Customer Loyalty, Building Customer Loyalty

Importance of Building Customer Loyalty for Businesses

In today’s highly competitive e-commerce marketplace, building customer loyalty matters a lot. Businesses that provide superior customer service and positive experiences can easily retain a loyal base of customers. Let’s look at the importance of customer loyalty and why businesses must focus on improving customer loyalty.

Customer Loyalty, Building Customer Loyalty, Importance of Customer loyalty

What do you understand about customer loyalty?

Customer loyalty can be described as an enduring emotional relationship between a business and its customers. How frequently a customer engages and makes a repeated purchase with a business shows loyalty towards a particular brand.

Businesses looking for ways to increase customer loyalty must know that loyalty is the byproduct of a customer’s positive experience with a business.

In simple words, loyal customers can be described as customers who:

  • Make repeated purchases from the same brand
  • Use the products or services that they purchase
  • Interact with the particular brand via a variety of numerous channels
  • Act as a brand’s biggest supporter
  • Recommend the brand name to others (friends and family members)
  • Provide proactive and reactive positive feedback

Types of loyal customers

People can be loyal to a particular brand for various reasons. Usually, loyal customers can be categorized as:

  • Satisfied customers: Satisfied customers are the group of customers who are happy with the products and services. They never had any complaints and have made several purchases from the same brand. However, these customers can get lured easily by the competitor’s brand when they are offered better deals, offers, and discounts.
  • Price-loyal customers: As the name suggests, price-loyal customers stay with a brand when offered products/services at low prices. If they get the same thing from a different brand at lower prices, they will probably switch to the current brand. Businesses can easily keep these kinds of customers by offering them the best possible prices.
  • Convenience-loyal customers: Many customers like to purchase with brands that provide enough convenience. Many customers like brands that are easy to find, purchase with, and communicate with, who prefer convenience over lower prices. They remain loyal to the brand as far as they are offered enough convenience.
  • Freebies-loyal customers: Few customers are not attracted to a brand not due to the products or services they sell but because they offer other things. Customers loyal to freebies may purchase from a brand once in a while but don’t contribute enough to a brand’s revenue stream.
  • Customers loyal to loyalty programs: With the help of a customer loyalty program, businesses can create loyal customers. However, these customers may not be loyal to that company or the products they sell. They are only loyal to the company’s loyalty program because of the attractive deals offered in loyalty rewards.
  • Truly loyal customers: These are the customers who are truly loyal to a brand. They make repeated purchases and share their great experience with others. They also recommend the brand to their friends and family members.

Importance of building customer loyalty and how it is related to customer retention

Customer loyalty is all about the willingness of customers to communicate with or purchase from a particular brand frequently. A positive experience is one of the key things that encourage customers to become loyal to a brand.

Loyal customers are likely to make repeated purchases with that particular brand. It is important to note that loyal customers spend about 65% more on products and services than new customers and contribute up to 80% to a brand’s revenue stream.

Therefore, businesses must retain their existing customers. It is much easier to retain the existing ones as compared to acquiring new customers. Offering the best possible experiences to the existing customers will encourage customers to make frequent purchases and keep a long-term relationship with the brand.

Customer loyalty and customer retention go together. Loyalty is simply a state of mind that prompts a customer to engage with and purchase from a brand.

On the other hand, customer retention is a metric that tracks customer engagement and sales volume. Businesses that focus on building customer retention strategies can deliver and extract the utmost value from their existing customer base. Besides, building a customer loyalty platform with apparent consumer benefits can help maintain a good customer retention rate.

The future of customer loyalty

In recent years, there has been substantial growth in the new loyalty programs introduced by the businesses. Also, the existing programs have evolved greatly. Especially after the pandemic, there has been a huge surge in customer loyalty management.

Advanced technologies have enabled faster implementation of loyalty programs and customer retention strategies. It seems that more and more businesses will adopt the trends in customer loyalty to keep themselves ahead of their competitors.

Some of the key trends that are likely to remain in focus in the coming years include:

  • Increased focus on customer value segmentation driven by latest technologies
  • Delivering personalized touch through offering relevant offers
  • Rewarding customers based on their value for the business


To conclude, customer loyalty is all about acquiring, offering superior experiences, and providing great value to the customers. Businesses can easily create value and build a loyal customer base by implementing new and updated customer loyalty programs.

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