Resource Page: Customer Loyalty

Customer Loyalty Ladder
The Pathway from Potential Buyer to Brand Advocate

What is Customer Loyalty & Why is it Important?

Customer loyalty is a customer’s consistent preference and allegiance towards a particular brand, product, or service, often demonstrated by their repetitive purchases, positive engagement, and advocacy. It signifies a strong and enduring emotional connection between the customer and the brand, usually built on positive experiences, trust, satisfaction, and perceived value.

Loyal customers are more likely to continue buying from a specific brand, even in the face of competitive offers, and are often proactive in recommending the brand to others. This long-term commitment not only contributes to the brand’s sustained revenue but also enhances its reputation and market position.

Customer loyalty is more than just a repeat purchase or a routine interaction between a customer and a business. It embodies a profound connection, a sense of allegiance that a customer holds towards a brand. In essence, customer loyalty reflects a customer’s commitment and emotional investment in a brand.

Understanding customer loyalty is pivotal for any business striving for success and sustainability. It goes beyond mere financial transactions, forming the foundation of a brand’s long-term viability. Loyal customers not only contribute significantly to a company’s revenue but also act as brand advocates, amplifying the brand’s reach and reputation. The importance of customer loyalty cannot be overstated; it directly impacts a business’s profitability, growth, and competitive edge.

What are the Benefits of Customer Loyalty?

Customer loyalty signifies a customer’s repeated choice of a specific brand, leading to a range of substantial benefits for brands. Beyond increasing revenue and ensuring steady growth, customer loyalty builds trust, boosts advocacy, and paves the way for invaluable customer insights. Here are some examples of the benefits of customer loyalty:

Enhanced Profitability and Sustainable Growth:

Customer loyalty is a linchpin for business profitability. Loyal customers tend to spend more and make repeat purchases, establishing a predictable revenue stream. This steady revenue, combined with cost savings from reduced marketing for acquiring new customers, fuels sustainable growth and contributes significantly to the bottom line.

Boosted Brand Advocacy and Trust:

Loyal customers often become brand advocates, sharing positive experiences and recommendations. Their advocacy not only attracts new customers but also builds trust and credibility in the market. This cycle of advocacy amplifies brand reach and fosters a community of devoted customers, further solidifying brand loyalty.

Higher Customer Lifetime Value (CLV):

Loyal customers exhibit higher CLV due to their continued purchases and increased spending over time. By nurturing long-term relationships, businesses maximise the value derived from each customer, resulting in a substantial and consistent revenue flow.

Cost-Effective Marketing and Reduced Churn:

Retaining existing customers is more cost-effective than acquiring new ones. Loyal customers require less marketing effort and expenditure. Moreover, they are less likely to switch to competitors, reducing customer churn rates and the associated costs of customer replacement.

Invaluable Customer Insights and Feedback:

Loyal customers provide essential feedback and insights into their preferences, needs, and expectations. This information is invaluable for businesses to refine products, services, and marketing strategies, ensuring they stay aligned with customer desires and preferences.

Resilience in Market Downturns and Competitive Advantage:

Loyal customers tend to remain loyal even during economic downturns, providing a buffer against market volatility. Moreover, their allegiance gives a business a competitive edge, as they are more likely to choose the brand over competitors, even if presented with tempting alternatives.

Efficient Product Development and Expansion:

Loyal customers can serve as a testbed for new products or services. Their feedback helps in refining offerings, minimising risks, and ensuring successful product launches. Additionally, loyal customers often eagerly embrace new offerings, aiding in business expansion and diversification.

Customer Loyalty Strategies

What are Customer Loyalty Strategies?

Customer loyalty strategies are a set of planned approaches and actions adopted by businesses to establish, maintain, and enhance the loyalty of their customer base. These strategies aim to encourage repeat purchases, boost customer retention, and promote advocacy for the brand

Customer Loyalty Strategy Examples

Loyalty Programmes:

Loyalty programmes are structured initiatives where customers earn points for purchases, which can be redeemed for rewards like discounts or free products. They incentivize customers to return, boosting repeat business and fostering a sense of appreciation for their loyalty.

