Customer Loyalty Measurement: Analysis and Strategies

This report delves into the critical aspect of customer loyalty measurement, emphasizing its importance for business success. It explores various methods for gauging customer loyalty, including the Net Promoter Score (NPS), repurchase ratio, and upselling ratio. The report highlights how NPS surveys provide valuable feedback on customer satisfaction and brand loyalty, while the repurchase and upselling ratios offer insights into customer behavior and repeat purchases. The report also discusses the significance of adapting strategies and seeking customer feedback to maintain loyalty in a competitive market. By understanding and implementing these measurement tools, businesses can identify areas for improvement, enhance customer satisfaction, and ultimately drive growth by retaining existing customers.

Running Head: Customer Loyalty Measurement
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Customer Loyalty Measurement
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Customer Loyalty Measurement 1
Customer Loyalty Measurement
Customer loyalty is the most crucial part of every business because companies work
to provide satisfaction to the customers and satisfaction of customers turns them into loyal
customers of the business. The fact should be noted that every business does not work to
acquire fresh customers in the market but they work to retain the existing customer in the
business environment. The given paper review the articles in relation to customer loyalty
measurement. It is important for every business to attain of their customers, otherwise they
will shift to competitors that would subsequently reduce the growth of the business.
Therefore, the customers loyalty measurement system was formed to measure and manage
the loyalty of customers in the business environment. NPS is a simple way to measure the
customer loyalty for every business (Chang, Nasanjarga, & Chen, 2019).
NPS refers to Net Promoter Score survey that asks for feedback and recommendations
from the customers and rate the products and services of the organization one to ten. This
type of ratings and qualitative feedback helps in analyzing the satisfaction of the customers
towards the brand and to what extent they are loyal or are becoming loyal towards the brand
in the real world environment. The NPS survey seek answers for several questions related to
the business that helps in analyzing the buying behavior of the customers in the market and
towards the brand as well. Customer Loyalty Measurement would subsequently help every
business to find out loopholes in the organization process that is making it difficult for them
to maintain the interest of customers in the business and retaining them as well (Carrel, A. L.,
& Li, M. (2019).
It has become difficult for companies to attain loyalty from the customers even when
they are doing everything correct because the customer have started getting many choices in
the environment. Therefore, the business needs to regularly renovate the strategies and seek

Customer Loyalty Measurement 2
feedback from the customers so as to attain their views about change in the business. Further,
it should be noted that NPS is divided into three segments that are detractor (score of lower
than 6), passive (score of 7 or 8), promoter with holding a score of 9 or 10. Business falling
under the promoter category are likely to have better customer loyalty in the environment
(Zaki, Kandeil, Neely, & McColl-Kennedy, 2016).
There is another measurement tool used by the companies that is repurchase ratio
under which the business measures the repeat purchases initiated in the organization over one
time purchases. This helps the business in analysing that how many one time purchasers of
the business converts into loyal customers of the organization. It is important for every
business to have more repurchase than new purchase in the environment in order to attain
customer loyalty. There is another ratio similar to repurchase ratio that is upselling ratio. This
ratio analyse the ratio of customers who have purchased more than one type of good divided
by customers who have bought only one product. This ratio focuses on specific types of
products offered by the business (Kuehnl, Jozic, & Homburg, 2019). Thus, it should be noted
that customer loyalty in important for business and it can be analysed through above
mentioned measurement tools.

Customer Loyalty Measurement 3
References
Carrel, A. L., & Li, M. (2019). Survey-based measurement of transit customer loyalty:
Evaluation of measures and systematic biases. Travel Behaviour and Society, 15, 102-
112.
Chang, Y. C., Nasanjarga, A., & Chen, K. C. (2019). Service Quality, Customer Satisfaction
and Customer Loyalty in Mongolian Banks: An Application of Reflective-Formative
Measurement Model for Service Quality. Journal of Nan Kai, 16(2), 1-15.
Kuehnl, C., Jozic, D., & Homburg, C. (2019). Effective customer journey design: consumers’
conception, measurement, and consequences. Journal of the Academy of Marketing
Science, 47(3), 551-568.
Zaki, M., Kandeil, D., Neely, A., & McColl-Kennedy, J. R. (2016). The fallacy of the net
promoter score: Customer loyalty predictive model. Cambridge Service Alliance, 10,
1-25.