Customer Loyalty: How to Measure & Increase Loyalty (2025)

Customer loyalty fuels word-of-mouth marketing, user-generated content, and customer retention—not to mention increased sales and revenue. It’s also a more sustainable strategy than burning out marketing dollars to consistently acquire new customers.

But with so many choices for shoppers to select from, retailers likely need more than just a great product to keep people coming back. It’s the end-to-end experience across every touchpoint that determines whether customers return. 

This guide shares what keeps customers loyal, with strategies on how to increase and measure customer loyalty for your store. 

What is customer loyalty?

Customer loyalty measures how dependable and consistent your customers are, including how many times they purchase and their total customer lifetime value. 

There are several drivers of customer loyalty. Shoppers might find a brand’s products to be of better quality or more affordable than competitors. But when direct product factors are equal, it’s the brand that’s built strong customer relationships—through incentivized repeat purchases, personalized marketing, and a stress-free buying experience—that ultimately wins the sale. 

Importance of customer loyalty

Given the dense competition of today's retail industry, customer loyalty can set your retail business apart.

Increase revenue and profits

Instead of constantly burning cash to acquire new customers, retaining those you’ve already got is a cheaper and more sustainable retail strategy. Additionally, customer loyalty contributes to increased average order value (AOV), meaning that loyal customers make larger, more frequent purchases over time.

Improve brand reputation and advocacy

Word-of-mouth marketing is the most potent form of promotion—some 89% of people say they’ve been influenced to buy something from a friend’s recommendation, beating expert reviewers and store associates as consumers’ most-trusted source of referrals.

Truly loyal customers not only love purchasing from your store, but they also love telling their friends and family about it. A loyalty program can even accelerate these referrals by incentivizing satisfied customers to make them.

Gather valuable feedback

Cultivating a loyal customer base allows you access to valuable feedback and source ideas that help you grow, because those who are loyal to your store want to see you win. This can pinpoint ways to improve the customer experience, make smarter inventory decisions, and ultimately increase sales. 

How to increase customer loyalty 

Try some of these expert-recommended tactics to better cultivate customer loyalty for your retail business.

Understand the reasons for loyalty

To increase loyalty, run a store survey to figure out why repeat customers return to your store. Categorize their responses to find which of the following profiles your typical customer falls into:

• Price loyal: These customers shop with you because you offer the best prices, and respond best to discounts and sales. These customers aren't swayed by quality or convenience, and they'll likely move on if you raise prices. 
• Convenience loyal: They shop with you due to ease of use, e.g., a convenient location or fast shipping. They aren't as sensitive to pricing as price-loyal customers, and are often willing to pay more for the ease. 
• Brand loyal: These people shop with you because they believe in your brand and/or brand values. Regardless of product quality or price, these customers will prefer your brand to competitors. 
• Program loyal: These customers shop with you solely to benefit from your loyalty program. They maximize your benefits and use all the perks and discounts available to them. 

The reason for customer loyalty dictates how you’ll approach each customer. If you find that most shoppers are price loyal, for example, incorporate discounts (such as 10% off over a minimum purchase threshold) into your loyalty program to keep them coming back. If they care more about convenience, highlight services like local delivery or curbside pickup.

Offer stellar customer service

All things equal—price, convenience, etc.—phenomenal customer service can bring shoppers back time and time again. 

Customer service includes everything from the first interaction with your business to the quality of your products, and how your team answers questions asked after purchase. By addressing questions, fixing problems, and genuinely trying to help your customers, you not only delight them but also secure a long-lasting, loyal customer. 

One of the biggest contributors? Consistency. If your brand experience is different every time, customers will struggle to build a relationship. Standardize retail staff training and model what a great customer experience looks like, no matter who you’re talking to or where that conversation takes place.

Create customer feedback loops

Customer feedback is not only a benefit of customer loyalty; it's also a method of building it (hence, the loop).

Encourage customers to provide feedback—both positive and negative. When customers feel heard, valued, and respected, they're more likely to hold your company in high esteem, despite a poor experience. In turn, asking for feedback from your customers can make them feel valued and, therefore, encourage them to remain loyal. 

Use customer satisfaction apps like LoudHippo and Grapevine (which integrate with Shopify POS) to learn how customers feel about your services. Pay attention to where you can improve, then check back in with unhappy customers once you’ve addressed their concerns. This gives you another opportunity to win their loyalty.

Segment customers to personalize their experience

Research shows that half of consumers think personalized offers and promotions from brands they’ve interacted with improve their shopping experience. 

Shopify builds unified customer profiles that sync in-store and online data into a single customer view. Instantly view each customer’s purchase history and loyalty status to run personalized omnichannel campaigns that incentivize loyalty—no matter where they prefer to shop. 

