The Loyalty Gap: Difference Between Repeat and Loyal Customers

 Customers considered 

The Loyalty Gap: The Difference Between Repeat Customers and Loyal Customers

By Shep Hyken -March 16, 2023    in Customerthink

Or, The Loyalty Gap.    In a recent Shepard Letter, I discussed the Trust Gap, which is the difference between an organization’s belief that their customers trust them and the percentage of customers who actually do. I’ve covered different gap concepts in the past, and it’s time to add yet another to the list, and that is the Loyalty Gap. 

By the way, this is a perfect time to mention International Customer Loyalty Month, which happens every year in April. It is a time to focus some extra care and attention on your loyal customers. You can learn more at www.CustomerLoyaltyMonth.com.   

So, back to the Loyalty Gap. This is the gap between the percentage of customers you think are loyal and customers who actually are loyal. If you’ve been following my work, you may remember that I preach there is a big difference between a repeat customer and a loyal customer. A customer that comes back again and again could be mistakenly labeled as a loyal customer. Before we can call someone a loyal customer, we must find out why they keep coming back and buying from us. And there are many reasons why customers might return that have nothing to do with being loyal. For example:  

The Price Is Lowest – Customers who buy based on low prices aren’t loyal to you. They are loyal to the price. The moment a competitor has a lower price, the customer disappears. And you thought they were loyal!  

The Location Is More Convenient – Does the customer buy from you because you are closer than your competition? You don’t know if you don’t ask. As soon as a competitor moves into the area, if their location happens to be more convenient, the customer moves on. Again, you thought they were loyal! 

The Customer Is Satisfied – This one is super important. There’s a big difference between a satisfied customer and a loyal customer. Satisfied customers are just … satisfied. The experience is good, but not great. It’s enough to get them to come back until they find another brand or organization that satisfies them just a bit more.  

A loyal customer not only comes back but also spends more than a typical customer and evangelizes your brand by sharing word-of-mouth referrals. This is because there is an emotional connection. Maybe it’s the way the customer is treated. Maybe there is an employee the customer loves to work with. Or, maybe it’s the confidence that’s created when a customer interacts with the brand. There are many reasons, but they all evoke an emotional connection.   ... '