It’s a term that gets thrown around a lot these days, but “customer loyalty” has never been more important. If you want to build a business that’s sustainable – not just a flash-in-the-pan success – you have to prioritize the long-term loyalty of your customers. 

The significance of customer loyalty

It’s easy to get caught up in sales and onboarding new customers that you forget about the importance of retaining them. However, at the end of the day, customer loyalty is arguably the most important metric to pay attention to. 

If loyalty is low, it means you’re spending a lot of resources acquiring people who aren’t going to stick around long enough to give you a reasonable return on investment. If loyalty is high, it frees you up to spend more time acquiring the right customers.

How to measure customer loyalty 

There are plenty of metrics you can use to measure customer loyalty, but customer lifetime value (CLV) is one of the most common. It’s a simple measurement that tells you how well you’re resonating with your audience and how much customers like the value you’re providing.

The basic formula for CLV is as follows:

CLV = Average Order Value X Purchase Frequency X Customer Lifespan

For example, let’s say a customer sticks around for two years (24 months) and they make a $20 purchase twice per month. You would calculate it as follows:

$20 X 2 X 24 = $960

To better understand how profitable a customer is, you can compare CLV to customer acquisition cost (CAC) by using a CLV:CAC ratio. If you’re spending $40 to acquire a customer, then this is a pretty good deal.

Once you understand CLV:CAC, the importance of customer loyalty becomes apparent. The difference between a customer who sticks around for six months ($240 CLV), two years ($960 CLV), and five years ($2,400) is massive, and cultivating loyalty is one of the keys to getting customers to stay with you for years to come.

5 valuable ways to increase customer loyalty

Now that you understand the significance of customer loyalty, here are a few helpful techniques to keep in your toolbox:

1. Track customer loyalty on a customer journey map

You can’t improve loyalty if you don’t know where customers stand. CLV is an important metric, but it’s also helpful to establish a customer journey map.

A customer journey map is a visual storyline that helps you understand each engagement a customer has with your brand (from the time they become aware of your business to the time they leave).

When you recognize these touchpoints, it empowers you to provide the right service at each stage. As a result, you’re better equipped to turn your business into a customer-centric brand and in turn, influence lasting customer loyalty. 

Take a look at a few onboarding template ideas for guidance on successful customer journey stages and vital CX program starting points.

2. Use feedback surveys to measure customer loyalty

To keep customers returning to your brand, you need to gather data about they actually feel about your product and services. 

One of the best ways to collect these insights and architect a detailed customer journey map is to gather feedback with customer survey templates.

Choose between six survey types (NPS, CSAT, CES, 5-Star, Smileys, and Thumbs), ask customers to elaborate with an open-ended follow-up question, and then close the loop with a thank you page and take action to address any negative responses. 

If you need more information to support your findings, add up to 10 multiple-choice or free-response Additional Questions to your survey. Use the detailed data to not only track feedback progress over time, but present critical loyalty findings to your teams through numerous reporting options

3. Show appreciation for your long-term customers

Good customer service isn’t enough. If you want loyalty, you have to show your customers that you appreciate them. And, thankfully, this can be as easy as acknowledging who they are and what they mean to you.

You’ll have to decide how to show appreciation in ways that are reflective of your brand’s personality. It could be social media contests and giveaways, handwritten thank you notes, free upgrades, company swag, or pre-sale notifications. It’s up to you to get creative and consider the most cost-effective ways to show customers you care.

FIGS, a direct-to-consumer medical apparel company, explains to Delighted what showing customer appreciation means to them:

One program we’re really excited about is our FIGS Love/Surprise and Delight program that we launched in Q1 of this year. We take the special conversations we have over the phone, email, text messages, chat, etc and find unique ways to follow up with a gift.

For example, if a customer lets us know (or we happen to find out) that they’ve started a new practice, we’ll send them a bottle of champagne or cider as a surprise. The FIGS Love program is an opportunity for us to thank them for all that they do, for all humans.”

– Michael Bair, VP of Customer Experience at FIGS

4. Bring existing customers together through social media

While your products and services will always stand on their own merit, you can set your brand apart from the competition and foster brand loyalty by cultivating a sense of community among your customers. When customers feel like they’re part of a community that’s bigger than them, they’re compelled to stick around. 

Thankfully, building brand-centric communities is easier than it’s ever been. Thanks to social media platforms, you can create concentrated groups that consist of your target audience and encourage people to interact with one another through strategic content creation and other forms of engagement. 

5. Use social proof to build customer loyalty

Let’s face it – the pull of subtle social proof is undeniable. You can utilize social proof to your advantage by integrating it into every part of the customer experience. This includes web design, email marketing, customer service conversations, packaging, and content. Options include:

  • Statistics and data points pulled from customer case studies
  • Endorsements from celebrities or well-known industry leaders
  • User reviews and ratings
  • “Wisdom of the crowd” (like McDonald’s famous “Over 99 Billion Served” sign)

You should never be afraid to boast, but the key to social proof is to use it naturally. Social proof should always complement the main focus, not take away from it.

Try Delighted for Free

Looking for powerful ways to collect feedback so that you can gather the actionable insights needed to improve the customer experience and optimize loyalty? 

Delighted is a proprietary, user-friendly platform that makes gathering customer feedback fast, easy, and effortless. Sign up for our experience management software now and survey 250 customers for free!