These unified customer profiles provide the foundation for segmentation. For example, you could create the following segments and personalize the outreach each group receives:

• Customers who made their first purchase over a year ago get an anniversary gift in their next order, such as a free sample of a complementary product related to one they usually buy. 
• Loyal customers who usually shop at your Chicago store get early access to a flash sale of new inventory before it officially drops on your ecommerce website. 
• People who’ve unlocked your “free local shipping” reward tier see the incentive in their cart abandonment emails when online shopping.

Promote shared values

Differentiating your product by price or quality alone may not appeal as strongly as it used to. One surefire way to attract and retain satisfied customers, however, is through shared values.

Jared Pobre is the co-founder of Caldera + Lab, a luxury skincare brand for men. His team fosters loyalty by inviting customers to join a journey toward a more sustainable lifestyle. 

"Our content about our best-in-nature ingredients and sustainable business practices show customers that the products they purchase from us are not just good for their skin but are also made in a way that reduces our carbon footprint," he says.

Jared and his team are currently using AI to optimize product quantities personalized to each customer's needs, ensuring customers won't waste any of their purchased skincare and further reducing the company’s footprint. 

"By taking our customers on our mission to help create a clean and healthy world for generations to come, we're strengthening our bond and building loyalty through the authenticity of our mission," says Jared. "We validate the success of our customer retention strategy by measuring the monthly growth rate of revenue from our existing customers. As long as this number continues to climb, we know our efforts are working."

Build a community 

Customer communities are a win-win for both your business and your customers. A dedicated forum of conversation allows you to share important information and ask for customer feedback. Frequent connection with your customers keeps you top-of-mind and makes them feel important and wanted, therefore increasing customer loyalty.

Experiential retail is all about creating memorable and shareable shopping experiences with the idea of building a community around your brand. Consumers have more shopping options than ever; experiential retail can help you stand out.

Whether it's opening a showroom for your ecommerce store (like Allbirds) or holding special events in-store (like LIVELY’s fitting sessions), going above and beyond for your retail experience helps build loyalty among your customers.

Offer gift cards and store credit

Gift cards and store credit might seem like an old school sales tactic, but they work. A credit note gives people a reason to visit your store. And when they do, they usually wind up spending $31.75 more than the gift card’s value, on average.

More purchases also give shoppers greater opportunity to build affinity with your products. Perhaps a first-time shopper didn’t like the moisturizer they initially bought but they’ve got a $5 gift card to redeem on their next order. They try a face mask instead of the moisturizer, which they fall in love with and buy repeatedly. 

For gift cards to work as an effective customer loyalty tactic, they need to work wherever a customer chooses to buy. With Shopify, for example, shoppers can buy a gift card online and redeem it in-store (and vice versa) with no restriction. 

Launch an omnichannel customer loyalty program

Building an omnichannel loyalty program is one of the best and cheapest ways to keep customers coming back. 

Shoppers can earn rewards on every order they place—be that gift cards, discounts, or exclusive access to new products. These rewards can significantly influence your audience's shopping patterns, encouraging them to shop with you over competitors and buy more frequently.

📌 GET STARTED: Want to launch a POS loyalty program that turns first-time shoppers into lifelong fans? Apps like Marsello and Smile work with Shopify POS, so you can start rewarding customers for purchases they make in-store and online.

Types of customer loyalty program

Points-based rewards

A point-based loyalty program rewards points based on customer purchases or actions (such as recommending friends or sharing on social media). Customers can then redeem their points for free products, discounts, and other perks.

Tiered loyalty programs

A tiered loyalty program is similar to a point-based loyalty program, but customers receive different rewards based on their tier. Typically, higher tiers or levels are rewarded based on how much customers spend, thus incentivizing customers to spend more.

💡Tip: Use the “Customer view” app for Shopify POS to show how many loyalty points each shopper has earned at checkout, including any discounts they’ve redeemed. 

Value-based loyalty program

A paid loyalty program offers customers paid access to certain loyalty rewards and bonuses. Instead of rewarding points or perks for every purchase, these programs offer rewards for a flat or subscription fee. 

Paid loyalty programs

A value-based loyalty program encourages customers to make purchases that benefit a third party instead of themselves. For every dollar spent or purchase made, these brands often donate products to a cause or charity, which helps accentuate brand value to build loyalty and revenue.

Gamified loyalty programs

A gamification loyalty program leverages games and challenges to engage and reward customers through quizzes, tests, and games, customers can win badges, prizes, and other rewards to redeem at your store. Gamification is also commonly-used to capture customer data like email addresses and product preferences.

Customer loyalty program examples

Lola’s Cupcakes

British bakery chain Lola’s Cupcakes was one of the first brands to start selling cupcakes online. Now, you’ll find its product in over 40 locations across the UK, including permanent brick-and-mortar stores and collection lockers. 

