The importance of customer loyalty in business


A customer can be defined in the Economic sense, as being the natural or legal person, who makes the decision to buy a good or a service, occasionally or habitually, from a supplier, or trade. It is a person who entrusts his interests to a person (expert) in exchange for a good. In a simpler way, the customer, therefore, receives a good or service in exchange for a sum of money paid to the supplier.

Customer loyalty leads to repeat purchases and builds brand ambassadors.

As for the clientele, it designates all the clients of a craft, commercial or service company. It even consists of the most essential aspect of the goodwill of a commercial enterprise. In view of these definitions, it is therefore obvious that the customer is the essential element for the development of a company. It is therefore important for an entrepreneur not only to be in search of new customers, but above all to build customer loyalty.

The expression “customer loyalty” can be defined in essence as being: all the activities and strategies aimed at encouraging customers to continue to buy your company’s products and services rather than leaving to compete. .

It is therefore fundamental to build customer loyalty, because Customer loyalty is of paramount importance for the growth of a company over the long term. Customers who have purchased from you know your company, making them easier and more predictable sources of future profits. They are not one-time customers since they buy regularly and do so knowingly: you have already proven yourself by selling them quality, at a fair price, combined with excellent customer service, so they are house is a given.

Customer loyalty is essential, for the long-term growth of a company, in the quest for the development of a business for a company it is much easier to focus on the acquisition of new customers, except that this very often leads us to overshadow the satisfaction of the customers we have already conquered. An attitude that can have negative consequences on the results. It is clear that by opting for this process, the risk is clearly the loss of speed on the ground, and in this case it will be necessary to redouble efforts and hard work to go up the slope.

In light of the above, it is important for every entrepreneur to take stock of customer loyalty. Because as much as the acquisition of new customers is important, the loyalty of old ones is necessary. If you neglect your old customers, you will give the impression of not being interested in customers who have already purchased your products, so you must put in place mechanisms of a balance, in order to accelerate growth and optimize the performance of your structure.

Why does Customer Loyalty Matter?

Customer loyalty is the force that drives customers to return after they have already reached the end of the sales funnel. Providing these customers with a consistently positive experience and satisfaction will increase revenue and generate repeat purchases.

It’s no secret that the cost of finding and nurturing new leads is significantly higher than the cost of actively retaining existing customers. But more than that, loyal customers contribute to the development of their favorite brands. Loyal customers recommend your brand to friends and colleagues. Whenever new products and services are released, we are interested in trying them out. Provide honest and effective feedback. When your loyal customers truly love your brand, they invest in your brand’s success.

What is a customer’s lifetime value?

A customer’s lifetime value (CLTV or simply CLV or LTV) is a measure of the revenue that a particular customer will generate for a brand over the entire time they interact with an organization, from customer acquisition to final purchase.

A customer’s lifetime value is an effective way to quantify the total business value of an individual customer.

What is Wallet Share?

Of course, the customer is not in a vacuum. Other companies, perhaps some of their competitors, will also pay. Tracking wallet share is important to understand customer loyalty.

Wallet share is to look at the total amount customers spend on products and services in your industry, and then figure out how much of that money they spend on our company’s products or services.

Wallet share is one of the most reliable indicators of brand preference. It shows how a company compares to its competitors in terms of revenue as well as customer loyalty.

Influence of Loyalty

We often talk about customer loyalty in terms of metrics and formulas, but in fact there are countless factors that can influence customer loyalty to a particular brand. Many of these factors are relatively fixed across industries. Value, convenience, and service are all essential factors in determining brand loyalty. However, customer loyalty can also be affected by industry and channel .

Communication and support channels

Online customers may be overall more loyal than customers who prefer physical shopping, which may lead to an increase in the number of self-service and other support channels.

Connecting through your preferred channels is a key factor in creating a positive brand experience for your customers. In-store stores tend to have limited contact points and support options. Customers have no choice but to speak to store associates or call customer service for assistance. Online businesses can choose from a variety of service and support options with no business hours restrictions.

According to a Google report , 75% of online food store customers continue to use an online food service they have used for the first time.

Types of products and services

The types of products and services sold can also play a role. Cost and service are often the only differentiators in industries where all options offer essentially the same service. For example, if more than one Internet service provider can be selected, customers will prefer the provider with the fewest number of obstacles and the lowest overall price. And when other providers start offering more lucrative discounts and improved services, customers will switch to the new service, regardless of loyalty.

