If you are on a weight-loss journey, you know how important it is to weigh yourself. It helps you understand how far you have come and how close you are to achieving your goal. Similarly, in your endeavor to create brand loyalty it is important to measure loyalty periodically to gauge how close you are to achieving your marketing objectives, what strategies are working, and what are not. Customer loyalty analysis can help you analyze your customer base and give you an estimation of your market position.
In this blog post, we explore the best customer loyalty analysis strategies and ways to increase deprecating customer loyalty.
Table of Contents
What are the Key Customer Loyalty Metrics?
- Net Promoter Score (NPS) – NPS is a pretty straightforward and universally known and accepted metric to gauge customer satisfaction and customer experience. This metric system divides customers into three categories – promoters, passives and detractors based on their NPS scores. The promoters are either loyal customers or have a high likelihood of turning into one, while detractors are unhappy customers with a low probability of turning into brand champions.
- Customer Loyalty Index– The customer loyalty index is a metric much like NPS. The customer loyalty index is derived from customer surveys and feedback forms. It gives a good idea of who your loyal customers are, who are likely to turn to brand advocates and even point out flaws in your marketing strategies.
- Repurchase Rate – Repurchase rate or repurchase ratio is the number or repeat purchasers you have in a given period of time. Repeat customers are an asset to any company, they are relatively economical to retain and bring more profit to the company than newly acquired customers. They have a higher probability of turning into loyal customers in the future when nurtured. Calculating the repurchase rate will show you what you need to focus your marketing strategies on along with the approximate cost of retention and acquisition.
- Engagement Rate – Engagement rate is the aggregate ratio derived from various customer touchpoints and programs designed by the brand. It takes into account the number of customers actively participating in loyalty or other programs offered by the brand and gives a good approximation of your active and retained customers.
- Upselling Ratio – Customer loyalty analysis can also be derived by accounting for the upselling ratio. Upselling is when a repeat or loyal customer buys other products from across your brand extension. This means that the faith the customer has in your brand is strong and is not limited to a particular product or service. Your upselling rate will give you a good estimate of how loyal your customers are towards your brand.
- Customer Lifetime Value – Customer lifetime value refers to the total revenue generated by a customer throughout its association with the brand, starting from his first purchase to his last. Customer lifetime value enables a company to quantify the value of the brand’s customer experience strategies.
How to Increase Depreciating Customer Loyalty?
Be it in personal relationships or business scenarios, loyalty is a two-way street. In order to foster loyalty among your customers, you need to adopt a customer-centric approach. You need to show your customers that you are loyal to them and dedicated in your endeavors to create a better experience for them. Listed below are key strategies to help you navigate your road towards two-way loyalty.
- Improving Customer Experience – Customer experience is an integral part of businesses. It is the sum total of experience a customer has with a brand which includes presale and post-sale processes. Almost 86% of the customers are willing to pay more for a great customer experience. Improving the customer experience can significantly improve customer retention rate and consistent efforts can positively influence brand loyalty in the long run.
- Closing the Customer Feedback Loop – Listening to your customers and working on their feedback is important, however closing the customer feedback loop by informing the customers their issues are resolved is all the more crucial. Closing the customer feedback loop, ensures that the customers are made aware of the ticket/issue resolution. It helps in projecting a positive brand image and improving customer satisfaction levels, thereby encouraging repeat purchases.
- Personalization – Personalized experiences are a sure-shot way to win over your customers. With the data accumulated through loyalty programs and other marketing strategies, you could create personalized experiences that appeal to the individualistic taste of your audience. In 2019, 72% of the customers only engaged with brands that offered personalized experiences. Personalization can have a quantifiable impact on customer satisfaction, retention and even acquisition rate through word-of-mouth publicity.
- Loyalty Programs – Loyalty programs will not only help with customer loyalty analysis but also help to improve overall brand loyalty in the long run. Customers that participate in loyalty programs are engaged with the brand for a prolonged period of time and develop an affinity towards the brands because of the rewards and incentives they periodically earn through loyalty programs. However, loyalty programs are not a one-size-fits-all strategy, customizing a loyalty program to suit your brand aesthetics is crucial. Annex Cloud’s proven success process helps you design a loyalty program that’s the perfect fit. Learn more about Annex Cloud’s industry-leading loyalty solution.