Meta title: What Is Customer Loyalty and How to Measure It | myPOS

Meta description: Learn how to measure, build and maintain customer loyalty with key metrics, proven strategies and tools like loyalty programmes and seamless payments. 

Meta title: What Is Customer Loyalty and How to Measure It | myPOS

Meta description: Learn how to measure, build and maintain customer loyalty with key metrics, proven strategies and tools like loyalty programmes and seamless payments. 

What Is Customer Loyalty and How to Measure It

Customer loyalty is a long-term commitment driven by positive experiences with your products, services, support, or staff. It’s built through consistent, trustworthy interactions that encourage customers to return instead of switching to competitors.

Ongoing customer loyalty drives business growth. Loyal customers make repeat purchases, which increases revenue. They also act as brand advocates, spreading positive word-of-mouth. What’s more – retaining existing customers costs far less than acquiring new ones, making loyalty one of the most efficient growth strategies.

But how does a company retain customers? The answer lies in building and nurturing customer loyalty through a dedicated, consistent strategy.

Why Is Customer Loyalty Important for Businesses?

Customer loyalty comes with distinct advantages for businesses. Below, we mention a few key benefits of building it and some examples of customer loyalty in action.

Key benefits of building customer loyalty

Just some of the benefits of customer loyalty include:

• Loyal customers spend more over time (higher customer lifetime value).
• Cost-effectiveness: Retaining existing customers is cheaper than acquiring new ones.
• Positive word-of-mouth: Satisfied customers become brand advocates.
• Increased customer retention rate improves long-term business stability.

All these are very good reasons to establish a customer loyalty programme and to focus your business efforts on customer retention that is driven by trust and positive memorable experiences.

Examples of customer loyalty in action

If all this sounds a bit vague so far, don’t worry. Here are just a few examples of customer loyalty in action so that you can get an idea of what it takes to build customer loyalty:

• Retail businesses offering rewards to repeat customers;
• Cafés or small shops with loyalty stamp cards for frequent visits;
• Online businesses offering exclusive perks for loyalty programme members.

These are some ideas of relevant approaches to build customer loyalty. The right one for your business will depend on the nature of your operations, your products and/or services and your ultimate business goals.

Types of Customer Loyalty

Customer loyalty may be considered a broad umbrella term. But underneath that umbrella are several different types. Let’s explore some of these in more detail.

Emotional loyalty

Emotional loyalty reflects a psychological bond: customers stay because they feel connected to a brand’s identity, values, or purpose – not just for perks. This type of loyalty has stronger resilience in price competition and drives advocacy and lifetime value. 

According to loyalty program analytics, customers with an emotional connection bring 306% higher lifetime value than unconnected ones. In the UK, the drive for emotional loyalty is rising: the DMA (UK’s data & marketing association) argues that emotional loyalty, or “loyalty without reason”, boosts retention and counters churn.

To build this, brands must go beyond points: they should embed recognition, personalization, values alignment, and brand stories into every touchpoint. Emotional loyalty should be the north star, with transactional incentives as extra strategic features, not the core.

Transactional loyalty

Transactional loyalty is grounded in tangible value in the form of discounts, points, offers, or rebates. It’s strong when these rewards are compelling and visible. 

In the UK, loyalty scheme penetration is very high: 80% of consumers actively engage in at least one loyalty program. What’s more – more than half (56%) of UK adults say they’d be more loyal if rewards were offered.

However, a deeper research in UK retail banking finds that financial and procedural switching costs (i.e. purely transactional levers) often have no significant effect on loyalty – relational switching costs and trust drive deeper loyalty instead. 

Transactional programs must therefore be well calibrated: too weak and they don’t bind; too costly and they erode margin.

Behavioural loyalty

Behavioral loyalty happens when customers buy out of habit, not emotional connection or rewards. It often stems from convenience, routine, or lack of better alternatives.

