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The Importance of Customer Loyalty / By: Riona Duncan

Do you have a favorite coffee chain, or does your family always go to the same grocery store? If the answer is yes, you’re probably already familiar with customer loyalty. Customer loyalty is one of the most important things for a company, but it’s surprisingly hard to define. Some people say that it’s when a customer routinely chooses a product or service over its competitors. Others argue that it also involves a client recommending the brand. Abby Moonsarudi, who creates and sells jewelry and clothing for their small business Mothgoths, says, “People find me through friends who wear my stuff.” This shows how shops benefit from loyalty by receiving free word-of-mouth advertising. 


One of the ways companies engage customers is through social media. This is especially true for younger people, since "66% of users between the ages of 18 and 24 years old are more loyal to the brands they follow on social media" (Shaw, 2018). Zoren V. Co, a Chicago teen, says “I follow brands to give me ideas about outfits, clothing trends, and what matches with what. They inspire me when I pick my outfit for the day.” Social media allows brands to influence how they are seen online, and create positive relationships that will keep customers loyal.


Many companies also promote loyalty by offering rewards for repeated purchases. Throughout the twentieth century, many brands packaged coupons along with their products and gave out stamps that people could collect for prizes. However, in 1981, American Airlines responded to the Airline Deregulation Act by launching its  frequent fliers program, which converted miles into currency for free flights or hotel stays. Less than a week later, United Airlines launched a similar program. The rest of the market quickly followed suit, and the internet made collecting purchase data even easier. In fact, “the average U.S. household belongs to more than 30 loyalty programs” (Kim, J.J., Steinhoff, L. & Palmatier, R.W., 2020).


It is important for brands to cultivate customer loyalty. Beyond providing a quality good or service, they do this by using social media and rewards programs. This can also be important for consumers to be aware of, so that they can make sure their decisions make the most sense. 


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