A satisfied customer does not necessarily mean a loyal customer. This is a lesson that many businesses learn the hard way. 83% of customers consider exceptional service to be the most important criterion when deciding where to buy (Khoros), and 80% abandon a brand after just two negative experiences (Qualtrics).
The good news is that genuine loyalty can be cultivated if you understand what makes it work. It’s not about loyalty programmes and holiday discounts; it’s about turning occasional customers into brand ambassadors who promote your business without you having to ask.
So, what does loyalty really mean?
Many leaders and entrepreneurs confuse 3 completely different things: satisfaction, retention and loyalty. It’s like saying that someone who comes to you because you’re the closest option really loves you, without considering that they might just not want to go any further.
Satisfaction is the immediate reaction after the customer buys something from you. ”I got the product quickly; it’s OK, I’m satisfied.” This is great, but satisfaction is fragile: your satisfied customer will choose the competition if they find a better price elsewhere.
Retention measures whether people remain your customers. This sounds good, but the problem is that someone may be a customer out of inertia. This may be because change is too complicated, or because they simply forgot to cancel their subscription. They are a ‘hostage’ customer, not a loyal one.
Loyalty is something else entirely. A customer who buys from you multiple times is not necessarily loyal. It may have been convenient for them, or they may not have had time to look for something else. Loyalty is when a customer consciously chooses to stay with you, even when cheaper or faster options are available. It’s an emotional connection that makes your brand their first choice, rather than their last resort or the most convenient option.
Satisfaction is a one-time reaction. Retention, on the other hand, is a measure of continuity. Loyalty is a relationship. It’s the feeling of wanting to stay that comes from trust, not a lack of options. If you fail to differentiate between these concepts, you risk developing strategies that merely keep customers temporarily, rather than turning them into advocates.
The Nuances of Loyalty: From "it Works" to Devoted Fans
Not all customers who buy repeatedly are equally loyal to your brand. Some are loyal only because of the price; if they find a better deal tomorrow, they’ll leave. Others are ‘loyal’ because your store is close to home, or because they have accumulated points in the loyalty programme.
Truly loyal customers are different! They not only come back and spend more, but also actively promote your brand. They recommend you to their friends, defend you when you are criticised, and offer constructive feedback because they want to see you succeed. They are not just consumers, they are partners.
Loyalty has nuances. It can be convenient, rational or emotional. The most valuable type of loyalty for a company is emotional loyalty, which comes from a personal connection with the brand. This is where advocacy comes in: when customers not only buy from you, but also promote your brand without being asked.
Why Investing in Loyalty is Worth it
You get a lot for a little
Loyalty isn’t an added bonus; it’s a business strategy. Attracting a new customer is costly: advertising, campaigns, promotions and time spent on social media all add up. The probability of selling to an existing customer is 60–70%, whereas for a new customer it is only 5–20% (Marketing Metrics: The Definitive Guide to Measuring Marketing Performance).
Furthermore, loyal customers generate 41% of an e-commerce company’s revenue, despite representing only 8% of the customer base (Smile.io). Therefore, a small base of devoted customers can support almost half of a business.
But the benefits don’t stop at money. Loyal customers are much more tolerant of mistakes. 74% of consumers will forgive a company for a negative experience if they receive quick, empathetic assistance (Khoros). Paradoxically, they often become more loyal to the brand than customers who have never experienced any problems. A well-managed mistake can strengthen trust rather than destroy it. When people feel that you are on their side, they don’t just stay, they become supporters.
The relationship with loyal customers is more stable and predictable. With a loyal customer base, you can plan for the long term. You can test ideas and innovate without worry because you have their support.
Free marketing
Authentic recommendations are more powerful than any marketing campaign and they’re free! When people talk about you of their own accord, the message spreads further and is perceived as more credible. 60% of people trust recommendations from friends and family more than any form of advertising (Kantar). Organic marketing is the most effective form of marketing and ensures sustainable growth for any business.
Loyal customers become ambassadors for your brand. They don’t just buy; they talk about it, too. They give your brand visibility at no cost and help you build a reputation that money can’t buy. Your brand gets this free marketing just for being there when it mattered.
How to Build Genuine Loyalty
Customer service is the foundation
Loyalty starts with how you respond. Not with discounts, but with attention. Even if you have the best product on the market, if the customer experience is poor, loyalty will remain elusive. When a customer has a problem, how you solve it matters more than the quality of the product itself. According to HubSpot Research, 93% of customers are more loyal to brands that offer better customer service.
Exceptional service means being available on all the channels through which customers want to communicate with you, such as phone, email, chat and social media, and providing a consistent experience across all of them.
Good service is consistent, empathetic and proactive. It means anticipating problems before they arise. Don’t wait for people to complain; listen actively and offer solutions proactively. This is how you build trust and transform the relationship from transactional to partnership-based.
