3 Ways to Improve Your Customer Loyalty Index


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Customer loyalty is a very important factor for every business. It is also one of the most difficult to measure. Many factors play a role in customer loyalty and there are different ways that it can be defined.

After years of careful research, marketers have determined that the customer loyalty index is one of the most effective. It considers a variety of other metrics, such as customer retention, upselling ratios and your net promoter score. While assessing their customer loyalty index, many brands discover that there is a lot of room for improvement.

customer loyalty

It is important to understand the variables that influence this metric. This will hope you figure out how to improve it.

Take regular steps to boost customer retention

Finding new customers costs up to 25 times as much as maintaining existing ones. You need to continually focus on strengthening your relationship with existing customers. There are a number of ways to achieve this goal:

  • Encourage all existing customers to join your email list for timely opportunities.
  • Reach out to customers that you haven’t heard from in a while to touch base.
  • Conduct regular surveys to see how your customers feel and what you can do differently.
  • Offer special discounts and promotions to long-standing customers.

Improving your ratio of repeat to new customers will also help increase your customer loyalty index.

Find out why more customers are willing to recommend your brand

Your net promoter score is another one of the main factors that goes into the customer loyalty index. What is your net promoter score and how can it be improved?

In a nutshell, your net promoter score is the number of customers that are highly likely to endorse your brand, relative to the detractors that are unlikely to recommend you to another customer. Here is how your net promoter score is measured.

You begin by conducting a survey asking customers how likely they are to endorse your brand. The survey is rated on a scale of 1 to 10.

When you are waiting the results of the survey, you want to see how many customers have a very strong likelihood of recommending your company. These are the customers that shows a nine or a 10 on the scale. They are known as your brand promoters.

People that only selected a seven or eight are considered passive customers. They aren’t likely to actively promote your brand, but they won’t detract from it either.

Anybody that chooses a value between one and six on the survey is considered a brand detractor. They are more likely to discourage other customers from doing business with you, even if their own perception of your brand is slightly more positive than negative. This is why even customers that select a six on the survey or considered detractors. When their friends ask them for feedback, they aren’t going to be encouraged to hear that they have a slightly positive experience with your brand. Even modestly satisfied brand detractors are probably considering doing business elsewhere, which is likely to be off-putting to their friends.

When most companies conduct net promoter surveys, they don’t ask for reasons that they aren’t likely to recommend your service. Some of the reasons could be obvious, such as subpar service or slow delivery times. However, the reasons could also be more unexpected. Perhaps some of your loyal customers realize that they have unique tests and may not feel that their friends would share their perception. You need to ask leading questions to get to the heart of the issue.

Improve your upselling strategy

One of the factors that plays a role in your customer service index is your ability to upsell existing customers. How effectively are you to encourage customers to purchase a different, higher ticket product?

If you are having trouble with upselling, then there is probably an issue with your marketing and customer service models. You need to figure out where the breakdown has occurred. You must also train your customer service team to help customers know when new products may be more beneficial. If the lower ticket product or service they chose lacks the necessary features, they should inform them about other models that offer what they need.

This will boost customer loyalty and increase your upselling ratio. Since the upselling ratio is an important element of your customer loyalty index, improving it will indicate that your overall customer loyalty rate has increased as well.

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