What is Loyalty in the CX Landscape?

Rebekah Carter

Discover how to drive positive, ongoing customer relationships through CX

Analysis
What is Loyalty in the CX Landscape?

Customer loyalty is one of the most important assets a business can earn. More than just a buzzword, this term refers to the depth of the relationship you build with your target audience. The more loyalty you gain, the more repeat purchases your clients make.

Unfortunately, while many business leaders know loyalty is important, many don’t understand exactly what it is, or where it comes from. This makes it difficult for businesses to develop CX strategies capable of cultivating loyalty.

Today, we’re going to define what loyalty means in the CX space, how you can measure loyalty among your customers, and what it takes to grow consumer relationships.

What is Customer Loyalty?

Customer loyalty is the result of multiple high-quality (and positive) connections between you and your target audience. Loyalty is defined by a strong connection that brings your customers back to your company time and time again. People are loyal to brands they associate with positive experiences, from great customer service to quick delivery speeds.

Customer loyalty is important because your loyal clients are generally more valuable than new ones. Not only is it cheaper to attract and convert existing customers, but they can spend around 67% more than new clients too.

Loyal customers are also more likely to be advocates for your company. They act as champions for your company, attracting new customers by sharing their experiences online and on social media. Loyal customers leave positive reviews and stick with your company, even when you go through problematic periods.

Measuring Customer Loyalty

Customer loyalty often fluctuates over time, driven by a host of factors, from consumer trends to changes in your product portfolio. Tracking customer loyalty in your business can often be an excellent way to determine which of your efforts are driving the best results for your brand.

Often, CCaaS tools, CRM systems, and other solutions for customer experience can help you to measure customer loyalty, looking at factors like:

  • NPS (Net Promoter Score): Net Promoter Score gives you an insight into the customer sentiment towards your brand, and the willingness of customers to recommend your company to other consumers. Net Promoter Score is measured by asking how likely a customer is to advise someone else to use your company.
  • Customer loyalty index: Designed to measure loyalty and the intention of a customer to remain loyal in the future, CLI is a useful metric. You can measure this metric using survey questionnaires, similar to measuring NPS.
  • Repeat purchases: Regular purchases from the same customer or series of customers several times is a must-have metric for loyalty. It’s also worth noting if the same customer makes multiple purchases across different product categories and departments.
  • Engagement levels: Customer engagement of any kind, from purchases to someone commenting on your social media campaigns, is a great sign someone is personally invested in your brand. Measurable data around engagement can include everything from the number of reviews left on your site, to email click-through levels, or registrations for webinars.
  • CSAT: High levels of customer satisfaction, often measured by ratings or reviews from your customers, often lead to a high level of customer loyalty too.

Ways to Improve Your Customer Loyalty

You can build customer loyalty in a range of different ways in most business environments. The key to success in most cases is first learning what encourages your audience to keep buying from you. For instance, the most common driver of customer loyalty is excellent customer service, matched with a great product. Here are some of the best ways to build customer loyalty.

  • Great customer service: Excellent customer service is essential to building customer loyalty. Your audience wants to feel respected, understood and listened to. This means you’ll need to track the customer journey and come up with ways to serve your audience on every channel. Good customer service tools like CCaaS systems and CRM software are extremely useful for improving customer service.
  • End to end customer support: To provide exceptional customer service, companies also need to understand the complete customer journey from start to finish. Once you know what leads your audience – from the point of awareness to the stage when they’re willing to advocate for your brand – it’s much easier to drive loyalty. 
  • A full strategy for mapping the customer journey will ensure you can serve and support your audience every step of the way.
  • CX Strategy: Good loyalty from a target audience often comes from the careful creation and use of a long-term CX strategy. You’ll need a plan for how you’re going to develop relationships with your target audience through not just great service, but high-quality products and consistent communication too. A comprehensive CX strategy involves learning how to “retain” existing customers by ensuring you’re giving your clients consistently valuable experiences.

Investing in employee experience is also an extremely important way to improve customer loyalty. Not only can your employees better serve your customers when they have a great experience at work, but they also influence how customers feel about you. Look at companies like Starbucks for instance, 87% of customer affinity for that brand is driven by how it treats employees.

What About Customer Loyalty Programs?

Developing long-standing and consistent customer loyalty among your target audience is a process that requires careful planning, and a long-term strategy.

However, you can enhance your chances of success with something called a “loyalty program”. This is essentially a tool used to help cultivate and enhance loyalty among your target audience by rewarding people who advocate for, support, and purchase repeatedly from your brand. Loyalty programs might include winning points every time you make a purchase from a brand, which you can eventually trade in for tangible rewards.

A company with good customer loyalty doesn’t have to use loyalty programs, but many leading companies find this helps to drive things like referrals and repeat purchases.

Ultimately, creating and preserving customer loyalty isn’t a one-size-fits-all process.

 

 


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