Customer Loyalty: Strategies for lasting loyalty and repeat business

In this article we break down what customer loyalty is and look at some approaches to consider when in implementing successful loyalty strategies.
Written by
Sean Riordan
Published on
November 22, 2023
Customer Loyalty: Strategies for lasting loyalty and repeat business


Acquiring new customers can be five to 25 times more expensive as retaining current customers. Repeat business is essential for businesses to grow long term and lifetime customer value (LCV) should be a KPI every business is tracking.

In this article we break down what customer loyalty is and look at some approaches to consider when in implementing successful loyalty strategies.  

What is Customer Loyalty?

Customer loyalty refers to the likelihood of previous customers continuing to buy from a particular retailer, brand product or service.

Essentially, customer loyalty is established when customers consistently choose a brand not just for practical reasons like cost or product features, but also due to emotional bonds built on trust, reliability, and high-quality interactions.

Three Pillars of Customer Loyalty

We have broken down customer loyalty into three key pillars.

Quality of Product/Service

A 2023 study by Rane, Achari and Choudhary found product quality was positively correlated with high customer loyalty. This high loyalty was also found to increase word of mouth referrals.

A KPMG study also rated quality of product as number one factor with 74% of customers stating the quality of the product keeps them loyal to a brand or service, with 65% of respondents also saying that the consistency of that quality also being a factor.

In simple terms, quality is the foundation of customer loyalty.

Customer Experience 

A positive customer experience is non-negotiable.  

As Gartner put it “Make life easy for your customers and they are more likely to stay and buy again”.  

However, they go on to say that “delighting customers in a one off moment has a very low impact on loyalty overall”, so we’re talking about repeat interactions here.

Keeping the whole experience efficient, effective and consistent is the key to keeping customer loyal to your product or service. Everyone should get the same fantastic experience.

Because the product or service can have such a big impact on customer loyalty companies can focus on just the product sacrificing the whole experience. We talk about that more here.

Trust and Relationship

At the heart of customer loyalty lies trust. Businesses can build trust through transparency, consistent quality, and ethical practices.

The role of trust and relationship can vary by industry and the best way to understand its impact, is get into the head of your customers. If you understand what they value, you can more easily build that relationship.

Our Persona Workshop Webinar and Customer Journey Mapping tool are two free tools you can use to better understand your customers.

Benefits of Building Loyalty

There are numerous benefits to building loyalty in your business we have listed four below relating to repeat business:

  • Increased Customer Lifetime Value: Loyal customers contribute more to your bottom line over time. As we said in the introduction acquiring new customers is often more expensive.
  • Enhanced Profitability: Loyal customers tend to buy more and try new offerings without the persuasion needed for new customers. A study from Bain & Company indicates that returning customers could spend up 67% after 31 months than new customers spend in the first 0 – 6 months as a customer.
  • Competitive Advantage: Customer loyalty can set you apart from competitors. A strong loyalty base means customers are less likely to switch, providing a competitive edge in saturated markets.
  • Reduced Marketing Spend: Loyal customers not only purchase more, but they also act as advocates for your brand. Nielsen reports that 92% of consumers believe suggestions from friends and family more than advertising, reducing the need for extensive marketing budgets.

Ways to Increase Customer Loyalty

We have already highlighted three customer loyalty elements, which links directly into the ideas below:

Diagnose Customer Loyalty Problems

Without data or insights, it can be difficult to diagnose loyalty-based problems as they can often cover a wide area of the business.  

We solve the below problems regularly with clients and all these problems can potentially stem with increased churn or low lifetime customer value.

If you are not sure where to start in diagnosing these problems, our Diagnostic Sprint can define these types of problems with you in just a few days.

Depending on the complexity and value of the problems the solutions can vary.  

Conducting in-depth user research can uncover the internal problems you are facing. We discuss how where to start with user research in our detailed guide here  

Implement Findings from Feedback or Research

As we discussed earlier, the product/service you are offering can have a large impact on customer loyalty.  

Implementing findings from your customers that are impacting their experience or perception of your product will improve customer sentiment.  

We cover this topic further in our article about problem-focused strategy.

Measure Customer Loyalty

If you are not already, finding ways to measure customer loyalty will allow you to measure the impact of any changes you make. These changes are likely to require investment so having KPIs is extremely important to justify them.  

According to Customer Gauge 44% of businesses do not know their rate of churn or customer retention. They also found 32% of B2B executives were completely unaware of their loyalty rates at all.

NPS scores, referral metrics, lifetime customer value, customer satisfaction surveys and positive reviews are all great ways to not only keep improving but to provide important context into what further changes could deliver for your business.

Offer Exceptional Value (Based on your pricing)

The study from KMPG we referenced earlier also found that price was the least important factor in driving loyalty out of the seven they investigated.  

This is likely because price and value are often perceived as two different things.

Its importance can also change depending on your position in the market and current pricing strategy.

As trust and loyalty increase, so does the willingness to pay higher prices.

This will help you refine your market positioning, effectively attracting and retaining customers.

There is a fine balance here. Companies like Spotify have grown by providing exceptional value but at the expense of their own profitability.  

Now they need to rely on price increases to become profitable whilst operating in a competitive market.  


It is clear there are numerous benefits to increasing customer loyalty and the benefits go far beyond just repeat business from customers.

The starting point for implementing these strategies may differ depending on the current stage of your business, but with the ideas provided in this article, we hope you have a solid foundation to begin creating loyalty with your customers.

If you have a problem that you want to talk through, get in touch today.

No items found.
No items found.
No items found.


Regular newsletter
Our latest thoughts, tips and exclusive interviews in your inbox every month.