Home Marketing Customer Loyalty - Detailed guide about Loyalty building

Customer Loyalty – Detailed guide about Loyalty building

Do you know about customer loyalty, and how it protects businesses from their competitor? If no then get ready to know because without managing the customer relationship, a business never succeed.

So customer loyalty is a process where a company manage their relationships with customers by giving them their desired value of product and service.

When you purchasing something from online stores like Amazon or Flipkart, in every purchase they will give you some points so that you can use that point at your next purchase, which is also part of a loyalty-building.

So here I will discuss how customer relationship built and that will help you to grow your business.

Mobile customer loyalty programs.

What can I learn from here?

  1. Definition of customer loyalty
  2. How to build customer value, satisfaction, and customer loyalty?
  3. Customer lifetime value.
  4. Attracting the right customer and cultivate a strong relationship
  5. Conclusion.
  6. Frequently asked question.

Definition of Customer Loyalty

Customer loyalty is, how better you satisfy your customer than your competitor by providing them with their desired value so that they never go to another brand.

So for that, you have to build a strong relationship with your customer. If they are satisfied then they will remain loyal.

A good product is the most important factor to grow a business, just like that building a strong relationship with customers is also important to grow a business in the long-term.

Benefit of loyalty in a cycle

How to Build Customer Value, Satisfaction, and Customer Loyalty?

Infographic of customer loyalty.

Now, these days if a customer thinks to buy something then he or she has many sources to collect information and to choose a better offering product.

So for that reason as a marketer, you have to be very careful about your offerings to the customer.


Generally, customers choose a product from the company who gives them the best offer in terms of value.

When a customer wants to buy something then he or she compare one company’s product to another.

And in between, they also see how an individual company’s product gives them a greater benefit from what they pay.

So the difference between evaluating a product’s benefit and the cost is called customer perceived value.

The customer benefit, it is the benefits customer expect from a company’s product or service and also the company’s image.

And total customer cost means what a customer gives to that company to get the benefit. That should be the money, energy and also time which he or she spends to search and buy a product.

So as a marketer to give your customer more perceived value you have to increase the value of the product by increasing the total customer’s benefit and decreasing the costs.

Example:- If you are a car manufacturer then how can you increase your car’s value?

When a customer wants to buy a car then they search on the internet, call their friends and family for reference, go to the showrooms to trail.

And when they see a better car which gives them more benefits than they are paying then they buy that car.

So if you want to sell your car then you must have to give customers extra value than what they pay.

To increase customer’s perceived value you can increase your product’s quality, brand image and also by decreasing their cost.

You can train better your staff about product knowledge so when customers want to know information then they can help.

By saving their time and energy at the time of delivery you can also increase perceived value.  

customer’s value analysis

We can also conduct a customer’s value analysis to know the company’s strength and weaknesses by these various steps:

  • So to identify what major attributes and benefits affect the customer’s value, most marketers should ask customers about the benefit they look for in choosing a product.
  • Also ask customers to rate the importance of different attributes of our product. So that we can better position that product.
  • Also ask customers to rate the product’s attributes based on the competitor’s product’s attribute.
  • We also have to always monitor customer values.


Customer Satisfaction:

 It is a feeling of pleasure or disappointment of a customer, that what he or she expects from the product or service’s performance.

 If the performance score low than what he or she expects the customer fell dissatisfied.

 If the performance score is the same as he or she expects then the customer is satisfied, and if it exceeds expectation then the customer is highly satisfied or delighted.

A customer’s expectation form, because of their past buying experience.

It also increases if any family member or friend who uses that product and suggests to buy, and by marketer’s promise.

The customer expectation increases more to the brand with which the customer is more loyal.

 So as a marketer you have to clear about what your promised expectations, and deliver performance to match that expectation. 

You can also increase customer’s satisfaction by giving them their expected performance or value. By giving them value we can also create strong customer loyalty.

Monitoring Satisfaction:

We also have to regularly monitor, is our customer is satisfied with our product and service or not?

If not then we have to change our marketing strategy according to the result.

Customer satisfaction is most important to retain the customer. If a customer is highly satisfied then he or she stay loyal to the product and company also.

And when the company introduces a new product then, that customer’s chances of buying that product increase, and a loyal customer always talks good things about the company to others.

Then people’s trust increases regarding our product or company and more customer like to spend on our product.

So we have to analyze and monitor all sales data to know who is buying repeatedly, who stop buying and switch to a competitor, and why.

 After finding all the reasons, then plan your marketing program according to the result. Customer’s satisfaction also depends on product and service quality.

Some important factors to satisfy customer & build customer loyalty:-

  • Generally, first, you have to identify the customer’s needs and wants.
  • Then you have to communicate properly about customer’s expectations to the product designers.
  • Then you have to check all the operations are going well or not like orders are filled on time, is customers are received full instruction, training to use that product or not.
  • And you also have to take feedback from customers and working to improve the product or service.

How to Maximizing Customer Life Time Value?

Customer Lifetime Value

A customer’s lifetime value is the expected value of profits, that a customer can purchase throughout life. Here the marketer can also spent more money to acquire more potential customer.