Personalisation is no longer optional
People want to be recognised. They don’t want to be seen as an ID in the system; they want to be seen as individuals with preferences, history and needs. Personalisation is about more than just putting their name in an email; it’s about offering relevant recommendations, tailored communication and respect for their time.
Customers expect brands to know what they have purchased, what they prefer and what they are looking for. Technology can help if used wisely. As personalisation becomes indispensable, artificial intelligence (AI) plays an essential role. According to Redpoint Global’s research, 73% of consumers believe that AI can improve their overall experience with a brand.
Of course, it’s important to strike the right balance. Customers are willing to share personal information if they know it is being used to make their lives easier. It is essential to be transparent about how you use the data you collect. When you handle data carefully and transparently, you build a relationship. It’s a fair exchange.
Loyalty programmes: don't launch them just to have one
This is where many companies fail. They launch a generic loyalty points programme and then wonder why it doesn’t work. A loyalty programme is an experience in itself. If it’s complicated with no real benefits, it’s ignored and unused. If it is relevant and accessible, however, it will be used.
Simplicity and immediate value are essential. If customers have to read a manual to understand how to accumulate and redeem points, the programme is doomed from the outset. Rewards must be attractive, straightforward to obtain and relevant to your audience.
Today, most companies prioritise real-time rewards and instant gratification to be successful. People no longer want to wait four weeks to collect points for a 10% discount. They want benefits immediately, either when they sign up for the programme or when they make a purchase.
Rewards must be clear, accessible, and useful. And don’t forget: loyalty cannot be bought, it must be earned. The programme is just a tool and does not replace the relationship and experience you offer.
Brands that do this exceptionally well
IKEA: offering utility and a valuable experience
IKEA doesn’t just offer discounts. It also provides access to workshops, priority support and a seamless online and offline experience. Its loyalty programme, IKEA Family, is simple yet effective. It demonstrates that IKEA’s products are not just furniture, but solutions for a better home life.
Loyalty is earned by empowering the customer. Rewards include not only special prices, but also value-added services that simplify everyday life, such as extended warranties, transport insurance, returns without a receipt, free coffee at the store restaurant, and shopping and wish lists. All of these services create a sense of security and long-term trust.
What’s more, IKEA turns customers into design partners. Through design workshops and access to educational resources such as guides and blogs, IKEA helps customers to personalise their space and become the architects of their own experience. Loyalty is reinforced by the feeling that the brand understands real needs and provides the tools to meet them, regardless of budget.
This relationship is built on utility, functional design and a shared vision of a more sustainable future. Customers become brand ambassadors because they want to showcase not only their purchases, but also what they have achieved with IKEA’s support.
5 to go: ritual, predictability and accessibility
5 to go has proven that customer loyalty can be achieved without complex loyalty programmes.
The coffee shop franchise does not have a formal programme; the concept itself is the loyalty programme. Although the price is low, the coffee is 100% Arabica, offering consistent quality regardless of location. With its fixed, affordable price, the brand has eliminated two major consumer fears: uncertainty over the price and wasting time. This creates functional loyalty based on predictability: customers know exactly how much they will pay, what they will get, and how long they will wait.
This has generated unexpected emotional loyalty among customers. Customers identify with the ideas of affordability and simplicity, turning a visit to 5 to go into a daily, frustration-free ritual. Loyalty cannot be bought with rewards or status; it is earned by respecting customers’ time and budgets and generating immediate, repeatable satisfaction.
In this case, loyalty is built from a sense of control, comfort, and accessibility. It is a relationship based on trust, speed and consistency in delivering a simple promise, which customers consistently recommend.
Sephora: community, status and belonging
Sephora’s “Beauty Insider” programme recognises a fundamental truth of the beauty industry: people don’t just buy products; they buy aspiration and belonging.
The programme has multiple loyalty levels and offers exclusive access to events and an active community. It turns loyalty into a status symbol. Customers post on Instagram about reaching the Rouge level, which has become a badge of honour within the beauty enthusiast community.
In the “Beauty Insider Community”, customers can connect and communicate with each other, and feel part of a group. The rewards are not just products; they are experiences. These include invitations to private events, courses with experts and early access to launches. These are things that money can’t buy and they reinforce the feeling of privilege.
Loyalty here is emotional. It comes from a sense of belonging, recognition and unique experiences. It is a relationship built over time with care and respect.
The mistakes that can sabotage your strategy
When loyalty programmes backfire
Many companies make the mistake of launching complicated programmes with complex rules and uninteresting rewards. If a programme is difficult to understand, it will be ignored. If the rewards are irrelevant or difficult to achieve, customers will abandon the programme. Complicated programmes do not foster loyalty, but frustration, and frustrated customers will leave.
