Measure Customer Loyalty


Measure customer loyalty

Connect with your customers. Gain their trust and retain their business. If they have a choice, make sure you are it.

  • Connecting with customers

    If you aren't exceeding your customers' expectations, you can bet they're looking for better alternatives. Surveys can help you understand what those expectations are. Use surveys to discover your customers' pain points. Help them overcome troubles they never knew they had. Invest in retention. All these might sound like an increase in your costs, but it costs a lot less to retain a customer than to acquire one.


    Customer loyalty is the cornerstone of repeat business. Loyal customers will always choose your brand over a competitor. They fervently extol the virtues of your products or services to their friends, bringing in a lot of new customers with little to no effort.


    The only way to build loyalty is to do right by them, and that means listening to them and meeting their needs.


  • Measuring customer loyalty

    Using retention/churn rates

    Your churn and retention rates can help you estimate customer loyalty from a numbers perspective. Churn rate is the rate at which your customers are leaving. If you had 100 customers at the start of a month and 15 of them cancel their subscription by the end, then your churn rate is 15% for the month.


    Your retention rate is the complement of your churn rate. In the above example, your retention rate is 85% (100%-15%). Higher retention rates imply higher loyalty among customers.


    However, a short term high retention can also be achieved by simply meeting customer expectations. A much more reliable way of measuring customer loyalty is customer satisfaction.


    Using customer satisfaction

    Use a Net Promoter Score (NPS) survey to measure your customers' satisfaction towards you, and indirectly measure loyalty. Your customers' answers to questions like, "How likely are you to recommend our company/product/service to a friend or colleague?" can be scored to indicate overall customer satisfaction. Higher ratings mean more loyalty.

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