How to Build Brand Loyalty Through Customer Experience

Making your existing customers stay with you is even more complicated than acquiring new customers. That’s because existing customer relationships are much more important for a business when compared to garnering new customers.  According to Forbes, in 2025, e-commerce brands are reported losing $29 for every new customer acquired, a significant increase from $9 in 2013.

This surge is attributed to heightened digital competition and stricter data privacy regulations, making customer acquisition more challenging and expensive. 

This means that, if you are able to make your existing customers stay with your brand, you are going to save huge on the marketing costs. However, it is not going to be an easy haul. Your brand needs to provide exceptional customer experience to make them stay. 

A 2025 Forbes article emphasizes that enhancing customer retention should be a top priority for B2B firms, as it's more cost-effective than acquiring new customers. The piece underscores that businesses can't grow what they can't retain. 

 No matter how refined and perfect your product or service is, if you are lacking at delivering a great customer experience, then it all goes in vain. So, it is important to focus on your customer relationship post purchase. 

Before we dig into the topic more, let us look at what brand loyalty means and why it is important for your business. 

What is brand loyalty? 

There is competition for everything in the market. No matter whichever business you are in, you will have to face the competition and it is non-negotiable. Despite so many options available in the market, most of the customers get attracted to one particular brand and go for that brand multiple times. 

During this process, they cultivate a positive relationship with the brand as well. Making your customers loyal to your brand is a multi-step process and it requires some serious efforts from you. 

Importance of brand loyalty program  

Building brand loyalty is essential for brands, looking to build a strong customer base and achieve long-term success. By creating loyal customers, businesses can enjoy a variety of benefits that contribute to their growth and profitability.  

Let’s look at why building brand loyalty is important and how loyalty programs play a crucial role in achieving this goal.  

1. Increased customer lifetime value  

One of the main advantages of building brand loyalty is the potential for increased customer lifetime value. When customers are loyal to a brand, they tend to make repeat purchases over a long period. Moreover, selling products or services to an existing customer is 60-70%, compared to selling to a new customer which is 5-20%.  

Loyal customers also tend to spend more with a brand compared to new or occasional customers. They have a higher average order value and are more likely to try out new products or services. By focusing on building brand loyalty, businesses can tap into this potential and maximize the value they get from each customer.  

2. Positive word-of-mouth  

Brand loyalty can also result in positive word-of-mouth, which is extremely valuable in today's highly connected world. Loyal customers are more likely to recommend a brand to their friends, family, and colleagues. They become brand advocates who willingly share their positive experiences and encourage others to try the products or services.  

3. Enhanced customer engagement  

Customer engagement plays a vital role in building strong relationships between brands and their customers. It involves ongoing interactions, personalized communication, and meaningful touchpoints that keep customers actively engaged with the brand.  

Loyalty programs serve as an effective tool for enhancing customer engagement. They provide a structured platform for brands to connect with their customers on a regular basis. Through loyalty programs, businesses can communicate exclusive offers, personalized rewards, and relevant updates that make customers feel valued and appreciated.   

Moreover, loyalty programs encourage customers to actively participate in activities such as earning points, redeeming rewards, and providing feedback. This level of engagement fosters a sense of ownership and strengthens the emotional connection between the customer and the brand. 

Key strategies to build a brand loyalty program  

When it comes to designing a brand loyalty program that delights your customers, there are several key strategies you should consider. These strategies will help you create a program that not only meets the needs and preferences of your customers but also fosters an emotional connection and drives sustained engagement.   

Let's explore the ways to build brand loyalty in more detail:  

1. Understand customer needs and preferences  

One of the fundamental aspects of designing a successful brand loyalty program is understanding your customers' needs and preferences. 

By using data analytics, you can gain valuable insights into customer behavior and tailor your loyalty program accordingly. This allows you to offer personalized rewards and experiences that resonate with your customers.  

2. Create a seamless loyalty program experience  

To ensure the success of your brand loyalty program, it's important to create a seamless and engaging experience for your customers. This means removing any potential barriers to participation and making it easy for customers to interact with your program.  

Consider implementing an omnichannel journey, allowing customers to engage with your loyalty program across multiple touchpoints, such as online, in-store, and mobile apps.   

3. Build an emotional connection through your loyalty strategy  

Creating an emotional connection with your customers is key to building strong brand loyalty. Your loyalty program should go beyond transactional rewards and focus on evoking positive emotions and building a sense of community among program members.  

