The Ultimate Guide To Customer Loyalty

What is customer loyalty and how do you go about measuring and increasing it? We covere everything you need to know.
Published on: Nov 01, 2023
Last updated: Nov 02, 2023


  • Customer loyalty is crucial for businesses in various sectors, as it can significantly impact their success.
  • Customer loyalty is the long-term relationship a user or customer establishes with a brand based on the value they receive from its products or services.
  • Key metrics for measuring customer loyalty include the Net Promoter Score (NPS), engagement, retention rate, multiple product purchases, and the Customer Loyalty Index (CLI).
  • Customer loyalty is important for sustaining operations, fostering brand evangelism, increasing word-of-mouth referrals, boosting Customer Lifetime Value (CLV), and achieving a higher share of wallet.
  • To increase customer loyalty, companies should focus on great customer service, understanding their customers and their journey, creating products that address customer pain points, investing in customer success, starting a loyalty program, and building communities.
  • Customer loyalty programs aim to reward and incentivize customers to interact with a brand repeatedly.
  • Types of customer loyalty programs include point-based programs, tiered programs, paid programs, value-based programs, coalition programs, and game-based programs.
  • Writing a great loyalty survey involves understanding the survey's purpose, identifying the target audience, choosing the right survey format, designing clear and concise questions, creating a logical flow, optimizing survey length and timing, and incorporating feedback mechanisms.
  • Example survey questions for measuring customer loyalty include inquiring about the likelihood of recommending the service, the most valued product features, suggestions for improvement, and satisfaction with customer support.
  • Measuring and understanding customer loyalty is an ongoing process that requires a tailored approach and a focus on user behavior and feedback.

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For the SaaS, insurance, and finance sectors — and many others — customer loyalty can make or break a business.

Creating personalized experiences and offering top-notch service to loyal brand ambassadors who will talk about how rewarding their experience is with your company is vital to future growth. In fact, around 61% of consumers have cut ties with brands due to poor customer service. That’s why it’s so important that you do everything to win a customer’s loyalty and keep it.

What is customer loyalty?

Customer loyalty is the long-term relationship a user or customer cultivates with a particular brand. Consumers believe the solutions you offer provide more than enough value for the problems they solve. That is why they keep coming back to your brand for help and often suggest your products or services to other consumers.

Put simply, customer loyalty is that positive feeling consumers feel with a brand that keeps them coming back for more. You want your target audience to feel safe, respected, valued, and comfortable from the moment they see your logo to the experience they have with your offerings. In the SaaS world, these feelings lead to more renewals and consistent subscription upgrades.

How to measure customer loyalty

Some of the most common metrics used to measure customer loyalty include:

Net promoter score

The Net Promoter Score (NPS) is used to understand what drives customer loyalty. You calculate this by actively asking your target audience how likely they are to recommend your product or brand to other consumers. Subtract the percentage of detractors from proponents, and the resulting number is your NPS. The higher your NPS, the greater your customer loyalty.****


The goal with engagement is to find those metrics that tell you how often and how much your customers are interacting with your various touchpoints and services. You can track engagement through CTR (click-through rates), time spent on your website, and social interactions on popular social media platforms. For example, when you have a SaaS newsletter that has exceptional open and read rates, you have high engagement that is likely to lead to a loyal user base.

Retention rate

The average company can lose anywhere from 10-25% of its customers annually. That can be a frightening statistic in the SaaS industry, where high retention equals more subscriptions. Creating a more robust customer loyalty SaaS ecosystem means focusing on meeting expectations through streamlined, lightweight, and targeted services that directly address the pain points of customers, so they keep coming back. The goal is to reduce customer churn as much as possible.

Multiple product purchases

This is a straightforward customer loyalty metric. If they keep purchasing the products and services you offer, you know you have built loyalty by aligning your brand with their needs.

Customer loyalty index

Similar to NPS, the Customer Loyalty Index (CLI) uses customer surveys to find out how loyal consumers are to your brand. There are different ways to do this, but you’ll probably come across this formula: CLI = (Average Purchase Frequency X Average Purchase Amount) / Total Customers. The higher your CLI, the more loyal your customers are.

