TL;DR: Customer loyalty is an emotional relationship that drives repeat purchases and can be measured through metrics like NPS, CLV, and retention rate, with loyal customers spending 31% more and being 64% more likely to purchase frequently. Building loyalty requires a strategic approach combining excellent customer experience with loyalty programs (points-based, tiered, referral, or paid memberships) that use rewards and “rescues” to create positive reinforcement loops.
We all have brands we’re loyal to: that trusty phone brand, toothpaste, or coffee shop we choose without thinking twice.
That level of customer loyalty is what every app builder aspires to: becoming the go-to solution users think of first and return to again and again. In this article, we’ll break down what customer loyalty actually means, why it matters for your business, how to measure it with key metrics and benchmarks, and proven strategies to build it, including seven popular loyalty program types and the tools that make them work.
What is customer loyalty?
Customer loyalty is an ongoing emotional relationship between a customer and a brand that motivates repeat purchases even when competitors offer cheaper or more convenient options. This loyalty develops through consistently positive experiences that build trust and genuine connection.
Unlike customer satisfaction, which reflects feelings about a single interaction, loyalty transforms first-time buyers into repeat customers and repeat customers into vocal brand advocates.
Why customer loyalty matters for app builders
Customer loyalty drives sustainable growth by delivering higher profitability than acquiring new customers. Research from the Harvard Business Review shows that loyalty leaders grow revenue 2.5× faster than competitors.
Loyal customers deliver measurable bottom-line benefits:
- Higher revenue and repeat business. Loyal customers buy more frequently and spend more per transaction, increasing their customer lifetime value (CLV).
- Lower acquisition costs. Since acquiring new customers costs significantly more than retaining existing ones, focusing on loyalty makes your marketing budget more efficient.
- Brand advocacy and referrals. Happy, loyal customers become your most effective marketing channel, recommending your product to friends and family and providing warm leads at no cost.
- Improved profit margins. Loyal customers are often less price-sensitive because they trust the value you provide.
Types of customer loyalty
Customers stay loyal for various reasons, each requiring different strategies:
- Price-loyal. These customers are loyal to the lowest price and will switch as soon as a competitor offers a better deal.
- Convenience-loyal. These customers stick with you because your product is the easiest to access or use, but their loyalty is vulnerable to competitors offering more streamlined experiences.
- Loyalty program-loyal. These customers are motivated by points, tiers, and discounts, but their loyalty is to the program, not necessarily the brand itself.
- Truly loyal. This is the goal. These customers have an emotional connection to your brand—they trust you, advocate for you, and would feel a sense of loss if they had to switch. They are your most valuable asset.
How to measure customer loyalty: 5 key metrics
These five core metrics reveal what’s working and what needs improvement in your loyalty efforts:
Net promoter score (NPS)
Net promoter score (NPS) measures how likely customers are to recommend your brand on a scale of 1–10, making it an effective way to track loyalty and engagement over time.
To get your NPS score, you’ll run a simple survey asking customers to rate their likelihood to recommend. Then, your team will group respondents into three categories:
- Detractors (wouldn’t recommend, or would recommend against)
- Passives (may or may not recommend)
- Promoters (would actively recommend)
Anyone who answers between 1–6 is a detractor. 7s or 8s are passives, and 9s or 10s are promoters.
Then, calculate the percentage of each group. You can then calculate your overall NPS score with the following formula:
So, if 40% of your respondents are promoters, and 20% are detractors, your NPS score would be 20.
Customer lifetime value (CLV)
Customer lifetime value (CLV) measures how much value (or revenue) you can expect to earn from a single customer over their “lifetime” with your brand.
Tracking CLV helps you gauge customer loyalty and ensure acquisition costs don’t exceed customer value.
CLV is calculated with the following formula:
The average customer lifespan is how long the average customer tends to stick with your brand.
The customer value is the average number of purchases a customer makes in a given timeframe multiplied by the average value of a purchase.
