A research study on customer loyalty conducted at Sense360 by Medallia reveals how to get loyal customers and what is the best way to measure loyalty. It is interesting to read the full Medallia Redefining Customer Loyalty report, a summary of which can be found in this post.
First, the study poses the following question:
What makes a customer loyal across various businesses such as airlines, hotels, restaurants or retail brands?
Through a survey, a number of individuals were asked to share the main reasons why they feel loyalty to a particular brand. Consumers consistently cited the following as the top loyalty driver:
‘I am loyal to a company when when I think of a certain category of products or services, I think of that company.’
This was the main reason cited by the majority of respondents; for them the first company that came to mind when they thought of purchasing a certain product was a symbol of loyalty.
Based on the survey responses, the research team found that the other main reasons for customer loyalty were as follows:
- Product quality: this factor influences the loyalty of restaurant and retail chain customers.
- Enrollment in a loyalty program: Hotel and airline customers say this is their primary loyalty driver.
- How often the customer buys from the brand: Being a frequent shopper is one reason why restaurant and retail customers say they feel loyal to a brand.
Secondly, the study analyzes:
How can brands increase customer loyalty?
Based on the survey responses, the research team notes that brands that want to increase customer loyalty should prioritize strategies that put their brand at the forefront of their customers’ minds over the competition, such as maintaining contact with customers between visits or purchases.
Finally, the study asks:
What is the best way for brands to measure fidelity?
Brands typically measure customer loyalty by looking at data from their own internal systems, tracking things like purchase frequency, customer lifetime value or NPS survey responses.
At Medallia’s Sense360, they’ve approached things differently. They measure customer loyalty by tracking consumer panelist activity across the market. This takes into account all of a given consumer’s in-market activity (such as budget spent) to determine what loyalty market share their brand is gaining.
The Allswers customer experience platform helps you track customer loyalty in a simple and cost efficient way.