In UK retail and service sectors, behavioral loyalty is often observed through “default” providers or repeat purchases simply because switching feels effortful or unnecessary.  Data shows that inertia persists most clearly in essential services: for example, around 40% of broadband customers (≈8.7 million) are out of contract, typically paying more than in-contract customers. This is a classic “set-and-forget” behavior that continues until a disruption forces reconsideration.

To win behavioral loyalty, focus on ease and consistency: fast checkout with no queues, nearby locations, reliable stock, and smooth app experiences. Then, disrupt routines in your favor – offer timed delivery slots or one-tap reorders. Habit is powerful, but it breaks quickly when convenience slips.

How to Measure Customer Loyalty

Measuring customer loyalty is essential if you want to understand not only how satisfied your customers are, but also how committed they are to returning and recommending your business. 

Unlike customer satisfaction, which captures short-term experiences, loyalty looks at long-term behaviours and relationships. The good news is that loyalty can be quantified through a range of metrics, behavioural insights, and digital tools.

Key customer loyalty metrics

Some of the key customer loyalty metrics that you need to pay attention to include:

• Customer Retention Rate (CRR): This metric shows the percentage of customers who stay with your business over a specific time period. A high retention rate usually signals that customers are happy and see consistent value in your brand.

• Repeat Purchase Rate (RPR): Loyal customers tend to buy more than once. This metric tracks how many of your customers make repeat purchases, providing a clear view of buying habits and loyalty trends.
• Customer Lifetime Value (CLV): CLV estimates the total revenue you can expect from a loyal customer over their entire relationship with your business. It’s a crucial metric for understanding the long-term financial impact of loyalty.
• Net Promoter Score (NPS): The NPS measures how likely customers are to recommend your business to others. This is typically collected through a simple survey question: “How likely are you to recommend us?” High scores suggest strong loyalty and advocacy.
• Customer Loyalty Index (CLI): The CLI combines several indicators (such as repeat purchase behaviour, referral likelihood and NPS) into a single measurable score. It gives a more comprehensive overview of loyalty.
• Customer Effort Score (CES): Loyalty often depends on convenience. CES measures how easy it is for customers to interact with your business, whether it’s making a purchase, resolving an issue or accessing support. The lower the effort required, the stronger the potential for loyalty.

Measuring and keeping track of these metrics is essential if you want your business to strengthen its customers’ loyalty and enhance overall returns.

Tracking customer behaviour

Beyond direct metrics, customer behaviour provides valuable insights into loyalty. For this purpose, you can analyse purchase frequency, average transaction values and referral activity to spot patterns. 

Equally important is monitoring engagement. Metrics such as social interactions (likes, shares), review volume and sentiment, email open and click rates, and app session depth help track attitudinal loyalty. 

For example, in hospitality, integrating your POS with loyalty systems provides real-time insights into customer preferences and response to promotions. EPOS data captures order history, peak visit times, and favorite items. When linked to loyalty redemptions, it helps identify shifts in customer behavior.

Tools for measuring customer loyalty

Accurately tracking loyalty requires the right technology: 

• CRM systems allow you to record customer interactions and build detailed profiles.
  
• Point-of-sale (POS) systems and card machines capture purchase history and patterns in real time.
  
• Analytics tools such as Google Analytics and NPS software help you track engagement and feedback across multiple channels.

By combining these solutions, you can build a clear picture of customer loyalty and take proactive steps to strengthen it.

Strategies to Build and Increase Customer Loyalty

Customer loyalty isn’t built overnight. Rather, it’s the result of consistent value, excellent service and meaningful engagement. 

By implementing the right strategies, your business can not only retain its existing customers but also turn them into brand advocates. Below are some proven ways to strengthen customer loyalty.

Implement a customer loyalty programme

Loyalty programmes incentivise repeat purchases and encourage customers to choose your business over competitors. 

Different approaches work for different industries:

• Tiered loyalty programmes: Customers unlock greater rewards as their spending or visits increase, creating a sense of achievement.
• Points-based programmes: Customers earn points for each purchase, which they can redeem for discounts, products or services.
• Referral programmes: Reward customers for recommending your business to friends or family, combining loyalty with new customer acquisition.

