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Why You Need More Than One Metric to Describe Customer Loyalty

As a business leader, you know the importance of keeping your finger on the pulse of customer loyalty. A critical part of customer relationship management, customer loyalty goes well beyond a customer making a purchase. Loyalty is steeped in the relationship between the company and purchaser.

A loyal customer believes your organization offers the best option. Loyal customers will purchase a product or service from the same brand, over a long period of time, while turning down competitors, and spreading satisfaction through word of mouth. Loyal customers will stay with you even in trying times. 

Customer loyalty can’t be summed up in a single number.

customer loyalty can't be summed up in a single numberWhile loyalty may appear as a single topic on your priority list, it would be a mistake to try to measure it with just one indicator.

As an example, many businesses looking to improve customer satisfaction use a Net Promoter ScoreSM (NPS®). This system measures the likelihood that customers will recommend a product, service, or company to others, and is often touted as “the only number you need to know.” Likelihood to recommend is certainly worth measuring; CSP uses the NPS® system ourselves. However, this score alone does not tell you enough.

Think of it this way: You wouldn’t use your blood pressure as the sole indicator of your total health, right? It’s important, sure, and it would be convenient if that was all you needed to pay attention to, but it’s not the only vital statistic your doctor needs to track to assess your overall well-being. The same logic applies to customer loyalty.

Instead, what you should aim for is a customer loyalty index that reflects multiple measurement methods and tracks them over time. This allows you to break down the customer relationship into feedback, perceptions, and issue resolutions. Ultimately, you’ll be able to see what you need to do to maintain and increase your loyal customers.

Aim for a full picture of your organization’s brand loyalty.

Measuring customer loyalty in a variety of ways gives you a more comprehensive, multi-dimensional view of your customer loyalty situation. In addition to at-a-glance scores like NPS®, a customer loyalty index can include attitudes and behaviors such as overall satisfaction with customer service, and likelihood of a customer to make a future purchase.

Capturing this data will yield many benefits, among them:

  • Producing a good view of your current standings with the customer,
  • Predicting future retention, and
  • Providing the foundation for building a loyalty profile for your customer.
Closely examine your metrics at the outset.

According to IRI, 44% of Millennials claim to be brand loyal. With their impressive purchasing power, figures like that should motivate you to keep the company-customer relationship at the forefront of your strategic planning.

What do you want your measurements to tell you? Start with the results you want to see to help you decide how to prioritize the data you collect. You will likely find you need more indicators than you thought, but taken together, all these measurements complement one another.

Studying the results of your customer research will produce opportunities to compare your organization against industry standards and your direct competitors, identify your strengths and weaknesses, and zero in on customer preferences. CSP’s Customer Experience Management solutions are designed to provide exactly these opportunities, with the added benefit of guidance from seasoned experts to help you identify what to focus on and what steps to take.


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Net Promoter, NPS, and the NPS-related emoticons are registered trademarks, and Net Promoter Score and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld.




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