If you are on a journey to build customer loyalty, start with answering 2 questions

Being deeply involved in customer loyalty strategies, customer retention and growth programs, loyalty programs or variations on these, often brings me to two questions that I always ask clients when they are considering “customer loyalty” as a business growth strategy:

Question 1: What does customer loyalty mean to you (the business/brand)?
Question 2: What does customer loyalty mean to your customers?

Some answers to question 1: For simplicity sake, here are some answers we have gathered and which are in no particular order (brand=business):
• Recommending the brand
• Purchasing more often
• Paying a premium (or even full price)
• Forgiving the brand when it stuffs up
• Spending all of the (category) dollar at the brand
• Following a brand on social media
• Choosing to purchase at a brand over a similar competitor
• Spending more in a transaction
• Purchasing the brand for as long as it is relevant (lifetime value)
• Promoting the brand to friends
• Posting positive reviews/comments about the brand
• Others….what are yours?

You might be thinking…it’s all of these.

That’s ok, as the first step is to get a list of ALL the reasons, then try and rank the top 5 reasons and gain alignment on these within the business.

Then go to question 2: What does customer loyalty mean to your customers?

Ask your customers the same question with a randomised list of options (adapted to be relevant to customers), with an option for them to also rank their top 5.
Then compare the answers.

How closely aligned their answers are to yours = “The Loyalty Gap”.

Your customer loyalty strategy has a greater chance of being executed successfully once you know your “loyalty gap”.

When you find the similarity or differences in your “loyalty gap” (be it wide or narrow) then you will know what actions (the kind of loyalty strategy or program to build) that aims to reduce the gap or leverage the alignment.

Interestingly, when we asked members of loyalty programs in the research study ‘for love or money 2015’, “why do brands have a loyalty program?”, the number one ranked reason was “to keep them buying from them, rather than competitors”. Spending more and more often are the 2nd and 3rd ranked reasons by members.

Whether you are planning a loyalty strategy or have one in market, it is worthwhile identifying “The Loyalty Gap” by taking a pulse on what “customer loyalty” means to your business vs to your customers.

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