On the other hand, industries focused on providing a differentiated customer experience (eg mobile device service providers) will be more affected by customer loyalty.

Purchase frequency

An industry that offers a product or service that customers purchase on a regular basis will likely be more loyal than an industry that purchases occasionally.

Consider, for example, restaurants and grocery stores. As customers buy food and other supplies on a weekly (or daily) basis, you build relationships with your brand and build brand awareness. So you are more likely to use the same business again. In contrast, airlines have low customer loyalty, especially among customers who do not fly regularly and seek the lowest prices.

Your industry, the type of product or service you’re selling, can help determine customer loyalty, but it doesn’t end there. Even the industries with the lowest customer loyalty can be improved by implementing a customer loyalty strategy.

How to increase Customer Loyalty

As mentioned earlier, the three key components of customer loyalty are value, convenience, and service. Therefore, the key to improving customer loyalty is improving one or more of these key areas. Here are some strategies to increase customer loyalty.

Excellent customer service

Customer service can have a decisive impact on your business, especially customer loyalty. Depending on a positive or negative brand experience, customers get a concrete impression of your brand and decide whether to continue trading in the future. There are numerous strategies for improving customer service, but most of them boil down to how well you listen to your business partners and how you use this information to improve customer service.

Providing great customer service is not a one-time task. It is an ongoing responsibility that integrates almost every aspect of your business. In other words, when making decisions across organizational structures, the first question that always comes to mind is how these changes will affect the customer experience. Gather feedback from customers interacting with your product or service, and then pass it on to the responsible team or department within your organization that can address the root cause. Click here to learn more about managing customer service solutions .

Anticipate and deliver customer needs

Meeting the needs of your customers is a sure way to increase brand loyalty. Unfortunately, sticking to a way of responding only when customers need it is always one step behind. Anticipating customer needs based on the problem the product or service is trying to solve and the user population that needs solving the problem should be an integral part of the product design process.

As with most aspects of the customer experience, the ability to listen and analyze your customer base is crucial when anticipating customer needs. It can be as simple as engaging with customers on social media or asking them to participate in a survey, or as complex as conducting in-depth research on search engine keywords or implementing predictive analytics to spot trends.

Consider the brief disruption of digital services as an example of providing services tailored to customer needs. Customers may not have noticed the temporary service interruption, but contacting customers who may have been affected and offering them some compensation, such as a special discount or free credit, can proactively address the issue. Proactively monitoring service outages and acknowledging problems can prove that you are committed to the customer experience and improve customer loyalty.

personalized experience

Because humans are social animals, customers are much more likely to do business with brands they feel connected to. To foster this bond, companies must personalize the customer experience at the individual level. This means conducting detailed customer profile research and segmenting user populations based on preferences and demographics, as well as documenting and reviewing all past interactions with customers.

Being able to speak directly with individual customers, mention their names, and tell them about your past experiences and the products or services they are using proves that you are investing in their success.

All-in-one convenience

Customers want more than just a solution. I want a hassle-free solution. Convenience reduces friction in the customer experience, ensuring simpler, more secure interactions.

For convenience, look at the customer journey from the customer’s perspective. Isn’t the signup process unnecessarily complicated? How about payment? Are you sure you have support options across multiple channels? Or doesn’t the customer have to use one or two specific channels? Any part of the customer journey that slows down or confuses processes is an area that needs attention.

Unfortunately, support agents often become an intermediate step in the process, preventing quick resolution. Service Catalog provides a centralized solution for common support requests that can be automated without agent intervention. These requests can range from a password reset to reporting a lost credit card. Streamline service and support requests to reduce resolution times and provide a better overall customer experience.

Best-in-class option

Increasing customer loyalty, which can be easy to say but very difficult to achieve, is simply a matter of staying ahead of your competitors. Take a look at our major competitors. First of all, look at your competitors’ customers.

Read the reviews to figure out which parts of your competitor’s customer service are successful and which are bad. Then you can catch up where they are good at and stay ahead of where there is room for improvement.

Making feedback a pillar of the customer experience

Feedback is essential to creating an atmosphere of customer loyalty. Make it easy for your customers to reach out to you with their suggestions, questions, comments or concerns, and reach out to them without hesitation.

When seeking feedback, be specific about what you want to know. You should then follow up by providing the necessary solutions and thanking the customer for providing honest criticism.

Reward customers

Loyalty programs are a great way to say ‘thank you’ to customers who support your brand. It’s also a great way to attract undecided customers to your brand. Providing customers with rewards such as discounts, special treatment, and prizes can encourage customers to come back and purchase again.