Personalised Discounts and Offers:

Tailoring discounts and offers to individual customer preferences based on their purchasing behaviour. This strategy adds a personal touch to the shopping experience, making customers feel valued and understood.

Exceptional Customer Service:

Delivering outstanding customer service involves going the extra mile to assist customers, resolve issues, and ensure their satisfaction. Exceptional service builds trust, loyalty, and encourages customers to stick with the brand.

Feedback and Surveys:

Actively seeking feedback from customers through surveys to understand their opinions, preferences, and concerns. This strategy provides invaluable insights, enabling businesses to make informed decisions and tailor their offerings to meet customer needs.

Exclusive Access and Previews:

Granting loyal customers exclusive access to new product launches, sales, or events before the general public. This makes customers feel special and appreciated, encouraging them to stay engaged and make repeat purchases.

Referral Programmes:

Encouraging customers to refer others to the business by offering incentives like discounts or rewards. Referral programmes harness the power of satisfied customers to expand the customer base while rewarding the advocates.

Cross-selling and Upselling:

Suggesting additional or upgraded products to customers based on their current purchases, thereby increasing their overall spend. This strategy maximises revenue per customer and enhances their overall shopping experience.

VIP Tiers or Membership Programmes:

Establishing membership levels with varying benefits to incentivise customers to progress through the tiers. This motivates increased engagement and spending, driving customers to unlock more exclusive rewards.

Anniversary Rewards:

Celebrating the customer’s relationship with the brand by offering special treats, discounts, or bonuses on the anniversary of their membership or initial purchase. Anniversary rewards demonstrate appreciation and strengthen the customer-brand bond.

Engaging Content and Community:

Providing informative content, organising events, or nurturing an online community where customers can interact and gain value. This strategy creates a sense of belonging and keeps customers engaged with the brand.

Surprise Gifts or Discounts:

Occasionally surprising customers with unexpected gifts, bonus points, or discounts, enhancing their overall experience. These unexpected gestures delight customers and leave a lasting positive impression.

How to Measure Customer Loyalty?

You need to measure customer loyalty in order to track your progress towards your business goals. In particular when those KPIs are linked to retention rates and other key metrics.

Keeping track of the sentiments your customer base feels towards your brand, ensures you gather insights from their feedback, and that allows you to make improvements accordingly.

There comes a point when a business must justify their loyalty programme. Yours will be no different. Without the means of tracking KPIs and key metrics there’s no way of discerning whether your loyalty programme is a sound investment or costly, ineffective liability.

How to Measure Customer Loyalty & Repeat Purchase Rate

There’s several ways to track a customer’s loyalty. You’ve got a Repeat Purchase Rate (RPR) to see how quickly a customer makes subsequent purchases after the first one. This lets you ascertain the regularity each customer makes purchases.

Net Promoter Score

Similarly, there’s the Net Promoter Score (NPS). Respondents answer a survey of how likely they would refer your business to others. Where they score on a scale of 0-10 places them into one of three categories: promoters, passive and detractors.

Customer Engagement Score

Customer Engagement Score (CES) helps you deduce how often customers interact with your brand and the duration of their session. Therefore, CES is broken down into conversion rate, pages visited per session and average session duration.

Additional metrics

In addition, there’s Customer Lifetime Value (CLV), Customer Churn Rate (CRR), Upsell Ration and Customer retention rates. All of which give you estimates of the value of customer loyalty, the effectiveness of your retention and engagement strategies, and the strength of your value propositions.

Metrics to track your Customer Loyalty Programme

As already mentioned, you need to justify the viability of your loyalty programme. There’s metrics you can use to judge whether your loyalty programme is performing as intended. These are Active Engagement Rate, Redemption Rate and Participation Rate. Click Learn More below for metric formulas.

Customer Loyalty Ladder

What is a Customer Loyalty Ladder?

A customer loyalty ladder is a conceptual framework that illustrates the various stages a customer typically progresses through in their relationship with a brand. At the base of the ladder are potential customers, followed by first-time buyers, occasional purchasers, repeat customers, loyal customers, and at the top, brand advocates.

