Wondering what makes a customer loyal, how loyal customers are across industries, and how to gain loyal customers? My colleagues and I had the chance to answer these questions and more as part of our new customer loyalty research study conducted by ����ԭ�� Market Research. The findings are available in our new report: Redefining Customer Loyalty.

The customer loyalty statistics shared here are based on an April 2022 analysis of the following: ����ԭ��’s credit/debit transaction panel for behavioral metrics, tracking the activity of over 5 million opted-in consumers within the airline, hotel, restaurant, and retail industries, combined with a separate survey panel for attitudinal data with a sample size of 2,022 general population restaurant and retail customers, 1,650 general population hotel and airline customers, and 1,474 pre-Covid hotel and airline business travelers.

What Makes a Customer Loyal to an Airline, Hotel, Restaurant, or Retail Brand?

When our team asked survey participants to share the top reasons they feel loyalty toward a particular brand, consumers consistently cited that one of the main factors is that the company is the first to come to mind when they think of a given product or service category. This was the #1 reason cited by retail customers, the #2 reason for hotel customers, #3 for restaurant and airline customers, and #1 overall for customers across industries. 

Based on the survey responses we received, we found that the other top drivers of customer loyalty include:

• Product quality: This is the #1 factor that influences restaurant and retailer customer loyalty
• Loyalty program membership enrollment: Hotel and airline customers say this is their #1 driver of loyalty
• How often the customer purchases from the brand: Being a frequent purchaser is the #2 reason restaurant and retail customers say they feel loyal to a brand and the #4 and #6 reason hotel and airline customers say they feel loyal to a brand, respectively

In fact, consumers say these factors influence their customer loyalty more than when brands support causes they care about (the #13 factor that drives customer loyalty across industries, according to our research), when a brand is one that their friends or family prefer (#9), or when customers have a personal relationship with the brand’s staff or owner (#12).

How Can Brands Increase Customer Loyalty?

Based on the survey responses we received, we see that brands that want to increase customer loyalty should prioritize strategies that place their brand top-of-mind for their customers over the competition, such as by investing in .

Within the airline and hotel verticals specifically, we see that consumers associate the idea of “loyalty” with brand’s loyalty rewards program, citing being a member of the company’s rewards program as their #1 reason for feeling loyal to a brand. This is true to a lesser degree for retail customers as well, who cite this as their #3 reason for feeling loyal. There’s not as strong a link for restaurant customers, who cite this as their #7 choice among the top factors that drive their brand loyalty.

When our researchers asked our study participants what a brand could have done differently to make them more loyal, they said brands could lower their prices and offer better value for the money — choices that ranked in the top three responses across airline, hotel, restaurant, and retail customers.

What’s the Best Way for Brands to Measure Customer Loyalty?

Brands typically measure customer loyalty by looking at data from their own internal systems, tracking things like purchase frequency, lifetime value, NPS® survey responses, and engagement. While these measures can reveal how different segments are performing — pinpointing active customers versus inactive ones and promoters versus detractors — this limits insights to interactions between consumers and a given brand, and fails to provide any competitive context on that consumer’s behavior with a given product category as a whole.

For instance, your customers might engage with your brand frequently, but that could simply be a reflection of the fact that they engage with your industry frequently as well. With the added layer of external insights, you would be able to see if your customers are actually interacting with your competitors at a higher frequency — something your internal data won’t reveal.

That’s why ����ԭ�� Market Research approaches things differently. We measure customer loyalty by tracking consumer panelist activity within the entire market. That way, all of the market activity of a given consumer is considered — such as dollars spent or number of trips to both you and your competitors — to determine what market share of loyalty your brand is earning.

Measuring customer loyalty in this way helps differentiate which customers truly are demonstrating loyalty by spending a high proportion of their total in a given category to one brand over the competition. If you want to detect competitive threats and opportunities for improvement in your category, be sure to benchmark your customers’ share of spend against your competitor’s customers’ share of spend.