For example, many coffee shops offer free drinks after a certain number of visits. This is a simple but effective way to keep customers coming back.

Focus on excellent customer service

Loyalty rises when service is fast, fair, and personalised – and the data is clear. In the UK, 75% of consumers say they’re encouraged to make a repeat purchase when a complaint is handled well.

To build loyalty through service, businesses should focus on:

• Personalised attention: Remembering a customer’s preferences (e.g., dietary needs in restaurants, room preferences in hotels) builds recognition and trust.
• Proactive problem resolution: Effective complaint handling directly drives repeat business; service-recovery practice confirms that well-handled issues can transform detractors into promoters (the “service recovery paradox”).
• Flexible and frictionless payments: 34% of adults use mobile contactless monthly, while cash fell below 10% of payments in 2024. Businesses that don’t offer modern card machines, Apple/Google Pay, or BNPL risk losing customers at checkout.
• Omnichannel responsiveness: In 2025, UK consumers expect seamless support across email, phone, live chat, and social media. Quick, consistent responses signal reliability.
• Empowered frontline staff. The service-profit chain shows that engaged employees deliver better service, which in turn drives loyalty and growth. Investing in training and empowerment pays back in retention.

Put shortly, excellence in service is no longer a “nice to have” but a core loyalty driver. Excellence in service is no longer a “nice to have” but a core loyalty driver.

Reward and recognise your most loyal customers

Recognition elevates loyalty from transactional to relational. When customers are acknowledged for their loyalty, it deepens emotional investment and encourages advocacy. 

You can strengthen loyalty by:

• Exclusive perks and experiential rewards: Offer benefits beyond discounts – VIP access, first dibs, limited editions, or experiential upgrades. Research suggests that special or “extraordinary” rewards enrich the consumer–brand relationship more than mundane ones, by triggering self-expansion and deeper brand identification.
• Thank-you gestures and notes: A randomized field experiment published in the Journal of Marketing found that handwritten notes positively and significantly boost customer spending relative to no note. In marketing practice, many brands report that thank-you notes yield high ROI in retention and word-of-mouth engagement.
• Tiered recognition and status signals: Elevate top customers by recognizing status (e.g., “Gold / Platinum / Elite”) with visible indicators. This taps into social identity and status-driven motives. Status and recognition differentiate programs that rely merely on discounts. 
• Flexible redemption and personalization: Let long-term customers choose how to use perks such as discounts, gifts, or experiences. IModern and successful loyalty programs deliver flexible benefit mixes beyond discounts to increase perceived value. 

Done well, recognition compounds over time, converting your most loyal segment into a core profit engine and a powerful source of word-of-mouth growth.

Enhance the customer experience

Enhancing the customer experience is less about grand gestures and more about carefully removing pain points and making every interaction feel intuitive.

For example, when businesses prioritise modern payment solutions – embracing contactless, wallet integration, and fast card machines – they reduce the “pain of paying,” a behavioral-economics phenomenon wherein transactions generate psychological cost. That’s how smoother payment flows boost satisfaction and reduce abandonment.

In the context of eCommerce, keep in mind that UK shoppers are the ones most likely to abandon baskets due to poor checkout experience. In fact, 44% of them cite a cumbersome process as a primary reason for abandoning their cart. To battle this, you can simplify your online checkout flows, minimize required fields, accept saved payment data, and do a regular monitoring of core payment functionalities of your website. 

But the experience extends well beyond transactions. For example, retailers and hospitality brands can strengthen loyalty by offering seamless omnichannel journeys, where online browsing, app ordering, and in-store pickup connect without friction. A smooth returns process also matters; easy refunds or exchanges encourage repeat visits, even after a poor experience.

The formula is straightforward: eliminate unnecessary friction, anticipate needs, and make interactions intuitive. UK consumers increasingly expect this – and reward the brands that deliver it with loyalty.

