How do you know if your customers are loyal to your brand?

1 Customer satisfaction

Customer satisfaction is the basic requirement for brand loyalty. It means that your customers are happy with the quality, value, and service of your brand. You can measure customer satisfaction by using surveys, feedback forms, reviews, ratings, testimonials, or social media comments. You can also use the Net Promoter Score (NPS), which is a simple question that asks your customers how likely they are to recommend your brand to others on a scale of 0 to 10. The higher the score, the more satisfied and loyal your customers are.

2 Customer retention

Customer retention is the percentage of customers who continue to buy from your brand over a given period of time. It shows how well you can keep your customers from switching to competitors or dropping out. You can calculate customer retention by dividing the number of customers who made a purchase at the end of a period by the number of customers who made a purchase at the beginning of the period, and multiplying by 100. The higher the rate, the more loyal your customers are.

3 Customer lifetime value

Customer lifetime value (CLV) is the total amount of revenue that you can expect from a customer over their entire relationship with your brand. It reflects how much your customers trust and value your brand, and how often and how much they buy from you. You can estimate customer lifetime value by multiplying the average purchase value by the average purchase frequency by the average customer lifespan. The higher the value, the more loyal your customers are.

4 Customer advocacy

Customer advocacy is the extent to which your customers speak positively about your brand and influence others to buy from you. It is a powerful form of word-of-mouth marketing that can boost your brand awareness, reputation, and credibility. You can measure customer advocacy by tracking the number of referrals, mentions, shares, reviews, ratings, testimonials, or social media posts that your customers generate for your brand. The higher the number, the more loyal and engaged your customers are.

5 Customer loyalty programs

Customer loyalty programs are incentives that you offer to your customers to reward them for their repeat purchases and loyalty. They can include discounts, coupons, points, rewards, freebies, memberships, or exclusive benefits. They can help you increase customer satisfaction, retention, loyalty, and advocacy by making your customers feel valued, appreciated, and connected to your brand. You can evaluate the effectiveness of your customer loyalty programs by measuring the participation rate, redemption rate, retention rate, and referral rate of your customers. The higher the rates, the more successful your programs are.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?