So, let’s say you’re running an e-commerce platform. The average customer purchases five items per year, and the average purchase is $15. Generally, customer engagement with your brand lasts for two years.
In this case, CLV would look like:
The CLV is $150.
Repeat purchases
This metric measures the average number of times a customer makes repeat purchases, either in a given time period (i.e., annually) or over their entire lifespan.
Repeat customers spend 31% more on purchases than new customers and are 64% more likely to purchase more often.
To measure it, simply divide the number of purchases made by repeat customers by the total number of repeat customers.
So if you have 1,000 customers who made 2+ purchases in the past year, and the total number of purchases within this group is 4,289, then the average number of repeat purchases is 4.2.
Customer retention rate (CRR)
Customer Retention Rate (CRR) shows the percentage of customers who remain with your business over a given period, making it especially helpful for subscription-based models.
To calculate CRR, you’ll need to know three numbers:
- CE = number of customers at the end of the period
- CN = number of new customers during the period
- CS = number of customers at the start of the period
Then, you can use the following formula:
For example, let’s say you have a SaaS tool using a monthly subscription model. At the beginning of 2023, you had 450 users. Throughout Q1, you gained 150 new users. At the end of Q1, you have 580 users.
In this example, the company keeps 95% of their customers, which indicates extremely high customer loyalty.
You can also measure customer churn rate by taking the inverse of your retention rate (e.g., 95% retention = 5% churn). While good rates vary by industry, declining churn indicates growing loyalty.
Customer satisfaction score (CSAT)
Customer Satisfaction Score (CSAT) measures how satisfied customers are with a specific interaction, purchase, or experience. It’s valuable for tracking trends over time and predicting future loyalty, since satisfied customers are more likely to return.
It’s typically measured via a one-question survey where the customer indicates how satisfied they are with a recent experience on a scale of 1–5. Then, you can use the following formula to measure CSAT:
If you’re struggling with customer loyalty, sending CSAT surveys at various touchpoints (after purchases, customer service interactions, etc.) can help you pinpoint and improve problem areas to reduce churn.
Customer loyalty benchmarks and statistics
Take a look at some key customer loyalty stats:
- 73% of customers are more likely to recommend a brand that has a great loyalty program.
- 59% of US consumers say once they’re loyal to a brand, they’re loyal for life.
- 68% of consumers are willing to spend more to maximize their loyalty points or earnings.
- Loyal customers spend 43% more money with their favorite brands.
- 52% of customers will go out of their way to purchase with a brand they’re loyal to.
Although these vary significantly by industry, the following can give you an idea of what to aim for as you’re starting:
| Metric | Excellent | Average | Poor |
|---|---|---|---|
| Net promoter score | 50+ | 10+ | Below 0 |
| Customer retention rate | 75%+ | 60-75% | Below 50% |
| Customer churn rate | 4% or less | 5–7% | 10%+ |
| Customer satisfaction score | 85%+ | 60–75% | Below 50% |
We’ve left off CLV and repeat purchases from this table since they vary so widely by industry. For example, a SaaS product with a monthly subscription might have an average of 15 repeat purchases per customer (since they are purchasing a subscription every month). A successful small business might have an average repeat purchase of only two.
How to increase customer loyalty
Building customer loyalty takes time, but don’t give up! With an effective strategy in place, you can make steady gains that pay dividends in the long run.
Build your customer loyalty strategy
Building a strategy has three main steps:
1. Figure out where you are
To track and grow your customer loyalty, establish internal benchmarks to measure progress and set meaningful goals.
To establish your current loyalty baseline:
- Run NPS and CSAT surveys to measure general satisfaction. Aim for at least 50–100 responses for meaningful results.
- Calculate retention and churn rates using internal data. Track monthly or quarterly cohorts to identify trends over time.
- Determine customer lifetime value if you have sufficient purchase history. New startups can skip this initially and focus on retention metrics.
Then, compare your numbers to the benchmarks in the section above or industry-specific averages.
If you’re still new enough that you don’t have much hard data yet, you can still run an NPS or CSAT survey on your existing customer base (or talk to customers one-on-one) to get an idea of overall satisfaction and loyalty.