Implement strategies such as surprise and delight rewards, personalized communication, and exclusive events for loyal customers. These initiatives make customers feel valued and appreciated, fostering a deeper emotional connection with your brand.  

4. Offer meaningful rewards to drive sustained engagement  

The rewards you offer in your loyalty program play a crucial role in driving sustained engagement. It's important to strike a balance between attainability and aspirational value to keep participants motivated over the long term.  

Using tiered benefits is a great idea that incentivizes continued spending. Mariott International is a good example of this. The organization offers its members rewards and experiences, helping its customers not only earn points but also use them for credit card usage, sporting events, or culinary events.   

In addition to tangible rewards, consider offering experiential rewards that provide unique and memorable experiences for your customers. This could include VIP access to events, personalized recommendations, or early access to new products or services. These types of rewards create excitement and further deepen the emotional connection with your brand.  

While implementing these strategies, remember to analyze data, gather feedback from participants, and optimize your program to ensure its long-term success.  

Ways to build brand loyalty through customer experience 

Building brand loyalty is not going to be a cakewalk. However, if you refine your customer experience, you will more likely create brand loyalty among the existing customers. Here are some of the things that you can do to build brand loyalty. 

1. Offer exclusive deals 

Exclusivity can be a game changer for your brand. Customers love the thought of getting something unique that no one else has access to. You need to reward your customer for purchasing from your brand, and this reward shouldn’t be something that everyone gets. 

Be it a discount on their existing bill or a coupon for their future purchase, sample of your new product which isn’t in the market yet, free shipping, etc. When you offer things like this, it prompts customers to come back to your brand again and again expecting more exclusive deals. 

This is a small gesture but can help you build brand loyalty on a very huge scale. 

2. Referral commissions 

Retaining your old customers is very important, but at the same time you need to acquire new customers to make your business grow. There is a marketing strategy that can make both of this possible, and that is referral commissions. You can offer a reward for every referral that you get from the customers. 

No, you don’t have to burn a hole in your pocket to do this. Small rewards like some percentage share on the billed amount would be enough to make your customers happy, you can also give them a free product. Either way, a small reward from your brand is enough to make them come back to your company again and again. 

3. Personalized responses 

Most of the time, we see banks sending birthday wishes to their customers. This is a small gesture, but it is capable of creating a positive relationship with the customer. Use tools like CRM to track the important events related to your customer. 

Send them personalized wishes, give them a coupon, and make their special day even better with your wishes. Apart from these, you should always ensure that every communication that happens between you and the customer should be personalized and never give them generic, chatbot replies. 

4. Faster replies 

No brand in the whole world delivers exceptional products or service with no complaints. It is common for your customers to come to you with one or the other issue that they are facing. Be it on social media, email, call, message or any other communication channel. 

Your response has to be fast. When you quickly acknowledge the issue, it sends a positive vibe to your customer and makes them believe in your brand even more. Listen to the customer’s issue carefully and then strive to work on the solution. 

There are times when your customers share negative feedback about your product or service, acknowledge that and respond. Make sure that the customer updates their review if they are happy with your solution. 

5. Gamification 

Who wouldn’t love games when it is coupled with rewards? Reward programs are really fun and would be a great way to engage your customers with your brand. You can conduct surveys, quizzes, trivia, offer them with a badge or something. 

Right from signing up to your newsletter or app to purchasing, you can keep rewarding your customers at every step of the sales process. This will keep them engaged, and they will take more actions to get more rewards. 

6. Ask for feedback 

Post purchase, ask your customer for feedback and try to improve on it during their next purchase. These small things are very important for customers, and it shows how much you care for them and their opinions. 

7. Keep improving customer experience 

Have a proper, streamlined customer service process in place. As said above, the customer attention span is very less now, and you just cannot take any chances with it. So, make sure that you address your customers almost immediately. 

Have a proper path for selling, interacting with customers and ensure that none of your customers are left behind. You can use a CRM to have that omnichannel experience. 

11 Essential metrics to measure brand loyalty 

Brand loyalty can be measured in many ways, making it challenging for some businesses to know where to start. While you may not need to monitor all 11 metrics at once, it’s important to gather a combination of qualitative and quantitative data for deeper insights.  

1. Net promoter score (NPS®) 

Net Promoter Score is one of the most commonly used metrics for brand loyalty. It asks customers a single question: On a scale of 0 to 10, how likely are you to recommend our brand to friends or colleagues?  

