Customer loyalty might seem like an intangible quality that can’t easily be quantified but this is not the case. There is a range of metrics that enable organisations to measure and track the many elements that go into making up customer loyalty.
Net Promoter Score (NPS)
A Net Promoter Score (NPS) is a powerful metric that can indicate someone’s willingness to share positive sentiments about the organisation with others. Positive word of mouth is a powerful marketing tool, so a larger NPS is desirable.
Measuring customer satisfaction will also provide a valuable metric on how well the organisation is meeting the needs of customers when providing goods and services. This can help show areas of strength as well as those places that need to be improved when it comes to customer interactions.
Customer retention and repeat purchases
Understanding what proportion of customers are new and what are repeat customers will provide an insight into whether the business holds on to customers or not. Given loyalty is a willingness to continue to engage, this provides a valuable measure of the strength of loyalty expressed in repeat engagement.
Similarly, measuring engagement can provide an insight into the interest and enthusiasm customers have for the brand or the business, and this level of interest is an expression of loyalty. Without any sense of loyalty, many customers are likely to quickly lose interest.
Customer Loyalty Index
A customer loyalty index is a more standardised way of measuring loyalty. Based on surveys, it utilises customer responses to the questions to develop a measure of loyalty that reflects intent to re-engage.