Why is customer loyalty so important?

The best answer to why you need customer loyalty is profit margins. A SaaS or financial service provider that doesn’t have loyal customers who return consistently cannot experience the revenue figures required to sustain operations or enjoy future growth.

Creates brand evangelists

You want loyal customers to keep repurchasing your subscriptions and services as well as report on what a great experience they had with your brand. Having evangelists who will sing your praises to friends, coworkers, and family members goes a long way to boosting organic market reach.

More word-of-mouth referrals

Positive experiences foster greater brand engagement. Loyal customers will spread the word about your services online and off. This leads to higher rates of reviews, social media engagement, and the growth you need.

Increases CLV and revenue

Customer Lifetime Value (CLV) is a great way to see how well your customers are feeling about your brand. This metric measures the total revenue a customer brings in throughout the course of their relationship with your company. With SaaS, you want a high CLV because it means you have consistent subscriptions and revenue streams.

Higher share of wallet

Think of this as Pepsi vs. Coca-Cola. If a customer spends more on Pepsi products, they have a higher share of wallet for that brand compared to Coca-Cola.

How to increase customer loyalty?

Unfortunately, there is no secret big red button that transforms cold leads into long-term brand relationships. You will need to use a number of techniques that all result in higher customer loyalty rates.

Great customer service

Around 73% of companies with above-average customer satisfaction perform better financially than competitors. And one of the biggest things that influences CSAT is how well your customer support team is solving customer inquiries. There are some best practices companies can employ to boost their service levels. From streamlining their ticket assignment and escalating procedures with a good helpdesk solution to using a company like Fullview for their technical support, cobrowsing, and session replay needs, investing in a good customer support setup is key to boosting customer loyalty.

Understanding your customers and their journey

Walk a mile in your customer’s shoes. Get to know what their pain points are and how you will solve them – all the way from the initial touchpoint to when they become advocates of your brand. Customer journey mapping helps shed light on this user experience, often highlighting areas where you can improve.

Create great products that address customer pain points

Striving to create the best product experiences starts with figuring out what’s working and what isn’t. Talking to your users in key and implementing their feedback can take average products to essential elements of a company’s day-to-day operations. If you make the lives of your customers easier by building the best products, you’ll naturally foster a sense of brand loyalty.

Invest in customer success

The best companies do more than solve problems – they anticipate them. You want to guide customers to make the best use of the products and services you offer to build a foundation for lasting loyalty and brand trust. Help them get to their ‘aha’ moment with your product and watch their appreciation for your company skyrocket.

Start a loyalty program

Over 70% of customers will recommend your brand and spend 12-18% more if you have a solid customer loyalty program, so it’s worth investing in one. We’ll go into more detail about customer loyalty programs in a bit.

Invest in community building

Communities foster connections. Cultivating an online space where like-minded individuals can interact and nurture relationships will only improve your customer loyalty. You can do this by:

  • Having active forums
  • Engaging on social media
  • Giving helpful webinars
  • Hosting conferences
  • Encouraging UGC (user-generated content)

What is a customer loyalty program?

The goal of any quality customer loyalty program is to encourage and reward customers who repeatedly interact with your brand. You want to continually incentivize them to return and resubscribe, upgrade, or suggest your product to others.

How do customer loyalty programs work?

The most basic purpose of a customer loyalty program is to keep customers coming back. Companies can achieve this goal with a range of strategies, such as offering rewards for repeat purchases, discounts during the holidays, or exclusive access to new services still in the beta phase. The entire point is to motivate customers to return.

Types of loyalty programs

Again, there is no single solution. You will most likely want to combine a few of these into a unique offering designed especially for your brand.

