Improve customer loyalty and retention by focusing on relationships

Lasting loyalty can't be bought—it has to be earned. Find out how it's done.

By Sarah Olson, Senior Associate, Content Marketing, @seolson5

Published March 31, 2020
Last updated May 10, 2021

Relationships are a two-way street. Relationships between customers and companies are no different.

Speaking at the National Retail Foundation Conference in 2020, Shelley Bransten, corporate VP of Retail and Consumer Goods Industries at Microsoft, asked the important question, what about loyalty to customers?

"Brands need to stop thinking about how customers are loyal to them, but how we are loyal to customers."

Read on for helpful tips to show your loyalty to customers and earn theirs.

customer loyalty and retention

Customer loyalty vs. customer retention

  • Customer retention means that a customer buys from you, but they don’t necessarily have a strong affinity for your brand.
  • Customer loyalty means that a customer prefers your company, and if given the choice, they would choose your brand over another.

How to increase customer retention

Once you've gained a new customer, you need to convince them to stick around. Show them you're committed to providing a good experience, and of course, being good humans.

Below are a few ways to win them over:

Customer loyalty and retention first impression
Make a good first impression

Everything you do tells a story about your brand, from your website to your customer service. Did you know that nearly half of customers would switch to a competing brand after one bad service experience? You might only have one chance, so make it count.

customer loyalty and retention be helpful
Be helpful

When a new or potential customer reaches out, do everything you can to help. Answer their oddly specific questions or look up something they could Google themselves. Showing someone a little kindness is an easy thing you can do to build trust.

customer loyalty and retention seamless experience
Create a seamless experience

Customer experience is one way companies can stand out from the competition. For example, you could deploy a chatbot on your checkout page to help customers answer any lingering questions. This shows customers that you're thinking of them every step of the way.

customer loyalty gratitude
Show gratitude

Customer appreciation helps establish a good relationship with your customers and encourages them to come back. If they are a first-time customer, show your appreciation by giving them a discount code. Loyalty programs are another way you can thank your customers.

How to increase customer loyalty

Making a good impression is only the first step. To cultivate loyal customers and brand advocates, you need to make a deeper connection.

Here are a few ways to show your customers they can depend on you.

  1. Be honest and real

    We expect honesty from our friends, and customers expect it from companies too. A 2017 survey showed that 86 percent of people say authenticity is important when deciding what brands they like and support. This means providing customers the information they need, portraying your product accurately, and admitting mistakes even when they are big or uncomfortable.

  2. Respect their time

    More than 60 percent of customers said a speedy response was an important aspect of good customer service, according to our Customer Experience Trends Report 2020. Make sure you have the tools in place to respond quickly on the channels your customers prefer. Being able to respond on WhatsApp, for example, could set you apart from competitors.

  3. Show empathy

    Customers aren't likely to stick around if they don't feel heard. Listen to your customers when they provide feedback, show empathy for their experience, and then take steps to improve. Use tools like satisfaction surveys and focus groups to gain deeper insight, so you can really understand what your customers need and how you can deliver for them.

  4. Have fun

    You could provide free stickers with every package, share quick quips on social media, or create customer communities. For example, Starbucks created a Facebook group for Pumpkin Spice Latte fans to give them a space to share their love unapologetically. Customers will come for your product or service, but they'll stay because they enjoy the community you've created.

Measuring customer loyalty and retention

Measure customer loyalty and retention

Here are a few widely accepted metrics that can help you understand where your brand might fall in terms of loyalty and retention:

  • Customer retention rate

    Your customer retention rate is a reflection of customers who were retained over a period of time. Having a high retention rate means you’re doing something right and can instead focus on how to foster greater loyalty.

  • Customer churn rate

    Related, your customer churn rate is the percentage of customers lost during a period of time. Churn is inevitable, but it's important to track as an indicator of brand health or a warning of potential problems.

  • Customer satisfaction score (CSAT)

    Your customer satisfaction score is measured by asking your customers one simple question: How satisfied were you with your experience today? Your CSAT, then, is the percentage of customers who said they were satisfied.

  • Net Promoter Score℠ (NPS)

    Net Promoter Score is measured by asking customers how likely they are to recommend your product to friends or family, measured on a scale of one to 10. Based on their rating, customers can be broken down into three categories: promoters, passives, and detractors.


Customer loyalty starts and ends with CX

Customer loyalty isn’t just about a great deal or value proposition. Every aspect of your customer experience—marketing, sales, customer support—plays a role in fostering that relationship.

You can have the best product in the world, but if your sales process is impersonal or your customer support is inconsistent, you risk losing your customers’ trust and jeopardizing the relationships that you worked so hard to establish.

Take control of your CX. Get started with a free trial today.

Net Promoter and NPS are registered U.S. trademarks, and Net Promoter Score and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld.

Customer Experience Guide

Find out how to create great customer experiences that will lead to loyal customers, improved word-of-mouth promotion, and increased revenue. Get started with our free guide.