Customer loyalty: what it is, strategies, examples and how to measure it
From satisfied customer to repeat customer: strategies, examples and metrics
Customer loyalty is the set of actions a business takes so that people who have already bought from it buy again, choose it over the competition and recommend it. A loyal customer doesn’t buy just once: they come back, spend more over time and speak well of you.
It isn’t the same as satisfaction. A customer can be happy with a purchase and never come back. Loyalty aims to turn that good experience into a habit.
What’s the difference between a satisfied customer and a loyal customer?
| Satisfied customer | Loyal customer | |
|---|---|---|
| Purchases | One or a few | Buys again regularly |
| When a competitor makes an offer | May leave | Usually stays |
| Recommendations | Sometimes | Recommends you and leaves reviews |
| Relationship with the brand | Fine | Trusts it and gives it feedback |
Build customer loyalty with email marketing
Email is one of the most effective channels for staying in touch with your customers. Find out how with Mailrelay.
Why is customer loyalty important?
- Keeping customers costs less than winning new ones. According to Harvard Business Review, acquiring a new customer costs between 5 and 25 times more than keeping one you already have.
- Small improvements make a big difference. A study by Frederick Reichheld (Bain & Company), cited in the same article, found that increasing customer retention by 5% can raise profits by 25% to 95%.
- Loyal customers bring in new customers. Word of mouth and reviews are the most credible advertising there is.
- More predictable revenue. A base of repeat customers lets you plan better, especially if you’re a small business.
Types of customer loyalty
- Incentive-based: the customer comes back because they get something, such as points, discounts or gifts. It works fast, but if a competitor offers more, they leave.
- Experience-based: they come back because they’re treated well, the product is good and buying is easy. It’s the longest-lasting kind.
- Emotional: they share the brand’s values or feel part of a community.
- Convenience-based: switching is hard for them, because you already have their details, their history or a subscription. It retains customers, but it doesn’t build affection unless it’s combined with the others.
8 customer loyalty strategies, with examples
Respond quickly, with real people
Answer questions the same day and solve problems without passing the customer from one department to another. Example: an online store that replies to issues in under 24 hours and replaces a damaged product without asking for it to be returned.
Make the welcome count
The first few days shape the relationship. Example: a welcome email telling the customer what to expect and a guide to getting the most out of their purchase. For services, a multi-step onboarding.
Create a loyalty program
Reward repeat purchases. Example: a coffee shop that gives away the tenth coffee, or a store that gives points customers can redeem for discounts.
Personalize
Use what you know about each customer. Example: recommending products based on their last purchase or wishing them a happy birthday with a discount (birthday email).
Don’t disappear after the sale
Example: an email 7 days later asking whether everything went well, with usage tips and a link to leave a review.
A newsletter with tips, news or other customers’ stories keeps the relationship alive without selling in every message.
Listen and act
Ask with a short survey or with NPS and, above all, tell customers what you’ve changed thanks to their answers.
Win back the ones drifting away
Spot customers who haven’t bought in a while and send them a winback campaign with a reason to come back.
Loyalty programs: types and examples
| Program | How it works | Example |
|---|---|---|
| Points | Every purchase earns points that can be redeemed | 1 point per euro; 100 points = €5 off |
| Tiers | Bigger perks the more the customer buys | Free shipping from the silver tier up |
| Cashback | A percentage is returned as credit for the next purchase | 5% of every order |
| Paid membership | The customer pays a fee in exchange for perks | Free shipping and exclusive offers all year round |
| Referrals | Customers are rewarded for bringing in a new customer | €10 for both on the first purchase |
How to measure customer loyalty
| Metric | What it measures | How it’s calculated |
|---|---|---|
| Retention rate | How many of your customers stay with you | (Customers at the end − new customers) ÷ customers at the start × 100 |
| Repeat purchase rate | How many customers buy again | Customers with more than one purchase ÷ total customers × 100 |
| Customer lifetime value (CLV) | How much a customer brings you over the whole relationship | Average purchase value × purchases per year × years as a customer |
| NPS | Whether they would recommend you | % of promoters (9-10) − % of detractors (0-6) |
Example: you start the quarter with 200 customers, gain 50 new ones and end it with 220. Your retention rate is (220 − 50) ÷ 200 = 85%. The other 15% is your churn rate.
Customer loyalty with email marketing
Email is the most direct channel for keeping up the relationship after the sale: it reaches the inbox of people who have given you permission, and it can be automated and measured. These are the emails that do the most for customer loyalty:
| When it is sent | What it’s for | |
|---|---|---|
| Welcome | Right after signing up or the first purchase | Make a good impression and explain what to expect |
| Post-purchase | A few days after the purchase | Answer questions and ask for feedback |
| Birthday or anniversary | On the customer’s date | Show them you have them in mind |
| Newsletter | On a fixed schedule | Add value without always selling |
| Re-engagement | After a while with no purchases or opens | Win back inactive customers |
You’ll find the types of messages in detail in Loyalty messages, and strategies with examples in the post 8 strategies to build customer loyalty via email.
How Mailrelay helps you
With Mailrelay, you set up your loyalty emails once and they send themselves. Automations, included in the free account, let you send a welcome email on signup, wish each subscriber a happy birthday and trigger a sequence when someone stops opening your campaigns. You can also add SMS to those automations.
With groups, segments and custom fields, you send each customer what interests them. For example, offers for your best customers or a campaign for those who haven’t opened in 90 days. Open and click statistics, included in the free account and in Enterprise, tell you what works. The free account includes up to 80,000 emails a month and 20,000 contacts.
Automate your customer loyalty strategy
With Mailrelay, you can schedule campaigns and automated flows that keep your customers close to your brand.
Frequently asked questions about customer loyalty
What’s the difference between loyalty and retention?
Retention measures whether the customer stays. Loyalty goes further: it aims for the customer to stay because they prefer you, and to recommend you.
How do you build customer loyalty in a small business?
Start with what delivers the most on a small budget: a personal touch, a welcome email, a follow-up after the purchase and a useful newsletter. A simple points program can come later.
How much does a loyalty program cost?
It depends on the incentive. A stamp card or a referral discount costs very little. Points and tier programs need software and a budget for the rewards.
What is loyalty marketing?
It’s the part of marketing that focuses on existing customers instead of winning new ones. It’s closely tied to relationship marketing.
How often should I measure customer loyalty?
Retention and repeat purchase rates, every month or every quarter. NPS, two or three times a year, so you don’t wear your customers out with surveys.