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Improving Customer Loyalty by measuring experience across the journey

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Customer loyalty refers to the act when customers choose one company’s products over competing brands repeatedly. Loyal customers are not swayed by prices or availability of similar products from competitors and would rather pay more or wait for the brand of choice. This article covers the importance of customer loyalty, how to increase customer loyalty by improving interaction experience, product experience, and brand perception. The importance of providing a highly personalized customer experience as a means of increasing customer loyalty is also discussed.

Why is Customer Loyalty paramount?

Customer loyalty has an impact on almost all metrics that are important for running businesses. Without satisfied customers, your business will have a hard time surviving. Building a new clientele costs more money, time, and effort as compared to retaining the old loyal ones. Thus, creating a loyal customer base is critical for success. Let’s take a look at what studies have to say about customer loyalty:

  • Studies have found that increasing customer retention practices by just 5% increases profits for businesses by 25 to 95%!
  • Customers who have been referred to your brand by loyal customers have a lifetime value of about 16% more than non-referred customers. 
  • Companies that have formalized referral programs have made 86% more in the past two years as compared to the rest!
  • Around 83% of customers state that they would recommend brands they trust. Thus, gaining trust from your customers not only increases your repeated business but also gets new customers. 
  • Combining all of the above points, we can say that disloyal customers cost 25-50% of growth for brands they don’t trust.

How to increase Customer Loyalty?

According to Gerald Zaltman, Harvard Business School Professor, around 95% of purchasing decisions are driven by emotions. Brands should know how to communicate, resonate, and connect with their customers emotionally. According to Gartner’s report, even after creating differentiated as well as innovative customer experience (CX) strategies, around 70% of CX leaders struggle to implement them. As per the report by Gartner, interaction experience, brand perception, and product experience drive customer loyalty. 

  • Interaction Experience: Improving interaction experience refers to knowing how to provide ease of navigation, purchase experiences, as well as reduce the anxiety customers may face when interacting with your brand. Be proactive in receiving feedback from your clients whenever you get an opportunity. You can do this by using sample or personalized surveys offered by Voxco. Getting feedback from your customers helps them gain their voice. The surveys could include asking customers about the quality of their experience, i.e., how easy was it for them to interact with the company (in-store or online). You could also gauge how convenient it is for customers to interact with your brand, how personalized their experience was, as well as the uniqueness attached to the interaction. These surveys will help you know if you’ve uncovered something about the interaction experiences of your customers that may have been a blindspot earlier. 
  • Product Experience: Product experience makes or breaks your brand. As a provider, it is your job to deliver products that make the customers’ life easier than it was before. To acquire this information, you can send them surveys after they have made a purchase or interact with them on how much your product/service helped them. You can also note the reactions of customers whenever you are launching a new product or a feature. It also helps you understand what your target audience likes or dislikes and helps you offer better services that are meaningful to them. As shown in the figure below, you can identify key areas of product experience such as the utility of the product, usability, whether the product aligns with the needs of the customer, and if and how it has enriched their lives.
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  • Brand Perception: If you have a positive Brand Perception like Apple, half of your task in creating quality customer experiences is done! Your brand should be aligned with the vision you have for your company. Customers should know that your brand is here to create a difference. Your brand should also be aligned to the values you hold. If you believe in the importance of personalized customer experiences, but you are not providing it, it is going to reflect badly on your brand. You can use social media polls asking them to rate your interaction with them, what do they like the most about their brand, and to suggest any other improvements they would like to experience from your end. 

Personalized Customer Interactions:

If there is one thing that unites customers, it is their love for personalized experiences. When this is executed well, it sets your brand apart and also helps you gain a competitive advantage

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  • Collect Quality Consumer Data: Data is everything! Now, it is extremely important to only collect the data that is relevant for your business and brand as it can help you grow. Thus, ask for information that can be useful to improve the interaction process.  Once you have enough information about your customers, you can add value to personalized recommendations based on their responses. For instance, you can provide product discounts on relevant products that you know will suit the customers that have specific skin types. The point is; you don’t need to know everything about your customers to understand them. You only need to know enough to improve your interaction and importance in your life. The key is to collect necessary information without being intrusive. Use open-ended questions in your surveys to get in-depth insight. You can pair these questions with NLP-aided analysis. This is, so you get an in-depth understanding of each individual customer’s needs and desires and respond to them in accordance to the same.  
  • Prioritize Reducing Effort: Customer effort score (CES) is a proxy measurement of customer loyalty. It helps you gather information on the pain points of customers when interacting with you. In essence, it answers how much effort customers have to take while interacting with you. If you cannot use the collected data to reduce customer effort, you’re doing it wrong. One example of reducing customer effort is by compiling the metadata available to you about your customers into various systems. This will reduce their effort of filling in all the information that they have provided to you before and reduce their effort of interaction. Your contact center teams must have basic information such as personal information, contact details, spending habits, and location with them and should use it to make the customer service process easier as well. Having personalized and unique customer experiences are key to gaining customer satisfaction and improving their trust in your brand. Most customers prefer to do business only with brands that induce feelings of trust and care.

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This post is also available in French.