Which Industry Has the Most Loyal Customers?

As part of our research into customer loyalty, we wanted to find out which industry has the most loyal customers within the airline, hotel, restaurant, and retail industries. Our team looked at how many customers are represented in each industry, how frequently they make purchases, and how many brands they make purchases with within a given vertical.

Based on our analysis, we found out that airlines, followed closely by hotels, have the biggest share of loyal customers, compared to restaurants and retailers.

It is true that fewer people in the population are customers of airlines and hotels and that these consumers complete transactions with these brands less often than the customers of restaurants and retailers do. As a result, a given consumer may spread out their activity across a smaller number of airlines or hotels than they would within the restaurant and retail industries, and will appear more “loyal” to the airline or hotel they use most often. However, airline and hotel brands see a more loyal average customer even when controlling for this.

Redefining Customer Loyalty

Customer loyalty is a critical driver of success for brands. If you want to make the most out of your investments in customer loyalty, be sure to check out our full Redefining Customer Loyalty report.

You’ll learn how the customer loyalty landscape is evolving, get the latest insights on what’s shaping customer loyalty today, and unlock new ideas for adapting your customer loyalty strategies to gain a competitive advantage within your industry as our researchers reveal how the pandemic has affected customer loyalty, whether customer rewards programs really help improve loyalty, how consumers feel about brand loyalty programs, and what features customers want to see in customer loyalty programs.

Wondering what sets companies with a successful customer experience apart from the rest? That’s exactly what our researchers at the ����ԭ�� Institute set out to investigate. For answers, they conducted an analysis of the customer experience programs of over 580 brands. As part of this study, they surveyed marketing and customer experience professionals representing organizations with more than 100 employees based in the U.S., Canada, Mexico, Argentina, Colombia, Great Britain, Germany, France, Spain, New Zealand, and Australia. 

What they discovered reveals the top customer experience strategy best practices that deliver the greatest customer and business outcomes, where organizations have the biggest opportunity to maximize their customer experience strategies, and the tactics that separate top performers (the “leaders”) from those at the bottom (the “laggards”). 

Let’s dive into these critical findings now, so you can start putting these customer experience strategy best practices into motion right away.

Top 9 Customer Experience Strategy Best Practices

Upgrade your website. Elevate your contact center. Delight customers visiting your storefront. Whatever your customer experience priorities, leveraging the following tactics will help you gain a better understanding of your customer experience so you can maximize each and every customer interaction across channels and across the customer journey.

1 & 2: Collect customer feedback and track customer sentiment: CX leaders are 2.5 times more likely than laggards to indicate that they have enough data to understand their brand’s customer experience.

3: Gather customer insights across as many channels as possible. Leaders are 3.3 times more likely than laggards to prioritize increasing the amount of customer feedback they collect. On average, leaders use more than three (3.3) channels to capture voice of the customer insights, compared to the 2.4 channels laggards use. 

4: Capture as many types of customer experience data as possible, including direct and indirect customer signals, structured and unstructured customer data, and feedback that’s both internal to the organization and external.

Nearly 50% of customer experience leaders say they capture unstructured data from their contact center chat and call sessions, and more than 33% of leaders say they capture customer feedback from third-party online review websites. 

5: Analyze your organization’s customer experience intelligence on a regular basis. Customer experience leaders get ahead by measuring and making sense of their customer data more often than laggards, and by using these more relevant insights to guide their customer experience priorities. According to our research, nearly half of leaders (47%) analyze their data on a monthly basis, compared with just 27% of laggards.

6: Democratize your company’s customer experience data across the entire organization. Leaders are nearly 2 times as likely to grant their employees direct access to customer feedback that’s relevant to their specific role. 

7: Use your customer experience insights to fuel data-driven decision making. Compared with lagging organizations, leading brands are 3.5 times as likely to use this data to drive actions across the organization.

8: Prioritize investing in employee experience to improve the customer experience. The majority of customer experience leaders (61%) say that improving employee experience and loyalty is an area of strategic focus for the next 12 months, compared with just 20% of laggards that say the same.