  • Point-based loyalty program: Probably the most common, this program encourages customers to make more purchases because they receive points they can redeem for rewards.
  • Tiered loyalty programs: There is a sense of exclusivity here. You are offering different tiers for different levels of loyalty. The more engaged the customer, the better the potential rewards and the higher the tier they can access. The finance sector often uses loyalty programs like this, with credit card rewards for Gold, Platinum, or Diamond members being the most well-known example of this type of loyalty program.
  • Paid loyalty programs: Here, customers pay a membership fee to get exclusive benefits. Think Amazon Prime for streaming video, free shipping, and “Amazon Day” deals unavailable to those outside the program.
  • Value-based loyalty programs: Customers receive rewards for purchases and actions aligned with a brand’s values. Maybe a finance company rewards customers for attending financial literacy webinars so they have better spending habits related to their services.
  • Coalition loyalty programs: This is an excellent system for small businesses that want to team up and offer a unified loyalty program. Customers can earn rewards if they shop with partners. Airlines do this through frequent flyer programs where you earn points at participating hotels, car rentals, and restaurants.
  • Game-based loyal programs: McDonald’s is well known in this arena for the Monopoly game incentive. For a SaaS company, maybe you provide badges for users who complete tasks or training modules inside your software.

How to write a great loyalty survey

Surveys are fantastic tools for measuring customer loyalty because they provide you with reliable, measurable information about how your brand is doing and the value your customers are receiving.

There is a bit of a science to getting the perfect survey down on paper (or on an online form). There’ll be some trial and error, but when you nail it, you will collect excellent data for decision-making for the future.

Understand the purpose of your survey

With so much information available, you want to focus on the specific purpose you’re trying to measure. Maybe you have a new product being launched or want to know if your team is providing quality support. Have a focus so you can understand what is driving loyalty to your company.

Identify your target audience

Before you write any survey or start a loyalty program, you want to know who you are targeting. Think about which audience’s feedback is most pertinent to your goals. You want to turn these insights into action.

Choosing the right survey format

While an online survey works best for tech-savvy SaaS audiences, other demographics may not have as high a response. What drives customer loyalty for one audience will be different for another. Similarly, the channels they favor for survey-taking will also be different. Some popular survey formats include:

  • Questionnaires
  • Online Surveys
  • Telephonic Surveys
  • Face-to-Face Interviews
  • Mail Surveys
  • Kiosk Surveys
  • Mobile Surveys
  • Focus Group Surveys

Designing clear and concise questions

Do your best to make your questions as clear as possible. Try to eliminate any bias on your part that leads a customer to a desired outcome, like asking leading questions for example. You want hard facts, so you know precisely what their experiences are with your brand.

Creating a logical flow

Just like a sales funnel, you want your customers to flow through the process naturally. Start with broad questions and narrow them down so your customers feel engaged and not overwhelmed.

Optimizing survey length and timing

Offer a survey that is quick and doesn’t take your customers more than a few minutes to answer. Doing so can influence response rates positively.

Incorporating feedback mechanisms

You’ll never know if your customer loyalty program is working if you don’t give your audience a chance to offer feedback. Expand your survey to more than True/False answers by having multiple-choice, open-ended forms, and other types of responses.

Testing and refining your survey

Pilot-test your survey with smaller focus groups. This will allow you to identify and fix any design flaws before you send the survey out to a larger audience.

Customer loyalty questionnaire example questions

Need a little extra support getting started? Take a look at some of the questions below to build your survey.

  • On a scale of 1-10, how likely are you to recommend our service to a colleague or friend?
  • What features of our product do you value the most?
  • How can we improve your experience with our service?
  • Have you used our customer support? If yes, how would you rate the experience overall?
  • How satisfied are you with the after-sales support you received from us?
  • How often do you consider alternative brands or providers before deciding to purchase from us again?
  • Which of our products/services do you feel has the most room for improvement?

Wrapping Up

What drives customer loyalty for one brand may not work for another. There will be trial and error as you move through building your brand’s customer base. You’ll need to figure out what inspires them to stay loyal as you go.

You’ll also need to figure out exactly how you’ll go about measuring loyalty. At Fullview, we believe in talking to customers regularly and studying their behavior in our product with session replay recordings to give us the most unbiased look at what is and what isn’t working. This then informs everything from how we offer support to how we onboard users to what features and product improvements we put on our roadmap.

If you’d like to learn more about how Fullview can help you boost your customer loyalty, try our interactive self-guided online demo or book a meeting with our sales team.

Sources used:

Sources last checked on 29-Oct-2023


Shifa Rahaman

Content Marketing Manager


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