“Customer Loyalty” is often understood as the strong sense of trust and obligation a customer feels towards a brand or organization. This feeling makes them purchase a firm’s products or services exclusively, and they cannot be persuaded to switch their “loyalty”.

It is also known and accepted that customer loyalty is positively correlated with customer satisfaction because happy customers favor the brands that meet their needs. Inversely, loyalty is only cultivated when customer satisfaction is high, to begin with.

From an organization’s perspective, brand loyalty can be cultivated by consistently delivering the same quality of product and service to its customers. Once a positive reputation has been formed, maintaining a client base is highly dependent on customer service and letting customers know that they are the most important party to the success of a brand.

Marketers have come to realize that loyalty is the key to customer retention – hence, they are constantly trying to decipher the code of fostering customer loyalty. Nevertheless, loyalty does not come easily to a business. Customer loyalty requires continuous attention so that customers are supported and satisfied throughout the process. The easiest way to do this is by building a material reward system – a barter of rewards for continuing loyalty.

To learn more about the different kinds of loyalty programs that organizations adopt, you can read this overview of loyalty technology.

But as most things go, understanding the basic psychology of a customer is vital to being able to build and execute an effective loyalty program.

So, here are the five stages of customer loyalty, as identified by experts, to help to understand what should be kept in mind while building a loyalty program.

  • Awareness – Any business’s first impression, the time a customer finds out about a brand, is when the journey to a potential loyalty relationship begins.
  • Exploration – In the age of the world wide web, customers have the opportunity to gather more information about a business/brand/product from the internet after the initial impression. As a result, a business’ website often makes a big impact on visitors. In addition, a brand’s online presence and multi-channel outreach also make a great difference to how it is perceived by the target audience.
  • Ethics and USPs – Buyers often tend to look out for the benefits and differentiators of products while buying them. Then, they compare the offerings to the competitors of the brands. During this stage, customers are trying to identify the business that will bring them the most benefits. The way the world stands today, the general outlook of a brand towards the world – socially, environmentally, and politically – also makes an impact on the leanings of customers.
  • Familiarity – In the initial purchasing process, customers pay more attention to first-hand experiences. The customers form solid opinions about a business’s product, payment gateways, ease of use, customer service right from the get-go. But their opinions are only solidified with continued positive experiences. When customers are consistently satisfied with these aspects of the brand, they proceed to the next level.
  • Commitment – The final part of building customer loyalty is commitment. Once customers are completely satisfied with a product or service, and their opinions of a business are solidified, they are very likely to promote the brand to others and keep going back to it themselves. This is when a brand can label a recurring customer as “loyal”.

Letting Loyalty Technology Intervene
It has become common knowledge that in the modern loyalty program, data needs to be gathered not just from purchases, but from social media, web search, and chat as well. Across all these channels, a customer’s actions flow together to show their complete experience with the brand. As a result, brands can provide rewards and recognition based on the entire experience, not just one aspect of it.

Loyalty technology software is changing the traditional paradigm of loyalty programs, linking digital identities with brick-and-mortar store behavior. Artificial Intelligence and Machine Learning, key components of loyalty technology innovation, enable more to be done in real-time.

When digital and physical interactions are mapped, it is possible to create the most relevant offers. Automated responses, including product recommendations, reward updates, and point collection prompts help to personalize communication and in turn, customer experience.