Customers are split into three groups based on their responses: 

• Promoters (9-10) are the most satisfied customers who will likely recommend your brand. 
• Passives (7-8) are neutral customers who haven’t had a negative experience but aren’t likely to recommend your brand. 
• Detractors (0-6) are dissatisfied customers who will likely detract from your brand reputation. 

Businesses can also use this handy NPS calculator to determine their score out of 100. NPS is an efficient way to gauge customer loyalty over time. Since millions of businesses worldwide use NPS to measure customer loyalty, you can easily reference benchmarks. NPS offers a simple, fast, and actionable way to measure brand loyalty.   

2. Customer retention rate  

Customer retention rate measures the percentage of customers who stay for a specific period of time. It’s the inverse of customer churn, which measures the percentage of customers who stop doing business. 

While customers may come and go, retaining them is a powerful strategy for growth. Acquiring new customers is significantly more costly than holding on to existing ones, with research indicating that it can cost five to seven times more to attract a new customer than to keep a current one. To strengthen customer retention, prioritize personalized experiences and deepen brand engagement. 

3. Customer lifetime value (CLV) 

Customer lifetime value represents the total worth a customer brings to a business over the duration of their relationship. It estimates the amount of money a customer is expected to spend from the time they first engage with the brand until they eventually stop purchasing. 

Brands can boost customer lifetime value by using surveys to gain direct insights into customer needs and preferences. Surveys help identify pain points, inform product enhancements, improve customer satisfaction, and strengthen support services. By gathering and acting on customer experience data through surveys, businesses can effectively raise their average CLV. 

4. Customer satisfaction score (CSAT) 

Customer satisfaction score (CSAT) monitors customers' feelings about your brand and their experiences. CSAT surveys typically use a 1-5 or 1-10 rating scale to determine customer satisfaction.  

The formula to calculate CSAT is: 

(Number of satisfied customers / Total number of responses) x 100 = % of satisfied customers 

Analyzing customer satisfaction is more nuanced than you might think, but businesses can generally compare their scores to this scale. 

• 0-50% = Needs Improvement 
• 50-70% = Fair 
• 70-85%= Good 
• 85-100% = Excellent 

5. Customer effort score (CES) 

Customer effort score (CES) measures the amount of effort customers use to interact with your brand. CES surveys are typically sent immediately after certain customer interactions, such as completing the checkout process or a support call or chat.  

It utilizes a scale of 1 to 7 to answer the question “How easy was it to [insert customer interaction] today?” with 1 being very difficult and 7 being very easy. 

To use CES, brands can add some open-ended questions to the CES survey to gather qualitative data. SurveyMonkey offers a CES questions template to jumpstart your survey process. 

6. Customer loyalty index (CLI)  

Customer loyalty index is a standardized metric that tracks customer loyalty over time. It uses customer feedback surveys to quantify the strength of customer relationships. The three components of CLI surveys are: 

• Net promoter score 
• Repurchase likelihood 
• Customer satisfaction 

Measuring NPS and two additional factors gives brands a comprehensive understanding of customer loyalty. CLI scores of 9-10 are excellent, 7-8 good, 5-6 average, 3-4 poor, and 1-2 critical. 

Many businesses calculate their CLI score quarterly to track changes over time. Drive higher customer loyalty and better scores by delivering high-quality products and services, implementing a loyalty program, leveraging feedback, etc.  

7. Repeat purchase rate (RPR) 

Repeat Purchase Rate (RPR) measures how often customers make purchases, serving as a key indicator of brand loyalty. Customers who are loyal tend to return to the brands they trust repeatedly. Monitoring RPR on a regular basis allows businesses to track progress in customer retention and identify areas for improvement. 

Brands can improve their RPR by personalizing marketing efforts, providing a seamless shopping experience, and integrating a loyalty program. High RPR indicates high retention rates and engaged customers.  

8. Upsell ratio 

This key performance indicator (KPI) allows brands to monitor the effectiveness of their upselling strategies. Upselling occurs when a brand persuades customers to purchase an upgraded or more expensive product option.  

Upsell ratio is a percentage measuring the proportion of upsell revenue generated compared to a business’s total revenue. Upsell ratio helps companies to understand which customers feel loyalty toward their brand.  