Engage customers through content and marketing

Customer engagement is what sustains loyalty between purchases. Well-designed communication keeps your brand top of mind while reinforcing the relationship. 

In the UK, email remains one of the highest-ROI channels – between 3,600% and 3,800% ROI when targeted and personalised. This means loyalty offers, birthday messages, and early access campaigns delivered via email can directly boost retention and spend.

Social media plays a parallel role, particularly with platforms like Instagram and TikTok where stories, live sessions, and customer shoutouts humanise the brand.

Beyond digital, experiential marketing cements community ties. Hosting pop-up events, in-store activations, or contests encourages participation and generates shareable content. For example, Google Pay UK ran a pop-up product experience activation at three major UK universities, where brand ambassadors educated students on using the app. Over 42% of participants converted (i.e. they downloaded Google Pay) during the event. 

The principle is clear: loyalty grows when customers are not just buyers but participants in the brand story.

Encourage customer feedback and act on it

Listening to your customers builds trust and shows you care about their experience. You can collect feedback through surveys, reviews or direct communication. And, importantly: act on it. You can even reward customers for their input with discounts or small perks, reinforcing the value of their opinions.

By combining these strategies, you can create lasting relationships that go beyond simple transactions and turn one-time buyers into loyal brand ambassadors.

How to Maintain Long-Term Customer Loyalty

Building customer loyalty is only the beginning. However, sustaining it over the long term requires ongoing effort and a customer-first mindset. Businesses need to go beyond one-off strategies and focus on consistently delivering value, nurturing emotional connections and staying relevant.

Here’s how you can ensure your customers remain loyal for years to come.

Consistently deliver value

At the core of long-term loyalty is the ability to deliver consistent value. Customers return when they know they can rely on your business for high-quality products, dependable services, and trustworthy interactions. If your offering doesn’t live up to expectations, even the most carefully designed loyalty programme won’t be enough to keep customers coming back.

This begins with maintaining high standards for your products and services. Quality control, regular improvements, and listening to customer feedback all ensure that what you deliver aligns with what customers expect. Beyond the product itself, consistency in your brand messaging is equally important.

Build emotional connections with customers

Loyalty is not only rational. It’s also emotional. Customers are more likely to stay loyal to brands they feel connected to on a personal level. One of the most effective ways to build this connection is by sharing your business story. Whether you’re a family-owned shop, a fast-growing start-up or a local café with roots in the community, telling your story helps customers see the people behind the brand.

Equally important is demonstrating values that resonate with your audience. Businesses that engage in community initiatives (such as sponsoring local events, supporting charities or contributing to sustainability efforts) show customers that they stand for more than just profit. 

When customers see that their values align with yours, they feel an emotional bond that keeps them loyal even when competitors try to win them over.

Stay competitive and innovative

Markets don’t stand still and neither do customers. What excites them today might feel outdated tomorrow. That’s why staying competitive and innovative is critical to maintaining loyalty in the long term.

Start by closely tracking market trends and competitor activity. Are others offering faster delivery, new services, or easier payment options? If you fall behind, even loyal customers may look elsewhere. Stay proactive and adapt before customers realize their needs have changed.

Innovation doesn’t always mean big, disruptive changes. Sometimes it’s about introducing small improvements that make your customers’ lives easier. This can range from adding new digital payment options or modern card machines to launching a fresh loyalty reward or testing seasonal promotions. Even minor updates can show that your business is evolving with customer needs.

Finally, don’t overlook the need to update your loyalty initiatives. A basic points program may work initially, but over time, it needs variety to stay effective. Adding tiers, referral incentives, or exclusive rewards helps keep customers engaged. The goal is to keep loyalty fresh by making offers and experiences relevant and appealing.

Benefits of Measuring Customer Loyalty

Measuring customer loyalty gives you a clear strategy for improving customer relationships and driving sustainable growth. For example, a high retention rate may show that customers value your product quality, while a low NPS could highlight issues in customer service. These insights allow you to make targeted improvements rather than relying on guesswork.

