6 Types of Customer Loyalty

Customers who keep coming back to your company.

It’s every business’s dream to have loyal, happy customers that continue returning for repeat purchases and are highly satisfied with your brand. There are actually different types of customer loyalty.

Sure, you can grow your business by acquiring new customers, but why not invest more in your existing customers who have already proven loyal to your brand?

Loyal customers spend 67% more with businesses than new customers. Loyal and repeat customers are simply worth more to your business and are a key driver of revenue.

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What is customer loyalty?

Customer loyalty is the customer’s readiness to return to a company and engage in repeat business. This loyalty is usually generated as a result of outstanding and memorable experiences they have with the business.

Loyalty is a sign of a customer’s long-term investment in the brand. They are not one-time shoppers, but repeat purchasers who consider themselves to have a relationship with the company.

The importance of customer loyalty

Customer loyalty is important for a number of reasons.

More frequent purchases

60% of loyal customers will purchase more frequently from their preferred companies. The bottom line is, loyal customers will spend more with your brand. It stands to reason that if they make one purchase with you, they’re likely to make more.

Loyal customers don’t care if you have the cheapest products. If they like your brand, they’ll want to keep spending money with you. 93% of customers are likely to make repeat purchases with companies who offer excellent customer service.

It’s cheaper

It costs five times more to attract a new customer than it does to keep an existing one. Retaining loyal customers just makes good business sense. Not only is it cheaper to retain customers than to acquire customers, but it’s also easier. If a customer has bought from you once, they are much more likely to buy from you again. It’s much harder to convince a brand new customer to take a chance with your business.

More word-of-mouth referrals

If your loyal customers are happy enough they might consider recommending you to friends and family. Word-of-mouth referrals are the most powerful form of marketing and 88% of people had the highest form of trust in a brand when a friend or family member recommended it. 

Word-of-mouth marketing costs nothing and can help you attract new customers who are much more receptive to your business. If a brand is recommended by a friend or family member this means you’ve already managed to win at least one person’s trust.

Provides genuine opinions

Loyal customers are more open to giving you genuine opinions on your products and services. They’ve been using your products for a long time and are likely to have detailed ideas on what can be improved. New customers are very unlikely to give feedback – they’ll probably just try your product and move on if they don’t like it.

Only one out of 26 customers is likely to bring up their complaints, while the rest will just leave without saying a word. Your long-term loyal customers are a vital source of feedback that can help you solve problems with your service that you weren’t aware of.

Protects you from competitors

When you have customer loyalty, you don’t have to keep lowering your prices to keep pace with your competitors. Customers will naturally buy from you because they feel a sense of commitment to your brand, and understand that paying more gets them great service.

37% of customers considered themselves to be loyal to a company after at least five purchases. It takes quite a while to earn a loyal customer but once you do it’s totally worth it.

6 types of customer loyalty

Believe it or not, there are several types of loyal customers out there.

1. The value loyal customer

There are some customers out there who are loyal to a brand because it is offering the best prices. For these customers, it’s not about quality of service or any other factor. They are loyal to you simply because you have the cheapest products and offer the best value for money.

As soon as they find a better deal out there, they will be gone.

Keeping prices low is the key to retaining this type of loyal customer. You have to decide whether you want to compete based on price, and whether this kind of customer is worth it.

2. The opportunist loyal customer

This type of customer is loyal to your brand because it suits them. Buying from you offers the most favorable experience, whether that’s because your business is in the best location for them, or simply because they have their payment details saved on your system.

Opportunist customers don’t mind paying more for convenience. For them, it’s all about choosing the easiest option, and as long as your business represents that, they will be loyal.

This customer type could be tipped over into being genuinely loyal by small improvements to the customer experience and customer service. They have a favorable impression of your brand already so it won’t be hard to earn more loyalty.

3. The rewards scheme loyal customer

This type of customer is loyal to your rewards scheme rather than your products or brand. They will be loyal to you as long as you continue to offer benefits, discounts and other rewards that come with being part of your rewards scheme.

Customers like these are motivated by the rewards they can get and would leave your business if you stopped offering a loyalty program. They are in it for what they can get for free.

