What is Customer Loyalty? Types, Importance, Examples

The objective of every business is to make customers loyal to their brand so that they would purchase products and services repetitively. Today, we’ll discuss what is customer loyalty; its importance, its various types, how to build it, and top examples.

What is Customer Loyalty? 

Customer loyalty is the process of developing a regular emotional relationship between the customers and the company. It outlines the willingness of customers to prefer your product repetitively over the competitors. However, loyalty is the byproduct of the trust and experiences of customers in you and the product you’re creating.

When customers are loyal to a specific brand, late availability and pricing won’t impact their decision-making process. Your target customers would be willing to pay extra as long as they’re sure that they would receive the quality product. Some of the main traits of loyal customers are as follows;

  • Keep on buying from your company as long as they need things
  • Provide valuable feedback in order to improve your product or service
  • They understand and trust the company to fix the problem in case it comes to light
  • Keep on checking out the other products and services of the company
  • Won’t pay heed to the sales pitch of the competitor’s brands
  • Recommend your products and services in their social circle
  • Won’t look for the other brands to try out their products and services

Importance of Customer Loyalty 

Customer loyalty plays a significant role in the growth of your business because of the following reasons;

Repetitive Customers

The purchases and orders from the old and regular customers are much higher than the new customers. It is because they’re familiar with your brand and trust the quality.

Higher Conversion Rate

The conversion ratio of regular customers is much higher than that of new customers. According to an estimate, the conversion rate is roundabout 60% to 70% of the loyal customers, and the new ones have a conversion rate of 5% to 20%.

Increased Profitability

If you want to enjoy profitability, companies should promote customer loyalty. The profitability of the company would increase by 25% to 95% with an increment of 5%.

Lower Retaining Cost

If we compare the costs; the cost of acquiring new customers would be much higher than retaining the old customers. According to an estimate, the cost of acquiring new customers is 5 times higher than retaining the old ones.

Better Planning

Businesses and companies could develop better planning and improved strategies based on the feedback of customers. Marketers should recognize their loyal customers and reach out to them for their honest feedback.

Become Regular Shopper

Loyal customers would visit your shop repetitive, and it is highly likely that they would buy things from you during their visits.

Spend More on Holidays

The spending rate of regular and loyal customers is much higher during the holiday season.

Types of Customer Loyalty 

Some of the main types of customer loyalty are as follows;

True Loyalty

Such types of customers are like ambassadors and advocates of your company. They would share their happy experience among their friends, relatives, and their social circle; buy your products repetitively.


It is those types of customers that won’t buy your paid services and products. Instead, free services would attract their attention like free inspections, infant changing tables, and free Wi-Fi. This type of customer is only loyal to the freebies offers; they won’t make any significant contribution to the business of the company.


They’re such customers that are convenient to talk to, find, and convince to buy your products and services. The price factor won’t influence their purchasing decision, rather than the convenience factor.

Loyalty Programs

It is those types of customers that aren’t loyal to your products, services, or brand. Instead, their loyalty lies only with the company’s loyalty programs in the form of incentives, gifts, discounts, and coupons.

Price Loyalty

It is those types of customers that are only loyal to the lower price that you’re offering. If they receive a better price offer from somewhere else, they would instantly go there. However, it is very costly to retain such customers.

Happy Customers

Happy customers are those that have shopped from your store multiple times and have never complained about your product or service. Your competitors could easily take them away by offering them a better price or discounted rate.

How to Build Customer Loyalty 

Some of the main tips and strategies on how to build customer loyalty are as follows;

Loyalty Programs

The loyal programs comprise discounts, freebies, incentives, coupons, and others. They’re the best way to attract the attention of your target customers. They could be in the form of monetary rewards or non-monetary rewards associated with achieving the specific types of goals and objectives.

Making Them Priority

Prioritizing your customers requires you to develop a better relationship with your customers and it should manifest itself in the company’s strategy. It starts with segmenting your target customers, understanding their needs, wants, and wishes, and reading their reviews and recommendation in order to develop a better product meeting their requirements.

Launching VIP Tiers

Social status is a great source of motivation for rich and quality-conscious customers. When you launch a special category of premium product for the VIP customers, then it attracts their attention and connects with the brand. In order to amplify their participation, you should offer discounts to VIP customers.

Dividing Your Clients

You can’t make your customers loyal to your brand without offering them personalized service. In order to follow the personalized approach, it is better to segment your target customer market into various groups. It would become much easier for you to satisfy their needs with personalized offers.

Examples of Customer Loyalty 


Uber offers a certain percentage of discounts to its loyal customers on the next rides or on special occasions or achieving the specific ride target.


DavidsTea offers free samples, free delivery service, and discounts for the shopping of a particular amount of money. They’re a great source of motivation for many new and regular customers.

Conclusion: What is Customer Loyalty? Types, Importance, Examples, Tips 

After an in-depth study of what is customer loyalty; its various types, importance, tips on how to build it, and examples; we have realized that making customers loyal to your brand requires you a lot of effort. If you want to win the loyalty of customers, then you should follow and practice the abovementioned tips and guidelines.

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