Many companies focus more on getting new customers than retaining old ones. If your business is one of those, you should rethink your strategy. Remember, it's five times more costly to get a new customer than retain an existing one. What's more? Companies that prioritize customer service grow twice as fast as their competitors. Their revenues are also usually 4-8% above the market average.

The difference between these businesses and yours could be their high client loyalty – a factor that matters a lot. But how do you earn loyal customers? In this article, we'll help you with answers. And we'll also give you a few customer loyalty strategies to nurture customers.

What is Customer Loyalty?

Customer loyalty definition. Customer loyalty means that a customer will keep choosing your product or services instead of turning to your competitors. This stage comes after people have developed an emotional tie with your brand, which may happen through consistent positive interactions or a stunning first impression.

Today, many businesses have discovered the importance of customer loyalty and are taking active steps to cultivate it. Loyal customers can grow your market by recommending your company to their friends and family.

However, that said, what are the ways to measure customer loyalty? And what are the ways to increase customer loyalty? Read on to learn that.

Read about Customer Loyalty and Direct Mail

How to Measure Customer Loyalty?

Consumer loyalty is not tangible, so calculating it is tricky. However, here are a few metrics you can monitor.

Repeat Purchase Rate (RPR)

RPR is a percentage of clients that have returned to your company for multiple purchases. It would seem like this is the perfect measure of buyer loyalty, but it isn't. Why?

A repeat customer is not necessarily a loyal one, though it is easier to nurture loyalty in them.

So how do you calculate RPR? You divide the number of repeat customers you've made within a given time frame by the total number of customers in that period.

Upsell Ratio

Here, you divide the number of clients who purchased more than one product type by those who bought only one. This measurement is based on the fact that loyal customers will buy more because they trust you.

The purchase of a diversity of goods from one brand indicates higher loyalty.

Customer Lifetime Value (CLV)

CLV reveals how much you can expect to gain from your relationship with a client. A high CLV will indicate high loyalty from your customers.

CLV is calculated by multiplying the average sale value by the average frequency of sales. You then multiply the result by the average customer retention period. Usually, these calculations are done using automated tools.

Net Promoter Score

This tool helps you measure your customer satisfaction with a simple question. It asks how likely people are to recommend your services to friends.

The survey group has to choose on a scale of zero to ten. Promoters of your brand will select 9-10, and detractors will pick from 0-6. You get your NPS by subtracting the percentage of detractors from the promoters. A higher value shows a good NPS.

Customer Loyalty Index (CLI)

This survey combines NPS, RPR, and upsell ratio by asking clients three questions.

  • How likely are you to recommend our products to friends?
  • How likely are you to buy from us again?
  • How likely are you to try our other products?

The customers answer on a scale of 1-6, and the average of these three scores will give your CLI.

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How to Build Customer Loyalty? 6 Ways

Many businesses are learning ways to increase the loyalty of their clients, so you will have to compete. Here are a few customer loyalty strategies you can implement in your company.

  1. Provide Better Customer Service

Customer service quality is one of the leading customer loyalty factors. Over 93% of customers prefer brands that score high in this area. Work hard to give your customers the best experience they can find.

  1. Get Personal With Your Customers

Your clients want you to treat them as more than mere statistics. Make them feel special by remembering details such as their birthdays and hobbies. Respond to their positive and negative online reviews, send personalized messages, and have gentle customer care services.

Read about the Importance of Personalization in Marketing

  1. Ask For Feedback

Getting customer feedback will enable you to know what people think. It gives you the chance to rectify issues that may push your customers away. Your handling of the criticism is no less critical. When you manage negative comments well, it inspires your customers to stick around.

  1. Create A Reward Program

Reward your customers for their support. However, for maximum engagement in your reward programs, make the incentives worthwhile. Your customers don't want to struggle for points only to win peanuts at the end.

  1. Humanize Your Brand

Customers connect more with brands they can relate to. Start by engaging with your clients on social media. Also, produce visual content of happenings behind the scenes in your business. It can include pictures or videos of a company with employees having fun.

Your business will become more than a company to your customers. You will be a group of individuals with passions and dreams.

6. Use automated customer communications

Get automated software to respond to customers and instantly send them the necessary communications. Inkit is one of the options. The platform combines tools for document rendering and automated direct mailing campaigns. Using it, you can send automated messages based on real-time triggers, enhancing customer satisfaction.

Now that you know ways to build customer loyalty, it's time to learn why this is essential.

Why is Customer Loyalty Important in a Business?

If you have been asking why is loyalty important in a business, here are some reasons.

Customer Loyalty Minimizes Advertising Cost

Loyal consumers are bound to tell their friends about your services. This grows your customer base without spending a lot of money on advertising. After all, most people prefer referrals from friends and customer reviews.

Reduces Service Cost

Loyal consumers are already familiar with your company. That means you don't have to guide them every step of the way. Sometimes, they'll even help others (new customers). In communities and forums, older customers help new ones find their way around. That saves cost on your end.

Increases Sales Volume

Your loyal customers already trust you, so they won't hesitate to buy again from you. It means that your upsell ratio and repeat purchase rate will increase. You will get more sales without needing new customers.

Improves Brand Image

A brand image is difficult and costly to build. However, loyal clients can help without any cost on your part. When your business has many loyal customers, they will speak well about your brand. This positive publicity improves your brand image.

Allows Honest Customer Feedback

Loyal customers are likely to give honest feedback. They already love your brand, so they will only want you to grow. This feedback helps you improve your customer experience to get more loyal customers.


Building loyalty starts by knowing how to build customer relationships. It is a steady process that requires time to create trust. You will need to go a long way in improving customer experience to make your customers loyal. Get personal with them, humanize your brand,  provide high-class customer service and implement several things mentioned in this blog.

Most importantly, you will need reliable customer reach automation software. We recommend using Inkit as a universal solution for offline and online communications. This tool will allow you to always stay in touch with people to nurture your relationships.

Start using Inkit for free now to see how it works.

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