4. The contented customer

This type of customer is happy with your products or services and doesn’t have anything to criticize. They like your brand and they will continue to buy from you – as long as something better doesn’t come along.

Contented customers are only loyal to your service as long as they haven’t found a superior deal. These fickle customers are only temporarily loyal and are easily lured away by your competitors.

5. The passively loyal customer

Next we have the passively loyal customer, who only stays with your brand because they lack the initiative to find something better. They don’t particularly like your brand or your product or service, but they haven’t found an alternative because that would be too much effort.

This type of customer suffers from inertia. He or she won’t be won over by better deals or new products, since they simply do not care enough about your brand.

6. The actively loyal customer

The actively loyal customer is the one who is honestly devoted to your products, services and brand. They regularly buy from you, and represent a significant portion of your business’s profits.

These are the type of customers that are so happy with their experiences that they tell their friends, attracting more customers with word-of-mouth referrals. They happily write positive reviews about your company and talk about you on social media.

They can’t be tempted away by your competitors and they don’t shop around for better deals. These customers are overjoyed with your service and take every opportunity they can to buy from you.

How to measure customer loyalty

There are several customer service metrics you can use to measure customer loyalty, the best of which is Net Promoter Score. NPS simply asks the customer one question: how likely are you to recommend our business?

The answers to the NPS are given on a scale of one to ten.

• 9-10 is a promoter – this means customers are likely to recommend you to family and friends, and purchase from you again. These are your best customers.
• 7-8 is a passive – someone who is satisfied with your product or service but wouldn’t recommend you. They could be lured away by your competitors.
• 0-6 is a detractor – these customers are dissatisfied with your brand and would actively warn others against buying from you. It’s best to follow up with these customers to find out why their experience was so negative.

Calculating your NPS scores involves subtracting the percentage of your detractors from the percentage of your promoters. NPS represents the customer’s overall perception of your brand, rather than simply the quality of your products and services.

How to keep customers loyal

Provide a customer loyalty program

Providing tangible rewards to customers who are loyal to your brand is a solid way forward. If you implement a customer loyalty program you can give customers exclusive benefits when they shop with you. Customer loyalty programs keep customers coming back for more and prevents them from being lured away by competitors.

52% of customers will join the loyalty program of a brand they make frequent purchases from. You can reward customers in the form of points, discounts, free products, or anything else that makes sense for your brand.

The best customer loyalty programs encourage customers to shop more with your brand to earn exclusive benefits. The deals you offer have to valuable enough to motivate customers to use your loyalty program.

Deliver a high standard of products

55% of customers are loyal to a brand because they love the products. While customer experience is becoming more and more important, poor product quality is the top reason why a brand would lose a loyal customer.

Take pains to make sure you offer products of the highest standard possible, that actually deliver on the promises that you make. Try to outdo your competitors when it comes to quality of product.

Never stop improving, and keep iterating on your products to make them the best they can be.

Offer top notch customer service

93% of customers are likely to make repeat purchases with companies who offer excellent customer service. That means when customers are getting in touch with you about problems or issues, you should strive to make the experience as positive as possible.

To deliver great service, you need to hire skilled agents who can treat your customers with empathy and integrity. You should have robust analytics in place to measure how your agents are performing, and keep on top of customer support tickets.

When your customers contact you, they should be treated like royalty. Customer service is an important driver in customer retention and generating feelings of loyalty in your customers.

Communicate regularly with your customers

Don’t let your customers think you’ve forgotten about them. Regularly communicate with your customers to keep your brand at the top of their mind, and carefully consider what channels would suit your customers.

All communications with customers should be personalized, tailored to the needs of the individual. You could communicate with customers based on certain milestones that they take with regards to your company – for example, when they first sign up for your customer loyalty program.

Communication is, of course, a two-way street. Customers should be given the opportunity to engage with the brand, and the brand should always respond to any issues, questions, or complaints.

Final remarks

Out of the six types of customer loyalty, only one is genuinely loyal – the actively loyal customer. They can be relied on to keep purchasing from your brand, recommend your products and services to others, and give positive reviews.