Instead of relying solely on convenience and great tasting cupcakes to maintain customer loyalty, Lola’s Cupcakes launched a loyalty program known as “Lola’s Love Club”. Powered by Smile, the app’s integration with Shopify allows customers to earn rewards wherever they shop, both in-store and online. 

Retail staff can also view a customer’s loyalty history directly within the Shopify POS dashboard and redeem any rewards on their order—no need to switch between different systems. 

It’s proved a lucrative way to increase customer retention. Since adopting Shopify and building an omnichannel loyalty program, Lola’s Cupcakes has welcomed over 10,000 new members to the Love Club.

Venus et Fleur

Flower buying is an incredibly intimate experience. Whether they’re buying a treat for themselves or a loved one, choosing the right bunch is no small decision. 

After experiencing issues connecting data between different sales channels, Venus et Fleur turned to Shopify to create unified customer profiles. This single-customer view allows retail staff to store and reference each customer’s preferences and order history during the interaction, including their:

• Loyalty tier
• Eligible rewards
• Delivery preferences
• Personalization options
• Greetings card messages 

“Without a holistic view of our customers’ journeys, we knew it would be very difficult to tailor recommendations, personalize communications, and reward loyalty across every sales channel,” says head of ecommerce Brendan Gorman. 

Sculpted by Aimee

Award-winning makeup brand Sculpted by Aimee operates a thriving ecommerce website along four retail stores dotted across the UK and Ireland. 

To capture customer data for future retargeting, retail associates use the email capture feature in Shopify POS to connect in-person shoppers’ details with a Shop Pay account. This lets them personalize outreach long after every shopper leaves the store, both through Shop app campaigns and targeted emails through the Klaviyo integration.

Email capture has helped Sculpted by Aimee increase email capture by 275% across all retail stores. Plus, it found an interesting insight: omnichannel shoppers had a 3-4x higher lifetime value than those who shopped online only. 

"By gaining a full view of our customers and their buying behaviors, there's just so much more we can do in terms of sending personalized offers and even gifts every once in a while," says head of ecommerce Kevin Clarke. "We look at it like we're building a community, which we're excited to continue to expand throughout the rest of the world."

How to measure customer loyalty

The following customer loyalty metrics can help you keep a closer eye on how—and why—your customer retention is increasing.

Net Promoter Score (NPS)

NPS helps you understand the likelihood of a customer referring your services to others. To measure customer loyalty via NPS, ask: How likely are you to recommend our brand to your friends and family?

Customer loyalty index (CLI)

The CLI is a standardized measure of customer loyalty over time. It considers NPS, upselling, and repeat purchases. CLI is different from NPS in that it measures customer intention versus actual behavior.

To track your CLI, add these questions to your survey: 

• How likely are you to buy from us again in the future?
• How likely are you to try our other products?

Customer effort score (CES)

Your CES measures the effort required of your customers to solve an issue or purchase/return a product. Customers tend to be more loyal to products and services that are easier to use.

To measure your CES, ask: "On a scale of ‘very easy’ to ‘very difficult,' how easy was it to [insert action]?" 

Repeat customer rate 

Repeat customer rate measures how many customers are willing to make a second purchase from you. It helps you estimate how likely they are to buy from you in the future.

Calculate yours with this formula:

Repeat customer rate = # of customers that purchased more than once / # unique customers

💡 TIP: Want to see what percentage of your sales come from returning customers over any time period? View the First-time vs. returning customer sales report in Shopify Analytics to see the number of orders and gross revenue your business generates from repeat purchases online and in-store.

Purchase frequency

Purchase frequency measures how often customers make repeat purchases—an important KPI to track as repeat purchases are often the most significant contributor to annual revenue. 

Using the same time frame as your repeat customer rate, calculate your purchase frequency with this formula: 

Purchase frequency = # of orders placed / # unique customers

Average order value

Average order value (AOV) tracks the average value of each customer's order and helps you identify your highest-value customers. 

Calculate yours with this formula: 

AOV = total sales / order count

💡 TIP: View the Sales by customer name report in Shopify admin to see customers’ average order value, total orders, and how often they buy from you.

Get more loyal customers for your retail store

Investing in customer loyalty affords your business reliable, long-term customers who make frequent purchases and share your business with their friends and family.

But only when you have the right foundation—i.e., great customer service, a personalized experience that spans multiple touchpoints, and a reason for customers to keep coming back—can you experience the full potential of a customer loyalty strategy. 

Shopify makes it easy to manage every aspect with one platform to unify everything you know about your customers. It even has the extensive infrastructure required to put that data to work through personalized marketing, segmentation, and automation to deliver the right message to the right person, at the right time.