As customers ascend this ladder, their level of engagement, frequency of purchases, and depth of brand connection increase. The goal is to nurture individuals through these stages, providing exceptional experiences at each level to encourage their ascent.

By understanding and leveraging this ladder, brands can personalise strategies to enhance customer engagement and ultimately drive brand advocacy, nurturing long-term, mutually beneficial relationships.

Customer Loyalty Ladder Stages


Someone who refers your brand via word-of-mouth, online reviews and referral programmes, to family, friends, strangers and followers. 

Repeat Buyer:

A loyal customer who often engages with your brand by repeatedly purchasing your products or services and are more open to upsells & cross sells.  

First Time Buyer:

A person who has made their first purchase with you but would still consider your competitors if they offer something better. 


A possible customer who is in the process of deciding whether to buy from you or your competitors.


Someone who is on the lookout for a product or service and has engaged with your brand.

Customer Loyalty Ladder

Drivers of Customer Loyalty: What are the Factors that Significantly Influence Loyalty?

Understanding and leveraging these drivers can significantly enhance your brand’s ability to cultivate and maintain a loyal customer base, resulting in lasting relationships and sustainable business growth. A deeper dive into the drivers of customer can be found in this article but here is a summary of some key points.

Exceptional Customer Service:

Exceptional customer service stands as a primary driver of customer loyalty. When customers receive personalised and attentive service, addressing their needs and concerns promptly and efficiently, it creates a sense of appreciation and trust. These positive interactions leave a lasting impression, prompting customers to remain loyal and dedicated to a brand that values their satisfaction.

Quality Products and Services:

The fundamental driver of customer loyalty is the quality of products or services a business offers. Consistently delivering products that meet or exceed customer expectations establishes a sense of reliability and trust. When customers receive value for their money and consistently high-quality offerings, they’re more likely to stay loyal and advocate for the brand.

Building Emotional Connections:

Emotional connections between a brand and its customers play a vital role in driving customer loyalty. Brands that can evoke positive emotions, resonate with their customers’ values, and create a sense of belonging tend to create strong loyalty. Customers become emotionally invested in the brand, forming a bond that transcends transactions and results in long-term, loyal relationships.

Transparency and Trustworthiness:

Transparency and trustworthiness are essential pillars of customer loyalty. Customers appreciate honesty and openness in their interactions with a brand. Brands that are transparent about their practices, pricing, and policies build trust. When customers feel secure and believe in the integrity of a brand, they are more likely to remain loyal and engage in long-term relationships.

Rewards and Incentives:

Effective loyalty programmes and incentives are powerful drivers of customer loyalty. Customers appreciate being recognised and rewarded for their loyalty, whether through discounts, exclusive offers, or loyalty points. Such initiatives create a sense of value and appreciation, encouraging customers to continue their engagement and purchases with the brand.

Effortless Customer Experience:

A seamless and effortless customer experience significantly influences loyalty. Customers value simplicity, ease of use, and efficiency in their interactions with a brand. When businesses prioritise making the customer journey smooth and convenient, it minimises frustration and encourages repeat business, ultimately nurturing customer loyalty.

Different Types of Loyalty

There are different types of customer loyalty. These include emotional, advocacy, transactional, social, engagement and behavioural loyalty. Most customers display or feel a combination of two or more of these loyalty types. The ideal situation is in fact to make them feel loyal in every way.

Emotional Loyalty:

Customers develop a deep, emotional attachment to the brand, often based on shared values, trust, and a sense of belonging. These loyal customers remain committed due to the positive feelings and connections they associate with the brand.

Advocacy Loyalty:

Advocates are enthusiastic customers who actively promote and recommend the brand to others. Their loyalty goes beyond personal satisfaction, as they voluntarily endorse the brand, contributing to its positive reputation.

Transactional Loyalty:

Customers exhibit loyalty by making repeat purchases, driven by factors like convenience, product quality, or pricing. Although rooted in transactions, this type signifies a level of satisfaction that leads to continued business.

Social Loyalty:

Socially loyal customers are influenced by their social circles or online communities. Their loyalty is shaped by recommendations, reviews, and discussions within their network, impacting their perception and choices regarding a brand.