It’s important to invest in your loyal customers through loyalty programs, top quality products, outstanding customer service, and regular communications. Not only is it cheaper to retain more customers in the long-term, it’s also easier to sell to them.

Loyal customers should be treated like the royalty they are. Only then will you earn even more loyalty and the cycle repeats itself.

Customers who keep coming back to your company.

It’s every business’s dream to have loyal, happy customers that continue returning for repeat purchases and are highly satisfied with your brand.

Sure, you can grow your business by acquiring new customers, but why not invest more in your existing customers who have already proven loyal to your brand?

Loyal customers spend 67% more with businesses than new customers. Loyal and repeat customers are simply worth more to your business and are a key driver of revenue.

What is customer loyalty?

Customer loyalty is more than having a simple loyalty program in place. It’s the customer’s readiness to return to a company and engage in repeat business. This loyalty is usually generated as a result of outstanding and memorable experiences they have with the business.

Loyalty is a sign of a customer’s long-term investment in the brand. They are not one-time shoppers, but repeat purchasers who consider themselves to have a relationship with the company.

The importance of customer loyalty

Customer loyalty is important for a number of reasons.

More frequent purchases

60% of loyal customers will purchase more frequently from their preferred companies. The bottom line is, loyal customers will spend more with your brand. It stands to reason that if they make one purchase with you, they’re likely to make more.

Loyal customers don’t care if you have the cheapest products. If they like your brand, they’ll want to keep spending money with you. 93% of customers are likely to make repeat purchases with companies who offer excellent customer service.

It’s cheaper

It costs five times more to attract a new customer than it does to keep an existing one. Retaining loyal customers just makes good business sense. Not only is it cheaper to retain customers than to acquire customers, but it’s also easier. If a customer has bought from you once, they are much more likely to buy from you again. It’s much harder to convince a brand new customer to take a chance with your business.

More word-of-mouth referrals

If your loyal customers are happy enough they might consider recommending you to friends and family. Word-of-mouth referrals are the most powerful form of marketing and 88% of people had the highest form of trust in a brand when a friend or family member recommended it. 

Word-of-mouth marketing costs nothing and can help you attract new customers who are much more receptive to your business. If a brand is recommended by a friend or family member this means you’ve already managed to win at least one person’s trust.

Provides genuine opinions

Loyal customers are more open to giving you genuine opinions on your products and services. They’ve been using your products for a long time and are likely to have detailed ideas on what can be improved. New customers are very unlikely to give feedback – they’ll probably just try your product and move on if they don’t like it.

Only one out of 26 customers is likely to bring up their complaints, while the rest will just leave without saying a word. Your long-term loyal customers are a vital source of feedback that can help you solve problems with your service that you weren’t aware of.

Protects you from competitors

When you have customer loyalty, you don’t have to keep lowering your prices to keep pace with your competitors. Customers will naturally buy from you because they feel a sense of commitment to your brand, and understand that paying more gets them great service.

37% of customers considered themselves to be loyal to a company after at least five purchases. It takes quite a while to earn a loyal customer but once you do it’s totally worth it.

6 types of customer loyalty

Believe it or not, there are several types of loyal customers out there.

1. The value loyal customer

There are some customers out there who are loyal to a brand because it is offering the best prices. For these customers, it’s not about quality of service or any other factor. They are loyal to you simply because you have the cheapest products and offer the best value for money.

As soon as they find a better deal out there, they will be gone.

Keeping prices low is the key to retaining this type of loyal customer. You have to decide whether you want to compete based on price, and whether this kind of customer is worth it.

2. The opportunist loyal customer

This type of customer is loyal to your brand because it suits them. Buying from you offers the most favorable experience, whether that’s because your business is in the best location for them, or simply because they have their payment details saved on your system.

Opportunist customers don’t mind paying more for convenience. For them, it’s all about choosing the easiest option, and as long as your business represents that, they will be loyal.

This customer type could be tipped over into being genuinely loyal by small improvements to the customer experience and customer service. They have a favorable impression of your brand already so it won’t be hard to earn more loyalty.

