and offers. This demonstrates that you understand and value them, which can strengthen loyalty.

  • Multi-Channel Engagement: Engage with your customers across various channels like email, social media, and in-app messaging. This ensures a consistent experience and keeps your brand top of mind.

  • Exclusive Offers and Experiences: Provide exclusive offers, discounts, or experiences to your loyal customers. This could include early access to new products, special events, or personalized rewards.

  • Incentivize Referrals: Encourage loyal customers to refer friends and family by offering incentives for successful referrals. This not only helps you acquire new customers but also strengthens the loyalty of your existing customers.


In the ever-evolving and competitive business landscape, customer loyalty has become more than just a buzzword; it is the lifeblood of long-term business success. A solid understanding of customer loyalty and its many facets can provide a roadmap to foster long-lasting relationships with your customers. Ultimately, it's about fueling sustainable business growth.

From understanding what customer loyalty is to the multitude of benefits it provides, to building and implementing a loyalty program and employing effective loyalty marketing strategies, this guide has covered the essentials of customer loyalty. The key takeaway is that earning and maintaining customer loyalty requires a consistent focus on delivering exceptional customer experiences at every stage of the customer journey.

It's important to remember that building customer loyalty isn't achieved overnight. It's a strategic, ongoing process that demands time, effort, and resources. By putting customers at the heart of your business, actively seeking their feedback, and continually refining your products, services, and customer interactions based on that feedback, you can create a loyal customer base that not only contributes to your bottom line but also advocates for your brand.

As you move forward in your customer loyalty journey, keep these insights in mind. They will serve as valuable guiding principles as you work to cultivate and nurture a loyal customer base that drives your business forward. Remember, in the realm of customer loyalty, it's the businesses that listen, adapt, and consistently deliver that truly stand out.

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