Video source: intellectual indies 

Like Amazon and Flipkart spends more money to acquire a new customer, suppose a product’s price is Rs.100 then they may spend 200 or 500.

Why they spend more than their product’s price? When a customer goes to amazon and buy, and that product satisfies that customer then they may become loyal.

Because they become loyal so next time whatever he or she wants something then they buy from amazon. But that time amazon doesn’t spend money on that customer.

And because Amazon has lots of products so, amazon can earn a lifetime revenue from that customer. That is called customer lifetime value.

So when they sell the first product it might be in little lose but after that the company generates revenue for a lifetime from the other products.

Customer Profitability –

How much revenue generates a company from a particular customer is called customer profitability.

The rule 80-20 also says 80% of profit comes from only 20% of the customer.

 So we have to find our loyal (5-star giving) customers and focus them more. Because they are the most important customers for the company.

 We also can offer them more to satisfy. And the customer who is semi loyal (3 or 2 stars) customer, we also have to try to bring them from 3 stars to 5-star category by offering a good value or discount. So that we can bring them to our regular customer category.

 Because the rest of them are not our regular buyer so we don’t have to focus more on them. So by increasing customer profitability, we can increase a customer’s lifetime value. And in that way, we also can create customer loyalty.

Attracting the right customer, cultivate a strong relationship & Customer Loyalty? 

A shopkeeper building relationship with a customer

So nowadays to grow the business or profit, companies trying to acquire new customers by spending a lot of money in advertisement, by mail, salespersons and any other ways.

But acquiring a new customer is more costly than retaining the old customer.

Only acquiring a new customer is not enough but we have to keep and make them a loyal customer.

Managing the customer base:  

By also giving employees good training to talk friendly and give them all the information about the products.

Then they can give a better answer to the customer’s shopping-related questions, we can reduce the defection rate of customers.

We can also grow profit by offering or selling new or old products to our existing customers.

The customer who is low profitable for us, either we can convert them to a profitable customer by increasing the price, or we have eliminated that type of customer.

So now we have to give more focus on the most profitable customers by offering them a good deal, or we can greet them for a birthday, anniversary to build a strong relationship.

Building Customer Loyalty:   

To build customer loyalty we also have to create a superior product, service, and experience for the target market.

We have to monitor all the processes whether customer repurchasing or switching, if switching then we have to know the reason and rectify them.

Then we have to manage satisfaction and retention rate. We can collect and organize a database of all customers so that we can monitor each and individual customer’s needs, purchase frequency, and also satisfaction.

We can develop a customer loyalty program for customers, where when they purchase something then we give them some point they can use that point in their next purchase. In this way we can hold them.

We can also create brand communities, groups and give them special; discounts.

We can build customer loyalty through social channels, by requesting our customer to share a photo of our product or shop in your social media account. Because whenever they share, their friends also see the post and indirectly our promotion occurs.

Sharing with Instagram in phone

We can also build customer referral programs, here our customers refer our product to others for a small income.

Cultivating Customer Relationships:

To create a strong customer loyalty we have to collect all the data of name, contact, purchase date, purchase item, purchase frequency, date of birth, all type of data as much as you can collect.

So now we have to analyze the individual data of customers to develop marketing strategies. We can also use CRM software to manage this data.

Personalizing Marketing:

By personalizing marketing we can market our customers to feel them personal with our product.

By message them by their name, like Dear Narayan, Dear X. And give them some product discounts what they want.

This only happens when we have customer’s data and by a deep analysis of that data, we can do personalized marketing.

Customer reviews and recommendations:

Reviews and recommendations also play a main role in gaining the customer loyalty.

 A person who want to buy something then he first see the reviews and rating then he buy it or they can ask friends or family to help them to choose a product.

Then that time reviews and recommendation plays an important role.

Customer Complains:

If the product’s performance is not matched with customers expectation then the customer fell dissatisfied, and a dissatisfied customer can harm the company by complaining or posting bad things in social media about the company.

Generally, most of people don’t complain but they also did not purchase any item from that company.

So the marketer must make the complaining process easy. We also have to make a 24/7 customer support, chatbots.   And contact complaining peoples as quickly as possible to solve their problem.


If you have a small business and you want to build strong customer loyalty, then first you have to collect or maintain all the data from consumers.

You can give your customer some points in every purchase so that next time they come back to you to use those points and that way you can make customer loyalty.

If you can give the best product or service then your competitor then they remain loyal to you.

You can collect customers what’s app number and give them personalize value, if a customer is buying repeatedly then you can give a big offer only for that customer.

You also can give them healthy tips. Suppose if you have a vegetable shop then you can send your customer about good healthy recipes and what nutrition is suitable for their body type through what’s app.

So in this type, you can create long term relationships with your customers. You can also see our blog about how customers buy a product?


What is long-term customer loyalty relationship?

Long term customer loyalty is, creating a strong relationship with the customer so that they repeatedly buy our product and they don’t go to any other company.

How to create long term customer loyalty?

By giving our customers a loyalty point in every purchase, by giving them a personalized service we can build brand loyalty. Completely satisfying them by giving a superior product or service.  


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