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In general, one of the best ways of measuring customer loyalty is to become educated about the behavior of past and current customers. This includes tracking sales, buying behavior, and the timing of purchases. It can also be helpful to collect information directly from customers.
One way of measuring customer loyalty is to track sales over long periods of time. Regular sales events or promotions that see a high level of returning customers indicate some loyalty, but customers who return at several intervals throughout the year, regardless of any special conditions, are generally more loyal. Data tend to be most useful when studied over longer periods of time, because regular buying patterns are easier to determine without the distraction of the one-time or short-term events. One-time or short-term events can affect sales dramatically over a brief period, but they generally have little effect in the long run.
When measuring customer loyalty by asking for direct feedback, it is advisable to ask questions based on intentions rather than whether or not a customer is satisfied. Questions that can help determine if a customer is loyal include asking if they will buy again and if they will recommend the business to others. It can also be helpful to learn if the customer was dissatisfied by any aspect of the experience with the business, because customers who are willing to share what it would take to increase their satisfaction are in essence saying that they want to be loyal to the business.
Another way of measuring customer loyalty is by tracking the response rate to any kind of questioning. While a high percentage of negative responses can indicate that there are a higher number of angry rather than loyal customers, a certain amount of constructive criticism can be a sign of investment in the company. In general, a large number of responses to any query by the company typically means that customers are engaged and willing to participate in any effort to improve, and thus bolster, the chances of success for a company.
It is also possible to measure customer loyalty based on what is available for purchase and what kinds of terms are attached. If customers tend to only return for sales or because of an incentive program, then they may not be willingly loyal. This can also be true if it is difficult or expensive to make the change to another company. The most loyal customers return by choice, regardless of any other conditions.
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