What is loyalty?
Loyalty describes the degree by which customers are likely to
re-use your business. As with satisfaction, customers are asked to
rate their loyalty on a ten-point scale.
Why is it important?
Loyalty is a valuable metric to have with satisfaction. It helps you
understand the level of investment you need to make to improve
satisfaction. For example, if my business has little competition,
customers will have little choice other than to use me; so even if my
service is poor, my loyalty could be high. This means I don't need to
prioritize work on improving satisfaction.
How can you measure loyalty?
Net Promoter is a great way to combine satisfaction and loyalty
into one metric without the need for any more questions. For further
information see, One metric for satisfaction.
Another approach is to ask a specific loyalty question: "Based on
your experience of using Acme Ltd, what is the likelihood you would use
Acme again?", rate out of 10.
To calculate loyalty, find the average score chosen by your customers
and convert to 100 scale.