Engagement Loyalty:

Engaged customers actively participate in brand-related activities, such as contests, surveys, or events. Their loyalty is fostered through involvement, interaction, and a sense of being valued by the brand.

Behavioural Loyalty:

Behavioural loyalty is reflected in consistent actions, such as frequent purchases, long-term commitments, or regular engagement with the brand’s offerings. These customers exhibit loyalty through their continued and predictable behaviours.

This is a quick summary, however, for a more detailed analysis, please visit our different types of loyalty blog


Rewarding Customer Loyalty

Rewarding customer loyalty is a fundamental aspect of developing lasting relationships and ensuring customer retention. Brands can employ various strategies to show appreciation for their customers’ loyalty.

Firstly, loyalty programmes play a pivotal role, offering points, discounts, or exclusive access to products or services. These programmes not only incentivise repeat purchases and provide additional value, but also enhance the overall customer experience.

Loyalty and Reward Programme Guide (2)

Additionally, personalised offers and tailored discounts based on a customer’s purchasing history or preferences demonstrate attentiveness and make customers feel valued. Engaging with customers on special occasions, like birthdays or anniversaries, by offering personalised messages or gifts, goes a long way in building an emotional connection and reinforcing loyalty. In essence, recognising and appreciating customer loyalty through meaningful rewards and personalised gestures not only encourages repeat business but also creates brand advocates who are likely to spread positive word-of-mouth.

Leveraging AI in Customer Loyalty

AI transforms customer loyalty strategies by personalising offerings, optimising product or service recommendations, automating engagement, and tailoring communications to each customer’s preferences. This not only develops stronger customer loyalty but also drives revenue growth for businesses through increased customer retention and satisfaction.

AI-powered recommendation systems suggest relevant products or services to customers, increasing their likelihood of making purchases. By understanding purchasing patterns and preferences, AI can provide targeted offers, discounts, or rewards that resonate with each customer. This personalised approach encourages repeat business and strengthens loyalty, as customers feel understood and valued.

Additionally, AI automates communication and engagement with customers, providing timely and relevant information through various channels such as chatbots, emails, or social media. These automated interactions simulate human-like responses, enhancing customer service and maintaining a strong connection between the business and its customers. AI’s ability to analyse sentiment and feedback also allows for sentiment-based adjustments to loyalty programs, ensuring they align with customers’ evolving expectations and sentiments.

Artificial intelligence (AI) is also revolutionising customer loyalty programmes by enhancing personalisation, engagement, serving hyper-relevant rewards and incentives based on buyer behaviours, and the overall customer experience. AI algorithms can analyse vast amounts of customer data to derive insights, segment customers based on preferences and predict future actions. This allows businesses to personalise loyalty programmes and incentives to individual customers, boosting their engagement and satisfaction.

Sustainability and Customer Loyalty

Sustainability is increasingly recognised as a critical factor in establishing and maintaining customer loyalty. Customers are becoming more environmentally and socially conscious, seeking products and services from brands that align with their values and demonstrate a commitment to sustainable practices. Sustainable practices can bring several benefits to a business:

Enhanced Reputation

When businesses integrate sustainability into their operations, they not only contribute positively to the planet and society but also enhance their reputation and appeal to a growing segment of environmentally aware consumers.

Likelihood of Increased Loyalty

By considering the impact of their actions on the environment, communities, and future generations, these businesses showcase a sense of responsibility and accountability that resonates with consumers. Customers are more likely to develop loyalty and trust towards organisations that take concrete steps to reduce their carbon footprint, minimise waste, use renewable resources, and support ethical labour practices.

Development of Your USP

Incorporating sustainability into the customer experience can set a company apart from competitors and create a unique selling proposition. From eco-friendly packaging to energy-efficient processes, sustainable practices can demonstrate a brand’s dedication to making a positive difference.

Enhanced Value Proposition – Improved Customer Acquisition

Customers who feel aligned with a brand’s sustainability initiatives are more inclined to become loyal advocates, spreading the word and influencing others to support the company based on its ethical and sustainable approach. This enhanced value proposition can attract and retain customers who appreciate both the environmental and economic benefits of choosing a sustainable brand.