As we have pointed out, loyalty comes from interactions, not transactions. Another major pitfall is focusing exclusively on transactions. A temporary discount will boost sales, but it will not generate support. If you only reward purchases, you are ignoring all the other valuable interactions, such as reviews, recommendations and social media engagement. Engagement is the real value that loyal customers offer; it is a strategic partnership.
When you collect data, but you don't use it
For example, you might have registration forms and collect lots of customer data, but then send everyone the same email. Collecting customer data is not a strategy! If you ask for information and don’t use it, customers will lose trust in you. Customers want to be recognised, not just recorded. Why should they give you information if you’re not going to use it?
We know it’s challenging to strike the right balance between complying with privacy regulations and delivering personalised experiences, but it’s essential. If you can’t personalise, you might as well not collect the data.
In this case, transparency is paramount. Be upfront about what you’re doing with the data and keep your promises. Customer relationships are built on trust, and trust can easily be lost.
When you deliver a fragmented experience that frustrates
Customers encounter you through many channels: your website, physical store, social media, phone, chat, and so on. If the experience differs on each channel, it creates frustration. For example, do you offer points online that can’t be used in the store? Does a customer receive an offer by email, but then the cashiers haven’t heard of it? Consistency across channels is not a luxury; it is a necessity. If promises are not aligned, customers will feel cheated and will lose trust in the brand.
Loyalty is built in the details. It is built through synchronising the online and offline channels, ensuring messages are clear and accurate, and providing a consistent experience. Every inconsistency is a missed opportunity.
The Future of Loyalty: What's Changing Now?
AI is becoming your strategic partner
Loyalty is evolving into a combination of emotion, technology and cultural context. Customers no longer respond to the same stimuli as they did five years ago. Expectations have risen and patience has decreased.
Artificial intelligence is becoming a reliable partner. It does not replace the human element of relationships, but supports it. By analysing large amounts of data such as purchase history, browsing behaviour, demographics and context, AI algorithms can anticipate customer needs and deliver offers, product recommendations and communications that are perfectly tailored to each user and delivered at the most opportune moment.
AI automates repetitive and time-consuming tasks such as customer segmentation, programme fraud detection and communications management. Intelligent chatbots can provide round-the-clock support by answering frequently asked questions about the programme.
“Trend Loyalty” is a new type of ephemeral loyalty
At the same time, a new type of loyalty emerged in 2025: an emotional and ephemeral one, fuelled by social media and cultural buzz. TikTok is the new discovery engine for brands. People quickly become attached to brands that go viral, but they also forget them quickly. To turn this into an opportunity for sustainable growth with lasting effects, you need to turn that impulse into a memorable experience and build deep relationships that last after the trend disappears.
Experience rewards are replacing discounts
Rewards are changing, too. Discounts alone are no longer enough because customers now want more than just savings. They want memorable experiences and stronger emotional connections that cannot be replicated, such as exclusive access to events, meetings with founders, personalised content and specialised courses. They want things that create memories, not just transactions. Loyalty becomes a form of belonging and an emotion rather than just a purchasing behaviour.
Ethical and value-based loyalty
A brand’s commitment to sustainability, social responsibility and ethical practices is an increasingly important factor in building loyalty. Consumers, especially young people, want to support companies that reflect their values, and they’re increasingly vocal when those values are betrayed.
The recent protests in France against the Chinese fast-fashion giant Shein are a clear example of this. When Shein opened its first permanent store in Paris in November 2025, hundreds of demonstrators gathered outside BHV Marais to protest against the brand’s environmental impact, opaque supply chains, labour practices, and questionable product listings.
In this climate, loyalty is no longer a passive habit. It’s a conscious choice, shaped by values as much as by experience.
Brands and loyalty programmes that incorporate these elements foster a deeper, more meaningful type of loyalty.
Loyalty must be earned every day
Ultimately, loyalty is not a result, but a process that cultivates genuine relationships that last over time, even when competitors offer more favourable prices.
Loyal customers are not just a source of income; they are also a source of growth and a competitive advantage. They are your ambassadors: the people who recommend you; who support you when criticism arises; and who contribute to your growth through honest feedback and active participation. They are the ones who stay with you even when cheaper options appear. In an unstable market, they are your most reliable supporters. For them, your brand is not just a supplier; it’s a personal choice.
Building loyalty requires coordinated efforts such as quality service, authentic personalisation, valuable programmes and intelligent use of technology. Remember that loyalty does not require perfection; it requires consistency, empathy and the courage to listen. If you are there when it matters, respond when it’s difficult and provide something that makes a difference, loyalty will be the natural response. It is not a reward, but a conscious choice made day after day.