What is customer loyalty?
Customer loyalty is a customer's ongoing willingness to keep buying from a company and choose it over competitors, driven by positive experiences, trust and perceived value. Loyal customers buy more often, spend more, forgive occasional mistakes and recommend the brand to others.
Loyalty vs retention
| Loyalty | Retention | |
|---|---|---|
| What it is | Attitude and preference | Whether customers stay |
| Measured by | NPS, repeat purchase, referrals | Retention rate, churn |
| Example | Chooses you despite a cheaper option | Renews the contract |
What drives loyalty
Product value, effortless service, trust, personalization, and recognition such as loyalty programs.
How to measure
Repeat purchase rate, NPS, share of wallet, referral rate and lifetime value.
