Customer Loyalty & Rewards
December 19, 2022

Why is Customer Loyalty Important for Your Success in 2023?

There’s no doubting the importance of customer loyalty. After all, without consumers that are loyal to your brand, your business could be trapped in a constant acquisition loop. Not ideal when acquisition costs up to 25 times more than customer retention.

Chances are, you already know why customer loyalty is important. But perhaps it’s not up to you to implement strategies to foster it and you need stats to demonstrate its importance. Or maybe you are a decision maker who simply wants more information before you commit more resources into it.

Whatever the case may be, you’re in the right place. In this blog post we’ll be looking at: 



1) Awareness

2) Research

3) Purchase

4) Experience

5) Repeat

6) Refer

1) Reduces cost of service

2) Loyal customers leave better reviews

3) Loyal customers purchase additional products

4) It boosts profits

5) It retains customers

6) Loyal customers become brand advocates



What is Customer Loyalty?

It’s all about existing customers. How often they shop with you or use your service. Their willingness to pay more for a new product or subscription. How they directly engage with your social media channels and even the way they interact with other customers.

In a nutshell, customer loyalty is an ongoing relationship between customers and your business.  

In traditional brick and mortar establishments – e.g., restaurants – loyal customers are easy to identify, as it’s just a case of remembering faces. For an enterprise predominantly online and digital, loyal customers are not so easily identifiable. Unless of course a customer relationship management (CRM) system is deployed, a customer experience (CX) platform is used, or some other means of measuring loyalty. It stands to reason, then, that enterprises must find ways to foster customer loyalty and track it. 

Customer Experience is Key 

Customer experience is a key fundamental of customer loyalty. Positive experiences with your brand leaves a lasting impression. Positively impressed customers will be chomping at the bit to recommend your products and services. Knowing they’re in good hands will keep them coming back for more. So too will the people they brought onboard if you give them the same positive experience. And every time you do, the consistent, positive customer experience associated with your brand, earns you that little bit more trust.

If experience is key, trust is the door it unlocks to perpetual customer loyalty.

A study by Rare Consulting showed that 83% of customers claimed their loyalty started with trust of a brand. If anything, the biggest takeaway of this statistic should be how aware customers are about loyalty. Gone are the days of simply supplying a great product or service. People want a full experience, to feel valued and nurtured, to go on a journey with your brand.

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6 Stages of Customer Loyalty

Mapping out the customer journey is a key part for any successful business. In fact, it’s essential, even with or without the aforementioned means of tracking loyalty metrics (e.g. CRM & CX). 

A customer journey map allows you to visualise how customers may feel at various touch points. With this information at hand, better business decisions are more likely, making customers feel connected and valued. 

Let’s take a look at these stages.

1. Awareness

At this stage, an individual is aware of an opportunity or problem that they want to achieve or relieve using a product or service.  

2. Research

The prospect consults family, friends, listens to general word-of-mouth, checks online reviews and other trusted sources. A brand with a positive image and happy customers naturally gains interest. There needs to be something in place to make the prospect immediately feel like you understand them. Whether it’s content, downloadable resources, a demo or consultation.  

3. Purchase

Everyone knows the quality of products or services play a major part in customer satisfaction. These days however, 93% of customers reward excellent customer service with repeat purchases. First impressions are key to unlocking trust of increasingly sceptical consumers.


4. Experience

A fantastic experience coupled with a great product or service, is the perfect recipe for long lasting customer loyalty. At this stage, the customer should have experienced the full package…or thereabouts. Dependable and likeable brands move up The Brand Likeability Scale. Likeonomics is a cornerstone of trust building and proving your reputation. 


5. Repeat

An overall positive experience should lead the converted customer into repeat business with you. This is a pivotal moment in building customer loyalty and should be consistently improved upon. You’ll need to build a long term loyalty programme to keep repeat customers engaged. We won’t get into this here but you can click the link in the suggested reading box for a full rundown.

6. Refer

Think of this last section as an added bonus. Existing customers should be well looked after because they are valued. They’ll more than likely share positive experiences with others at this stage. In fact, 72% of customers will tell six or more people if they have a satisfying experience. It’s also worth noting, loyal customers are mostly agreeable. You can leverage this by incentivising them to become your very own brand advocates. 


Let’s recap

Mapping out your customers’ journey is a great method of nurturing loyalty. Consistently providing top quality products or services, together with an unmatched experience, inevitably leads to trust; which in turn, builds customer loyalty. 

Therefore, a business who wants to nurture customer loyalty, should set a goal of moving customers all the way from prospect to brand advocate.

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Why is Customer Loyalty Important?

With all that said, we need solid numbers to demonstrate why customer loyalty is important for your business. After all, converting a prospect into an advocate requires a lot of time and resources. The ROI of customer loyalty is no more evident than in the following stats we’ve compiled.  

1) It reduces cost of service

As more industries, such as micro-saas and app development gather steam, self-service has become a predominant method for end users to resolve issues amongst themselves. 

This is particularly useful if you provide a software or specialist product designed to accommodate a niche market. Pain points are often very specific and tend to have budding online communities. Forums, threads, and discussion boards, populated by users whose interests go beyond the workplace, connect them to each other and at the core of it all is your brand. 

Of course, this is very industry specific and won’t be applicable to all businesses. Recent studies and surveys have shown however, that an increasing amount of customers prefer self-service.

