Frequently Asked Questions (FAQs) about Customer Loyalty

What is Customer Loyalty?
Unlike customer satisfaction, which is an attitude, customer loyalty can be defined in terms of buying behavior. A loyal customer is one who:

  • Makes regular repeat purchases
  • Purchases across product and service lines
  • Refers others
  • Demonstrates an immunity to the pull of the competition
  • Can tolerate an occasional lapse in support without defecting, owing to the goodwill established through regular, consistent service

How do you build Customer Loyalty?
Customer loyalty doesn’t happen overnight. It’s built and earned one customer experience at a time. In keeping your customers safe from defection, it’s important to recognize that customers typically evolve through loyalty stages. For off-line customers those stages can be defined as (1) suspect, (2) prospect, (3) first time customer, (4) repeat customer, (5) client, (6) advocate. For on-line customers those stages are modified as follows: (1) surfer, (2) first time site visitor, (3) repeat visitor, (4) first time buyer, (5) repeat buyer, (6) client, (7) advocate. Sometimes a stage gets skipped. For example, in the on-line world, a customer could move from surfer to first time site visitor to first time buyer in one site visit. In her customer loyalty seminars, Jill often uses the image of the Profit Generator™ system (a concept Jill has trademarked) to illustrate the marketing challenges every company must address to be profitable.

The Profit Generator System

The Profit Generator System™ works like this: An organization funnels (1) suspects into its marketing system, and these people are either qualified as high potential (2) prospects or disqualfied. Qualified prospects are then focused upon with the goal of turning them into (3) first time customers, then (4) repeat customers, and eventually (5) clients and (6) advocates. Without proper care, first-time customers, repeat customers, clients and advocates can become lost customers representing lost profits (characterized by the waste bin).