2. Set goals for where you want to be
Look beyond the obvious goal of creating more loyal customers. What specific outcomes are you after?
But what’s behind that? Maybe you want to:
- Expand your audience through more word-of-mouth referrals
- Increase customer retention or decrease churn
- Grow your customer lifetime value
- Improve customer satisfaction to create more loyalty
3. Determine how you’ll get there
With your end goal in mind, determine the tactics you’ll use to achieve it.
For example, if you want to increase your retention rate, and currently see about 60% of your customers churn after the first 60 days, you can assess which loyalty strategies and techniques will be most productive to reduce churn.
This might mean creating a loyalty program or addressing root causes of churn, such as building better onboarding flows with user directions and prompts to help users find value faster and stick around longer.
The psychology of customer loyalty
Most strategies for building customer loyalty fall into two buckets: rewards or rescues.
Rewards are positive reinforcement. When the customer takes a desired action like referring a friend or making a purchase, they get something nice (e.g., store credit or a free item).
Rescues are a subset of negative reinforcement, a way of the customer “escaping” from something which they don’t want to have happen. For example, if the customer spends more with your company, they might get access to special discounts, prioritized customer support, or free shipping — rescuing them from higher prices, long waits on hold, and shipping fees.
The key insight: Loyalty is an ongoing loop. You need to be the kind of brand customers want to be loyal to before you can reward them for that loyalty. This means giving them rewards or rescues consistently — both after desired actions and proactively. For example, always offer free shipping on bulk orders or provide exceptional customer service.
Think about what your customers actually want and what frustrates them, then design your rewards and rescues around those insights.
7 popular customer loyalty programs
Loyalty programs deliver measurable results: Research from Antavo found that customer lifetime value (CLV) for customers participating in loyalty programs was 6.3× higher than for non-members.
Even better news: There are many different types of loyalty programs that can work for any business model.
Customer loyalty cards (aka “punch cards”)
Customer loyalty cards are most often used at local businesses like coffee shops and small restaurants.
Typically, you get a “punch” for each purchase, and after reaching a certain number, you get a discount or a reward (often a free drink or item).
| Pros | Cons |
|---|---|
| ✅ Simple, visual reward system customers already understand | ❌ Difficult to use for companies with high price points or low purchase frequency (e.g., airlines or software) |
| ✅ Works well for businesses with the potential for high numbers of repeat purchases | ❌ Can take a long time to earn rewards |
| ❌ Encourages repeat purchasing, but not necessarily purchase value |
Points-based programs
Points-based programs are the most popular loyalty model. Customers earn points through purchases or actions like social media engagement and referrals, then redeem them for discounts or free items. The more customers spend, the more they earn, creating a feedback loop that drives loyalty and larger purchases.
Brands like Chipotle, Starbucks, and most airlines use points-based systems. Starbucks combines points with tiered benefits for different earning rates based on membership level.
| Pros | Cons |
|---|---|
| ✅ Can be as simple or as complex as you like | ❌ Usually requires a specific software to manage |
| ✅ Works with almost any business model or product type | ❌ Giving customers a satisfying points-to-rewards ratio can be challenging |
| ✅ Ability to set up different types of rewards and ways to earn points | |
| ✅ Can be combined with other program formats, such as tiered-based and referral programs |
Tiered programs
Tiered programs allow customers to work their way into higher and higher tiers with better rewards, usually based on how much they’ve spent.
For example, spending $0–100 in a year might move someone into the “Bronze” tier. Spending $101–250 might put someone in the “Silver” tier, and spending $251+ might put someone in the “Gold” tier.
Sephora’s Beauty Insider program is a great example. Higher tiers include higher discounts on sales, exclusive deals throughout the year, early access to new products, points multiplier events, and more.