  • 77% of customers react to self-service options more positively

  • 60% of customers prefer using an FAQ before speaking to business representatives; including on chat or community forums

Implementing a rewards programme that incentivises existing customers to help newcomers, essentially provides: 


  • 24/7 support for your customers at no extra cost to you

  • A space for end users to talk about your product (and their interest!) and build an online community. At its heart is your brand

  • A dedicated forum populated by specialists in your domain, which increases your brand authority, and captures the attention of prospects’ at the awareness stage of the customer journey

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2) Loyal customers leave better reviews

Elated customers leave better reviews. This is particularly important when prospects are in the research phase of their own customer journey. Should they stumble on a page that’s glowing with five star reviews…you bet your bottom dollar that’ll get their attention! 

Positive reviews are the ace up the sleeve for any marketing strategy. The scales are tipped towards consumers these days. They don’t care about what marketers have to say about their own brands. They’re all ears when it comes to a customer’s review though!

And who can blame them? As customers, we all want a great experience. Which is why: 

  • 86% of consumers read testimonials before they make a purchase

  • In the same survey, 85% of consumers think star rating is the deciding factor as to whether they should buy or not

  • 89% are “likely” to “very likely” to use a business that responds to all of their reviews

So, what can we gather from this? Reviews are so much more than just a powerful form of social proof. They’re also a possible channel for you to directly connect with your audience. 

Responding to a happy customer compounds their emotions. Acknowledging a complaint and fixing it can reverse a negative emotion entirely. Above all, connection humanises your brand and shows others that you care. 

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3.) Loyal customers purchase additional products

A loyal customer base will always stick with what it knows and loves. First impressions can go a long way but are easily forgotten if a drop in quality is experienced or there’s little to no customer service whatsoever.  

Firmly established and well-thought out touchpoint incentives, almost guarantee that trust will flourish between your business and customers. The point here is, you want to be the go-to brand for all the wants and needs of your customers. If you deliver on one product, they should be able to trust you can deliver on others too. 

Which is why customer loyalty is so important for brands with product ranges. Did you know that: 

  • According to the Pareto Principle, loyal customers make up around 20% of any given customer base but generate 80% revenue! 

  • You’ve got a probability of 5-20% of selling to a new customer as opposed to 60-70% of an existing customer

  • Research suggests that existing customers are 50% more likely to try new products.

Successfully converting repeat customers is an excellent way of improving margins across the board. Of course, this is particularly useful if you offer a range of products or a tiered subscription service. 

Suggested reading: A loyalty programme attached to a tier model subscription is a sure way of increasing customer loyalty. Get ahead of your competition and check out our blog post Customer Loyalty Trends That Will Define Success in 2023. 

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4) It boosts profits  

Customer loyalty is the bedrock of any business. The foundations of which are as only strong as the trust your customers feel towards your brand. A consistent, positive experience that keeps on improving and rewarding loyalty is essential in boosting profits. Customer loyalty programmes offer consumers a meaningful experience with brands. Eventually, this leads to loyalty and loyalty leads to value. Naturally, people want to protect and support what they value.  

Which is why:  

  • 63% of customers are willing to modify their spending with a brand to maximise loyalty rewards and benefits   

  • Statistics show 54% of a company’s customer base increase spending when they’ve got access to a Loyalty Rewards Programme

  • Loyal customers spend on average 31% more than new customers

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5) It retains customers  

More companies prefer a balanced focus of customer acquisition and retention. Whilst it’s diligent and practical to have some degree of a customer experience planned before you take customers on, acquisition will realistically take precedence earlier on in most businesses. 

However, acquisition alone could cost you up to 25 times more than retaining customers. Hence the importance of investing time into producing a customer journey map, designed to leverage touch points to maximum effect. 

Let’s take a look at some numbers. 

  • Companies with loyalty schemes see an increase in customer retention of up to 78% (Bond)

  • An overwhelming 82% of companies agree that retention of customers costs less than acquisition of new customers

  • An increase of 5% in customer retention could yield a 25% increase in profits! 

Customer loyalty significantly boosts the customer lifetime value over the long term.  


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6) Loyal customers become brand advocates 

Customer loyalty programmes are a great way of earning the trust of new audiences via your very own brand advocates or ambassadors. People love to be the source of good information. 

How does it feel when one of your recommendations is validated by a loved one or friend? 

Thinking of it from this perspective certainly helps understand the incentive behind brand advocacy. But the numbers below will demonstrate why it’s important to businesses! 


  • Your potential organic reach with each advocate significantly improves. For example, 10 advocates = a reach of 6,000

  • 90% of consumers will trust a brand recommended by a friend

  • 84% of B2B buying starts with a referral

Brand loyalty opens opportunities to invaluable marketing strategies for businesses. Word-of-mouth, social media and referral marketing are ultimate examples of social proof and testimonials. Endorsements are hugely important for businesses that want to be the article. 

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Key takeaways 

Customer loyalty is more than regular faces or repeat purchases. It’s about connection with consumers. Understanding that they want to align their own story with your brand. Giving them something more than just a top quality product or service. A business that performs marketing strategies with customer loyalty at the forefront of priorities, automatically sets itself up for long lasting success. 

Hopefully now, armed with just some of the statistics and sources we’ve shared, you should be able to: 

  • Demonstrate the importance of customer loyalty to decision makers 
  • Effectively switch to a balanced focus of customer acquisition and retention
  • Understand what customer loyalty is and why it is important. 

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