In summary, sustainability not only aligns with ethical considerations and global responsibility but also serves as a powerful tool for building lasting customer loyalty and ensuring business success in the long run.

Customer Loyalty Trends

Customer loyalty is far from a new concept. Businesses across the world try to nurture it in many different ways. Some of these tried and tested methods have grown stale over the years.

Macro-economic challenges and external circumstances outside of our control have shaped the lives, needs, and expectations of our customers. To keep nurturing their loyalty, businesses need to keep innovating their rewards programme. Here are a number of customer loyalty trends that we’ve identified to keep an eye out for in 2024.


Always-on rewards

As consumers, we’ve grown accustomed to a world of convenience. Everything we need is at our fingertips and more often than not delivered at the door the next day. This of course is thanks to advancements in technology and global infrastructures.

Loyalty has gone the same way. Always-on rewards offer instant, ongoing rewards, regardless of how much a customer spends.

Brand partnerships

Businesses are also looking to form alliances with other brands in order to increase customer loyalty. More consumers than ever desire unique, co-created value.

In response, brands are pooling their resources, expertise, and even sharing their customer bases. In doing so they broaden their range of offerings, build relevancy, and increase retention and engagement.

Personalised experiences

Many studies, surveys and reports show that consumers want more personalisation in their shopping experiences. Brands that track customer needs, preferences and behaviours, position themselves as the brand that sees their customers as unique individuals.

Customer satisfaction and delight are guaranteed when communication is tailored to the individual, every interaction is personalised to their preferences, and rewards are relevant to their buying habits.

Tiered loyalty programmes

Perfect if you want to increase customer loyalty by appealing to our natural desire to compete with others. Tiered loyalty programmes are a great way of incentivising upsells. Social competition drives customers to prioritise your brand, products or services over others.

In addition, tiered loyalty programmes present the perfect opportunity for brands to segment their customer base. Different customer categories can be identified, allowing you to optimise allocation of resources, effort and time for each segment.


Engagement is necessary for long lasting loyalty. Gamification has proven to be one of the most effective methods of catching and keeping the attention of customers. For example, a study showed gamification increased trial usage and clicks to buy.

Gamification also offers you the chance to fully brand your loyalty programme and make it your own with unique games. With handheld gaming exploding in popularity over the last decade, it makes sense to incorporate gamified elements into mobile app-friendly rewards programmes.


AI applications are rolling out across industries. For customer loyalty, marketers and companies realise the potential AI has for transforming customer experience. The broad viability of AI applications also means it can assist with powering chatbots, helping to resolve queries and complaints in a quick, efficient and convenient manner.

Deep learning algorithms are also posed to help brands track customer data and deliver unrivalled personalised CX. Essentially the high level of assistance AI offers for marketers will free up thousands of man hours and resources.


A study by PicoNFT revealed that 37.4% of consumers say NFTs influence their engagement with brands and give them a reason to be loyal.  NFTs as rewards offer exceptional value as they are more like assets that can appreciate in monetary value.  What’s more, since they are truly one-of-a-kind, brands could build communities for their customer base in which NFTs are swapped and traded. Thereby building long term engagement and connection amongst community members.

Mobile Wallets

Mobile wallets are growing in popularity as the method to make purchases and transferring money. These highly secure, fast, convenient and seamless applications share many of the same traits as loyalty programmes.

Customers want to purchase your products and services without worrying about potential breaches to their sensitive financial information. Many wallets offer them this assurance.

Likewise, customers want the same assurances when redeeming rewards and gift vouchers. Which is why brands are improving the compatibility of their loyalty programmes with money wallets.

Sustainability & green loyalty

Customers want connection and deep meaningful relationships with the brand they love. In fact, establishing deep connections with customers is important for long lasting loyalty. Perhaps that’s more true today than it ever has been before. As more people are socially conscious and concerned about the environment.

Our values and principles mean a lot to us. Over 71% of the British public believe loyalty programmes should promote environmentally friendly behaviour. Recent data has already shown consumers abandoning brands that fail to align to their values.

In response, brands are re-assessing their brands on a holistic level. Even making sure their loyalty programmes align with consumer values.

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