Customer Loyalty
What is Customer Loyalty?
Customer loyalty refers to a customer's ongoing commitment to purchase from or engage with a specific brand over time, often due to positive experiences, trust, and perceived value. Loyal customers consistently choose the same company despite alternative options, contributing to repeat business and long-term success. Companies foster loyalty through personalized experiences, exceptional customer service, and rewards programs, ultimately building solid and lasting relationships that benefit both the brand and the customer.
The Basic Idea
Have you ever found yourself shopping on ‘autopilot,’ returning to the same store repeatedly, even when it’s slightly out of your way or priced a bit higher, simply because it feels familiar? Have you ever raved about a specific product to your friends? like a brand of chocolate peanut butter that is ‘the best thing they’ll ever try,’ touting all the benefits of it while thinking to yourself, ‘I should be getting paid to advertise like this!’ Most of us have at least one favorite store or product to which we are loyal customers.
Acquiring new customers is essential for business growth, but retaining customers is even more valuable. While the age-old saying states that it costs five times more to attract a new customer than to keep existing ones, today's research is a little more nuanced. Regardless of the exact number, to ensure brand success, focusing on keeping your current customers happy can actually help grow your business.1
Customer loyalty is more than just repeat business; it’s about building a lasting relationship where customers feel a connection with the brand, trust its products or services, and are willing to advocate for it (aka social proof, or buying that specific peanut butter and forcing all your family and friends to try it). True customer loyalty is emotional and attitudinal, not just transactional. Across industries, different loyalty programs and incentives have been created to reign in customer loyalty's power.
Loyal customers, they don't just come back, they don't simply recommend you, they insist that their friends do business with you.
– Chip R. Bell, American author and consultant in customer loyalty
About the Author
Annika Steele
Annika completed her Masters at the London School of Economics in an interdisciplinary program combining behavioral science, behavioral economics, social psychology, and sustainability. Professionally, she’s applied data-driven insights in project management, consulting, data analytics, and policy proposal. Passionate about the power of psychology to influence an array of social systems, her research has looked at reproductive health, animal welfare, and perfectionism in female distance runners.