By using a tiered system, you can use both rewards and rescue tactics. For example, you can reward customers with extra points, sales, discounts, and so on. You can also rescue them by providing perks like free shipping, or early access to sales or products (avoiding waiting for new releases or having them sell out).
| Pros | Cons |
|---|---|
| ✅ Allows customers to earn more varied rewards compared to points-based systems | ❌ Usually requires specific software to manage |
| ✅ Works with many different business models | ❌ It can be difficult to balance the rewards in each tier |
| ✅ Tiers can provide any number of rewards, or “rescue” customers from common irritations | |
| ✅ Can be combined with other program formats, such as points-based programs |
Mission- or charity-based programs
Mission-based programs allow customers to feel like their purchases from you are doing something good for the world. Bombas, the popular sock brand, is a great example of this type of program. For every item purchased, Bombas donates an item to a homeless shelter in the US.
The customer’s reward here is less direct than traditional loyalty programs: Instead of getting a discount or a freebie, they get to feel like their purchasing behavior makes a difference. For many consumers — especially Gen Z and Millennial shoppers — this is important.
If your brand has strong values in a certain area or the ability to give back, a mission-based program helps you clearly and tangibly communicate that to your audience. It’s not only good for the causes you care about — it can also cultivate customer loyalty.
| Pros | Cons |
|---|---|
| ✅Strengthens loyalty among values-conscious shoppers, especially younger generations | ❌ Can be very difficult to manage large-scale giving effectively |
| ✅Can be very simple to reward (i.e., one-for-one models) | ❌ Is difficult to connect with many types of items or business models |
| ✅Allows customers to feel like they’re part of a larger community | ❌ Doesn’t reward ongoing loyalty any differently than a one-time purchase |
Paid membership programs
Paid membership programs are a loyalty program that has a one-time or subscription-based membership fee. Rather than earning points or moving up tiers based on purchases, customers purchase access into the membership program to get benefits or earn rewards.
Although it may seem counterintuitive, these programs can be widely successful.
Amazon Prime is probably the most well-known example. (Case in point: As of 2025, Amazon Prime has over 200 million members worldwide, with more than half of U.S. households maintaining active subscriptions.) The REI membership is another example. For a $30 lifetime membership, members get access to exclusive deals, discounts on services, longer return windows, and 10% back on all regularly-priced purchases.
These programs both rescue customers from annoyances like short return windows or longer shipping times, and provide exclusive rewards and sales. In turn, these programs encourage customers to spend more to “max out” their rewards.
And because customers are paying extra in advance for the rewards, they tend to be more loyal to the brand. A McKinsey study found that members of paid loyalty programs are 60% more likely to spend money with a brand (compared to 30% for members of free loyalty programs).
| Pros | Cons |
|---|---|
| ✅ Provides immediate revenue up front when customers sign up | ❌ Upfront cost makes it more difficult to get new customers to join |
| ✅ Offers a simple, customizable model (one way to join, endless reward options) | ❌ Can be difficult to match the value of the rewards to the price point of entry |
| ✅ Customers usually earn rewards on every purchase | |
| ✅ Shown to increase customer loyalty for those in the program |
Referral programs
Referral programs reward existing customers for referring new ones. This is often facilitated via a unique referral code or link that allows new signups to be traced back to a referrer so a reward can be granted.
Common rewards include product credits, discounts on future purchases, or points for a larger rewards program.
Besides offering rewards to customers who are using and enjoying the product, these programs have the additional bonus of driving new users to the product through word-of-mouth (one of the cheapest and most effective forms of marketing).
| Pros | Cons |
|---|---|
| ✅ Customers can control how many rewards they earn based on their referrals, not their spend | ❌ Requires a referral software to manage the program |
| ✅ Provides a simple rewards model that works for a variety of business models | ❌ May not be as effective in driving long-term loyalty for new users |
| ✅ Can be very effective for digital products and subscription-based services | ❌ Can create caps on earning rewards since there’s a limited number of people users could refer (compared to unlimited numbers of purchases) |
Exclusive access programs
Exclusive access programs reward members through exclusive access to sales, discounts, perks, or content.