3. The rewards scheme loyal customer

This type of customer is loyal to your rewards scheme rather than your products or brand. They will be loyal to you as long as you continue to offer benefits, discounts and other rewards that come with being part of your rewards scheme.

Customers like these are motivated by the rewards they can get and would leave your business if you stopped offering a loyalty program. They are in it for what they can get for free.

4. The contented customer

This type of customer is happy with your products or services and doesn’t have anything to criticize. They like your brand and they will continue to buy from you – as long as something better doesn’t come along.

Contented customers are only loyal to your service as long as they haven’t found a superior deal. These fickle customers are only temporarily loyal and are easily lured away by your competitors.

5. The passively loyal customer

Next we have the passively loyal customer, who only stays with your brand because they lack the initiative to find something better. They don’t particularly like your brand or your product or service, but they haven’t found an alternative because that would be too much effort.

This type of customer suffers from inertia. He or she won’t be won over by better deals or new products, since they simply do not care enough about your brand.

6. The actively loyal customer

The actively loyal customer is the one who is honestly devoted to your products, services and brand. They regularly buy from you, and represent a significant portion of your business’s profits.

These are the type of customers that are so happy with their experiences that they tell their friends, attracting more customers with word-of-mouth referrals. They happily write positive reviews about your company and talk about you on social media.

They can’t be tempted away by your competitors and they don’t shop around for better deals. These customers are overjoyed with your service and take every opportunity they can to buy from you.

How to measure customer loyalty

There are several metrics you can use to measure customer loyalty, the best of which is Net Promoter Score. NPS simply asks the customer one question: how likely are you to recommend our business?

The answers to the NPS are given on a scale of one to ten.

• 9-10 is a promoter – this means customers are likely to recommend you to family and friends, and purchase from you again. These are your best customers.
• 7-8 is a passive – someone who is satisfied with your product or service but wouldn’t recommend you. They could be lured away by your competitors.
• 0-6 is a detractor – these customers are dissatisfied with your brand and would actively warn others against buying from you. It’s best to follow up with these customers to find out why their experience was so negative.

Calculating your NPS scores involves subtracting the percentage of your detractors from the percentage of your promoters. NPS represents the customer’s overall perception of your brand, rather than simply the quality of your products and services.

How to keep customers loyal

Deliver a high standard of products

55% of customers are loyal to a brand because they love the products. While customer experience is becoming more and more important, poor product quality is the top reason why a brand would lose a loyal customer.

Take pains to make sure you offer products of the highest standard possible, that actually deliver on the promises that you make. Try to outdo your competitors when it comes to quality of product.

Never stop improving, and keep iterating on your products to make them the best they can be.

Offer top notch customer service

93% of customers are likely to make repeat purchases with companies who offer excellent customer service. That means when customers are getting in touch with you about problems or issues, you should strive to make the experience as positive as possible.

To deliver great service, you need to hire skilled agents who can treat your customers with empathy and integrity. You should have robust analytics in place to measure how your agents are performing, and keep on top of customer support tickets.

When your customers contact you, they should be treated like royalty. Customer service is an important driver in generating feelings of loyalty in your customers.

Communicate regularly with your customers

Don’t let your customers think you’ve forgotten about them. Regularly communicate with your customers to keep your brand at the top of their mind, and carefully consider what channels would suit your customers.

All communications with customers should be personalized, tailored to the needs of the individual. You could communicate with customers based on certain milestones that they take with regards to your company – for example, when they first sign up for your rewards scheme.

Communication is, of course, a two-way street. Customers should be given the opportunity to engage with the brand, and the brand should always respond to any issues, questions, or complaints.

Final remarks

Out of the six types of customer loyalty, only one is genuinely loyal – the actively loyal customer. They can be relied on to keep purchasing from your brand, recommend your products and services to others, and give positive reviews.

It’s important to invest in your loyal customers through loyalty programs, top quality products, outstanding customer service, and regular communications. Not only is it cheaper to retain more customers in the long-term, it’s also easier to sell to them.

Loyal customers should be treated like the royalty they are. Only then will you earn even more loyalty and the cycle repeats itself.