To improve upsell ratio, brands must build trust and satisfaction among customers. Focus on providing high-value products that meet customer expectations to build trust. You can also invest in customer service training to improve customer interactions with your staff.  

9. Churn rate 

Churn rate, sometimes called attrition rate, is a critical brand loyalty metric that businesses should regularly track. It is the percentage of customers who stop doing business with your company at a given time. Companies with a high monthly churn rate should focus on their brand loyalty strategy. Churn rate is a key indicator of customer satisfaction and should be monitored to make continuous improvements. 

Building brand loyalty and reducing churn is a long-term effort. One of the most effective ways to begin is by collecting meaningful customer feedback through surveys. This feedback can then be used by brands to enhance their products, refine marketing strategies, and strengthen their overall reputation. 

10. Active engagement rate (AER) 

Customers who are actively engaged tend to have a stronger connection to your brand and its offerings. Active Engagement Rate (AER) is a valuable metric for assessing customer loyalty, as it focuses on how customers interact with and participate in your brand’s activities. This includes actions like commenting on social media, sharing blog articles, or generating their own content related to your products. 

The way you track AER will vary depending on the platform. For example, you might monitor time spent on page and the number of shares for blog content, while on platforms like Instagram, you would look at metrics such as likes, comments, and follower growth. 

11. Participation rate 

Participation rate tracks the proportion of customers who are genuinely engaged in a brand’s loyalty or rewards program. Simply enrolling to claim an initial discount doesn’t necessarily reflect real loyalty. What matters is ongoing involvement—customers who regularly take advantage of program benefits are much more likely to become repeat buyers.  

Additionally, those who refer friends or share the program with others show strong advocacy and reflect authentic brand loyalty. 

Brand loyalty programs encourage customers to shop more frequently to earn points or build status. They also often include certain perks and frequent discounts to attract customers. The importance of loyalty programs to brand loyalty is profound. Research shows that 84% of consumers are likelier to keep shopping at a brand that offers a loyalty program. 

3 companies with great brand loyalty 

Building brand loyalty is an art and there are so many companies who have mastered it. If you observe, almost all the success brands out there offer built brand loyalty and are thriving with amazing growth. 

1. Starbucks Rewards 

Starbucks continues to innovate its loyalty program, making it one of the most successful globally. In 2025, the program expanded its offerings to include more personalized rewards and partnerships.  

Members earn "Stars" for purchases, which can be redeemed for free drinks, food, and merchandise. The program also introduced exclusive promotions and early access to new products, enhancing customer engagement.  

2. Sephora Beauty Insider 

Sephora's Beauty Insider program remains a leader in the beauty retail sector. In 2024, Sephora launched a tiered loyalty system in the UK—“MySephora Bronze”, “MySephora Silver”, and “MySephora Gold”—complementing its existing U.S. tiers: Insider, VIB, and Rouge.  

Members earn points on purchases, which can be redeemed for exclusive products, experiences, and discounts. The program also offers birthday gifts and early access to sales, fostering a strong community of beauty enthusiasts. 

3. Amazon Prime 

Amazon Prime continues to be a benchmark for subscription-based loyalty programs. As of 2024, it boasts over 180 million members worldwide. The program offers a suite of benefits, including free two-day shipping, access to Prime Video, Prime Music, and exclusive shopping deals. Amazon's consistent addition of value to Prime membership ensures high customer retention and satisfaction.  

Conclusion 

Exceptional customer service is a great foundation—but to truly build long-lasting brand loyalty, you need to go beyond service and create memorable, engaging experiences that keep customers coming back. Here’s how you can do that effectively with Loyalife by Xoxoday: 

• Craft powerful loyalty programs: Use Loyalife’s advanced loyalty engine to design programs tailored to your audience, with flexible tiers, points, cashback, or perks. 
• Personalize rewards and engagement: Deliver customized offers and experiences using the Rule Engine, ensuring customers feel valued at every touchpoint. 
• Seamlessly engage across channels: With engage, you can connect with customers across email, mobile, and social to keep your brand top of mind. 
• Manage members and track performance easily: Stay in control with member management and access detailed reports & insights to measure and optimize loyalty campaigns. 
• Access a global rewards marketplace: Delight customers with a wide range of redemption options through the Xoxoday Plum marketplace, offering gift cards, experiences, and more. 
• Integrate smoothly with your existing systems: Connect Loyalife to your tech stack using ready-made partners & integrations for a seamless loyalty ecosystem.