Improving the treatment of employees

It is easy to imagine that a customer relationship exists between two parties: the customer and the brand. However, the truth is that customer relationships also include many other individuals, namely all employees who face the customer.

From the customer’s point of view, the responsive staff represents the brand. If an employee is not satisfied with the company, it will manifest in their interactions with the customer and the customer will not be satisfied either. And your employees need the right tools, training and resources to provide effective service. Everything from the convenience of accessing accurate information on the screen to machine language integration to provide proposed solutions while interacting with customers. Treating your employees well, rewarding them for good behavior, and providing them with the assets they need will empower you to create more positive experiences for your customers.

Connect with customers in the community

No matter how honest a brand may be with its customers, customers will trust other users more than the brand. The downside of this universal truth is that customer-facing mistakes (real or guessed) can spread like wildfire through bulletin boards and social media, negatively impacting other customers’ brand perceptions. The upside is that you can take advantage of this community preference.

By building a community bulletin board in your customer self-service portal, your customers can interact and share their experiences with your brand. A positive experience will strengthen trust among the user cohort, and a negative experience will provide an opportunity to step in and rectify the situation before it escalates.

Outstanding Customer Loyalty Program

ServiceNow has helped a variety of businesses create superior customer loyalty programs.


7-Eleven has launched a 7-Help customer support center through ServiceNow Customer Service Management. 7-Help consolidates 20 Help Centers including HR, Payroll, Merchandising, IT, and Facility Management Help Centers to provide users with a single platform to report issues. As a result, resolution rates increased by 205%, response times decreased by 75%, and case volume decreased by 93%.

Capita Software

Capita Software’s customer support system was overly complex with 26 independent service desks and 23 different ticketing tools supporting 7 separate business units. ServiceNow has proven to be an effective and passionate partner that can provide you with the right features to set up a streamlined, standardized service desk for your entire organization. The result is a 50-point increase in the Net Promoter Score, a measure that accurately reflects customer loyalty and satisfaction.

How to measure Customer Loyalty

In today’s world where customer loyalty depends a lot on it, and you come up with a variety of strategies to increase customer loyalty, of course you want to measure how effective your loyalty campaigns are. Here, we’ll explore and briefly describe the most effective metrics for measuring customer loyalty.

Net Promoter Score ®

The Net Promoter Score (NPS), which consists of a scale from -100 to 100, indicates a company’s willingness to recommend its product or service to others with a different customer base. NPS is relatively direct and easy to use, and is a clear indicator of overall customer loyalty.

Reverse departure

A reverse churn refers to a situation in which the total revenue of existing customers exceeds the revenue lost due to downgrades and cancellations. Reverse churn means the organization is managing its existing customers well, and they are spending enough money to make up for potential churn.

Customer retention

Customer retention measures the number of customers who continue to do business with your company over a period of time. Customer retention is an essential factor in determining the lifetime value of customers.

Repeat buyer

Repeat buyers are closely related to customer retention. Compare the number of new and returning customers to see how much customer retention is increasing or decreasing.

Customers who purchase multiple products

If repeat buyers regularly purchase the same product, it means they have trust and loyalty to the product itself. However, if repeat buyers start to turn their attention to other products as well, it means they have trust and loyalty to the brand. It shows that you put your trust in the brand and that you are satisfied with the experience it provides.

Customer Loyalty Index (CLI)

Customer Loyalty Index considers several factors, such as NPS, repeat purchases, and upsells, paired with a customer-focused questionnaire. Customers ‘score’ companies based on their willingness to recommend a brand to others, to try other products from the brand, and to use the brand repeatedly in the future.

Customer Brand Engagement

How often do customers engage with your brand on social media, leave reviews, or visit your website? Tracking customer engagement across all available channels gives you a better picture of overall customer loyalty.


Customer loyalty is the driving force behind business success. That said, making customers truly loyal to your brand requires more than just offering the lowest price or offering a fun reward. Customer loyalty initiatives are usually very long-term projects and require credible analysis, careful strategy, and solid coordination between all aspects of the business. And above all, by continuously improving the customer journey, quickly identifying and resolving issues as they arise, providing an improved experience for prospective customers.

When these factors are in place, customer loyalty will lead to good feedback, increased revenue, increased repeat purchases, and, most importantly, the brand fans who are passionate enough to communicate your brand’s message to others.