9: Use technology to deliver seamless personalized customer experiences. More than half of customer experience leaders (54%) use customer data to automate action and follow up on feedback in a timely fashion using technology, compared with only 24% of laggards. 

The ROI of Using Customer Experience Strategy Best Practices

Based on our ����ԭ�� Institute survey, we found that leading organizations that put these customer experience strategy best practices in place are:

• 26 times more likely than laggards to experience year-over-year revenue growth of 20% or more
• 2.8 times more likely than laggards to meet financial targets and be viewed as a great place to work
• 3 times more likely than laggards to achieve high levels of employee satisfaction and retention

The return on investing in customer experience is clear, and, fortunately, it’s easier than ever to put effective tactics in place to make a difference for your customers, your employees, and your business as a whole. 

The hospitality and travel industry’s recovery is on many people’s minds as vaccines continue to roll out and the end of the pandemic is in sight in some parts of the world. As guests begin to return, their behaviors have changed. That means guest feedback and engagement have become more crucial for hoteliers as they head into the next normal.

Why is guest feedback important? Not only does it provide a window into guest satisfaction, but it offers a way to adapt your operations to better serve customer preferences and needs. It also allows you to gain insight into ways you can innovate to stay ahead of the competition.

But, just collecting customer feedback is not enough. As hoteliers look for new ways to increase bookings, preferably direct, engaging with customers will be key to gaining guest loyalty. Recent , conducted in partnership with ����ԭ��, shows that while engagement and interaction between hoteliers and guests are taking new forms, it is still as important as ever and a key driver for the insights that will lead to innovation that puts brands a step above the competition.

Here’s what the research shows as you embark on how to create a customer engagement strategy that works for you.

How customer engagement boosts business

Engagement and interaction between hoteliers and guests are taking new forms but are still as important as ever, the research shows. Customer engagement is a key driver of guest satisfaction and loyalty — and can lead to a lift in direct bookings as a result.

According to the research, a customer’s willingness to share feedback, along with hotel management’s response, affected these four elements:

1. Future guest satisfaction: When hotel management acknowledged service shortcomings and offered personalized and detailed apologies, guest satisfaction improved on future stays.
2. Tendency to share reviews online: A quick thank you from the hotel after receiving feedback increased the likelihood that the guest would share a review online after their next stay. On the flip slip, researchers found that overly detailed thank you messages could deter guests from sharing future reviews.
3. Loyalty: Feedback provided by guests, whether it was positive or negative, signaled a willingness to engage with the hotel brand. It increased the chance of the guest becoming loyal by almost 50%. The likelihood of becoming loyal increased even more when management responded to guest feedback.
4. Booking channel: When customers engaged with the brand via a guest satisfaction survey, they were less likely to book via a third party and instead book direct. As a result, hotels that engaged with guests reduced OTA commissions by 5% — savings that were further increased when managers responded to guest feedback.

3 tips for engaging with customers

Engaging with customers can help to grow advocates for your brand when current customers are more willing to share their experiences via reviews for prospective customers to see. Here are three ways you can set yourself up for success.

1. Solicit feedback: Let your customers know that you want their opinions. Request feedback via guest surveys and encourage your customers to share their experiences online.
2. Show you’re listening: Customers will know your brand is open to listening to them when they see you respond to reviews. Make sure you offer personalized and relevant responses to demonstrate you are actually reading the feedback.
3. Act on feedback: Listening is great, but it doesn’t mean much if you aren’t acting on what you learn. Your guests are telling you what they need for a stellar customer experience. Listen, learn, then act to stay ahead of competition and gain loyalty.

The research found that consumers new to providing reviews online are disproportionately negative. If you rely on customers to be self-motivated to post reviews, you could be left with a biased view of satisfaction that tends to be less positive. You need to facilitate and make it easy for your customers to share their feedback if you hope to get a clear picture of guest satisfaction.