a man and a woman looking at a computer screen

What makes a loyal customer?

A loyal customer is someone who has an ongoing positive relationship with your business. Customer loyalty drives repeat purchases and builds trust so your business is the one they choose over a competitor that has similar products or offerings.  

Loyal customers are more than just happy or delighted ones – they feel valued, appreciated and respected.

But according to Gartner’s 2023  CMO Spend and Strategy Survey,  only 21.3% of total marketing channel spend is focused on driving loyalty and advocacy compared to other stages in the customer journey.1 That doesn’t mean that allocation is the right one for your business – even Gartner shared that the allocation should be aligned to your goals.  

We know that customer acquisition costs are increasing, so finding opportunities to gain new customers but also focus on customer retention and loyalty is imperative in 2024. I predict that percentage of spend will be higher in the next few years.

Let’s look at the value of a loyal customer and how Optimizely can help you strengthen your customer connections.  

What’s the value of a loyal customer?

There are the obvious answers: repeat purchases (often higher spending) and engagement. But there’s also the intangibles

In the world where we lean into social media more than ever, we care what others think – and that drives our emotions in buying. In a world where CAC is increasing, that peer influence can be a simple and organic way to grow your business – it’s like the ‘word of mouth’ from the good ‘ol days. And yes, I’m experienced enough to say that!

Loyal customers who trust you are the best focus group you’ll have. They're more open to trying new products or offerings, and tend to give you grace if they aren’t quite up to par just yet.  

Tips on building loyalty

1. Listen to and learn from your customers 

This isn’t just a standard open-your-ears situation. Use data to listen and learn how your customers are interacting with your business. For online data, use first-party data captured directly from the customer. With the deprecation of 3rd party cookies in the near future, it’s imperative to engage directly with customers to be able to effectively advertise or personalize to them. 

The data captured should come together in a customer data platform to allow you to get a holistic understanding of your customers.  

Then, use that understanding to drive improved experiences for the customer as they work with you – that may be online, in store, or on a customer service call.

2. Review your customer’s journey

I’m not just saying review the journey from a business standpoint. Put yourself in the customer’s shoes and look for what influences their perception about or value of your products and services.  

Once you’ve identified those critical points, make sure you can collect metrics to measure against them.  

3. Demonstrate that you know your customers

Personalize the experience. This could be through attributes and showing content or imagery based on location (i.e. Minnesota in winter should have snow!). It could be through providing product recommendations based on behaviors or allowing the customer to pick up where they left off when shopping previously. The more first-party data you have, the better you can personalize the experience.  

We're all involved in loyalty programs – it might be for reduced flights with an airline or a free coffee from our favorite coffee shop. Personalization and loyalty programs give something back to the customer, whether that’s offering target discounts, helping customers find information and products faster, or creating an experience that’s frictionless so the customer gets extra time back in their day. A business that does this well is more likely to succeed.  

What metrics help you measure success?  

It’s important to think beyond just measuring repeat revenue or NPS scores when it comes to defining success in customer loyalty. Gaining customer loyalty is a long tail game that requires taking a broader view of metrics.  

Additional key metrics may include: 

  • Customer retention rate
  • Customer lifetime value (CLV)
    • Average order value X Avg # transactions X Time as customer = CLV
  • Engagement rates  
  • Churn rates
  • Customer satisfaction score (CSAT)  

These additional metrics can give you a more holistic view of your customers and their behaviors, so you can adapt and tailor their experiences more effectively.  

How can Optimizely help business build loyal customers?  

Optimizely One is focused on giving customers flexibility to compose a system that works for their team with the simplicity of an elegant, easy-to-use, and fully integrated suite. Our content management, commerce, and experimentation solutions help businesses deliver great experiences that drive customer loyalty.

Optimizely Data Platform (ODP) unifies data to power personalized and targeted customer experiences, so you can drive customer loyalty and increase conversions.  

When it comes to building loyalty, Optimizely Data Platform (ODP) will help you and your team:  

  • Listen to your customers and gain valuable insights on their behaviors, interests, and demographics with first party data.  
  • Increase customer engagement with real-time segments – personalize content for select audiences with custom groupings of website visitors based on their actions on your website.  
  • Stay agile and responsive to market and customer trends using targeted segments in experimentation to test and improve content, promotions, or discounts. 
  • Integrate third-party tools in one click, like Loyalty Lion, Salesforce CRM, Salesforce Marketing Cloud, and more into ODP to further build out customer profiles.

If customers don’t feel valued, they move on and shop elsewhere. Take advantage of your time with them - find ways to connect and deliver the frictionless experience they desire. 

In 2024, customer loyalty should be a part of every business strategy. Is it a part of yours?


1 The State of Marketing Budget and Strategy in 2023 — Insights from the CMO Spend and Strategy Survey (Gartner, 19 May 2023)