The Nike membership is a great example. Although it’s free to join, members get exclusive access to products, content, and experiences, as well as some perks like free shipping over $50. Most grocery stores also have free store cards that give shoppers a lower price.
By providing members exclusive access to either your brand, a community, or special deals and offers, you can create increased loyalty to your brand as a whole.
| Pros | Cons |
|---|---|
| ✅ Easy to set up and join | ❌ Doesn’t require or reward true loyalty (or spend) with your company |
| ✅ Provides immediate access to rewards or benefits | ❌ Can artificially inflate the number of “loyal” users |
| ✅ Can be very effective for digital products and creating community around your product | ❌ May not be as attractive to customers as other types of programs |
Customer loyalty tools
Sometimes you’ll want a specific tool or software that can help you track customer loyalty, implement a loyalty program, or otherwise build loyalty among your customer base.
Here are two key types to consider:
Loyalty program software
Most loyalty programs, including points-based, tiered programs, and paid memberships, require some sort of software to manage the program. A good loyalty program software will allow you to:
- Open the program to new users
- Create special campaigns, deals, and offers
- Set up personalized offers
- Create rules for rewards and perks
- Set up points- or tiers-based rewards systems
- Track and analyze program metrics
Some great loyalty program software options include Talon.One, SpotOn, or Open Loyalty.
Customer satisfaction software
Customer satisfaction software makes it easier to run CSAT and NPS surveys, and otherwise measure customer loyalty and sentiment.
Ideally, this software will allow you to:
- Run automatic, recurring surveys
- Measure and analyze results of your customer data
- Find common complaints or problems to address
- Gather customer feedback across various channels or touchpoints
Some great options include Qualtrics, Delighted, or Survey Sparrow.
If you’re building your product with Bubble’s visual AI app builder, you can integrate a brand loyalty program directly within your app or product, making it even easier to improve customer loyalty. For example, with Bubble, you can use the AI Agent to help build customer loyalty features, or leverage plugins and integrations to add customer testing, feedback, and loyalty tools directly into your app.
For example, you might want to try Rewardful for affiliate and referral programs, ask the AI Agent for guidance on building custom loyalty features, or check out Bubble’s plugins and integrations for more options.
Build customer loyalty faster with Bubble’s visual AI app builder
There isn’t a one-size-fits-all strategy for building customer loyalty.
At Bubble, we make it easier to build and iterate on the loyalty features your customers will love, so you can launch the exact loyalty experience you envisioned.
Whether you’re using Bubble’s visual AI app builder to launch faster and more affordably than traditional development, adding customer loyalty program integrations directly to your app, or connecting with our community of nearly 6 million builders, we’re here for you.
As you build and grow your app, Bubble’s visual AI app builder lets you iterate quickly based on customer research or feedback. Use the AI Agent to implement changes fast, or edit directly in the visual editor when you want precise control. Are customers really responding to a new feature?
Do new subscriptions surge when you add new functionality or implement user suggestions? With Bubble, you can ask the AI Agent to build what you need or edit it yourself visually, then deploy changes instantly to see what works.
Not sure where to start with customer loyalty? Ask the Bubble AI Agent for guidance on building loyalty features, check out our community forums, and connect with other builders about what strategies are working for them.
Frequently asked questions about customer loyalty
What are the 4 C’s of customer loyalty?
The 4 C’s are a framework for thinking about loyalty, typically including Convenience, Communication, Consistency, and Customer Experience. Mastering these four areas helps create an environment where loyalty can flourish.
What are the 3 R’s of customer loyalty?
The 3 R’s often refer to Rewards, Recognition, and Relevance. This framework emphasizes that loyalty programs should offer tangible rewards, make customers feel recognized and valued, and provide relevant, personalized offers.
What’s the difference between customer loyalty and customer satisfaction?
Customer satisfaction measures how a customer feels about a specific product, service, or interaction — it’s often a short-term, transactional metric. Customer loyalty is a long-term emotional connection and behavior, demonstrated by a customer’s willingness to repeatedly choose your brand over others.
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