Another key benefit is resource allocation. Marketing budgets are often limited and measuring loyalty helps you focus on strategies that have the greatest impact. Instead of spending broadly, you can focus on initiatives that encourage repeat purchases, referrals and customer advocacy to maximise your return on investment.

Customer loyalty also directly translates into growth. Retaining loyal customers is generally more cost-effective than constantly acquiring new ones and loyal customers tend to spend more over time. This not only stabilises revenue but also increases profitability.

Overall, measuring customer loyalty isn’t just about understanding where you stand. It’s about building stronger relationships and making smarter decisions.

Role of Payment Systems in Customer Loyalty

Payment systems can actively help build and maintain customer loyalty. 

Here is how:

• Convenience in payments: Offering card machines that accept a wide range of payments (contactless cards, mobile wallets and digital methods) reduces friction and keeps customers satisfied. When payments are simple and secure, customers are more likely to return, knowing they can pay how they prefer without delays or complications.
  
• Integrating loyalty programmes with payment systems: Modern point-of-sale (POS) systems and card machines can track transactions and link them to loyalty programmes. This integration, which myPOS offers, allows customers to automatically earn points, rewards or discounts with every purchase, without needing extra steps like showing a loyalty card or app.
  
• Solutions such as personalised gift cards can also be tied into your payment and loyalty ecosystem, making it easy to reward loyal customers or encourage them to share your brand with others.
  
• Using customer data for personalisation: Payment systems reveal insights into habits like purchase frequency, average spend, and product preferences. By analysing this data, businesses can offer tailored rewards and incentives. For example, if a customer regularly buys a specific item, you can send them an exclusive discount or early access to new stock.

This approach makes customers feel recognised and valued, which strengthens emotional connections and encourages repeat purchases. Over time, these personalised touches can turn casual shoppers into long-term loyal customers.

Conclusion: Turning Satisfied Customers Into Loyal Advocates

Ultimately, customer loyalty refers to much more than repeat purchases. It’s about building trust, delivering ongoing value, and creating consistently positive experiences. 

When you actively track customer loyalty, you gain valuable insights into how happy customers interact with your business, allowing you to refine marketing strategies and better serve your existing customer base. 

Long-term success comes from combining the right tools and tactics. With myPOS, you can power your customer loyalty management by integrating a rewards programme or successful loyalty programme directly with your card machines and POS system. This makes it simple to entice customers to return and reward members automatically when they pay by card. 

Effective customer loyalty marketing becomes easier when you have the right data. myPOS helps you analyse purchasing trends that strengthen brand loyalty and promote customer loyalty organically. Over time, these strategies help you build it in such a way that turns one-time buyers into lifelong customers who advocate for your brand and bring in more customers through referrals.

Frequently Asked Questions

What is an example of a loyal customer?

A loyal customer is someone who repeatedly chooses your business over competitors, even when alternatives are available. For example, a customer who always buys their morning coffee from the same café, recommends it to friends and continues visiting even if another café offers discounts demonstrates loyalty. 

What are the 4 Cs of customer loyalty?

The 4 C’s of customer loyalty are: convenience, consistency, communication, and customisation. Together, these factors help businesses build lasting relationships that go beyond one-off transactions.

What are the 3 Rs of customer loyalty?

The three R’s of customer loyalty are retention, related sales, and referrals. Retention keeps existing customers engaged. Related sales drive repeat or additional purchases. Referrals turn loyal customers into advocates who bring in new business.

What is a customer loyalty strategy?

A customer loyalty strategy is a planned approach businesses use to encourage repeat purchases, long-term relationships, and brand advocacy. This may include loyalty programmes, personalised offers, exceptional customer service, and rewards for referrals. 

What is the customer loyalty cycle?

The customer loyalty cycle describes the stages a customer goes through before becoming loyal. It typically begins with awareness, followed by the first purchase, satisfaction with the product or service, repeat purchases, and eventually advocacy. 

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