Retention Unlocked: Transforming Customers into Advocates

Retention vs. Loyalty: What’s The Difference? 
Customer retention versus loyalty are often two sides of the same coin. Loyal customers can be retained and retained customers can be loyal, both factors are mutually inclusive but not guaranteed. While retention measures whether a customer continues to do business with you, loyalty asks how inclined a customer is to keep responding positively to you, keep doing business with you and their likeliness to resist your competition.  
Both factors are modelled and measured differently, each prioritising distinct individual elements. With loyalty, customers can be passively loyal or active advocates of the company, and three potential behavioural responses should be accounted for:   
•    whether the customer will increase or expand their level of business with you,  
•    how your company can influence customers to your benefit, 
•    and whether they will actively advocate for you via reviews and word of mouth.  
 
Modelling Customer Loyalty 
Hubspot, a CRM platform, suggests a model for measuring customer loyalty that includes calculating: 
•    the time between purchases, where a general rule is the lesser the time, the better the customer lifetime value. The higher this value, the more customers are willing to spend with your business, indicating an uptick in loyalty. However, this rule is industry, company and product-specific.  
•    The customer satisfaction score, found through post-purchase or post-interaction surveys; the higher it is the more loyal your customers are. 
There are internal elements that are important to customer loyalty too: employee engagement and prioritising customer service within the company itself.  
 
What is a ‘Net Promoter Score’? 
A Net Promoter Score (NPS) can show you who your loyal and returning customers are.  
The calculation begins by conducting customer surveys asking how likely they are to recommend your company to someone. On a scale of 1-10, scores of 9-10 are considered ‘promoters’, those assuring others about your company, those that should be rewarded with the previously mentioned ‘reciprocity’. Scores of 6 and below are ‘detractors’, unhappy customers you should reach before their opinion of your company solidifies negatively. Scores of 7-8 are neutral, passive people who could be swayed by the competition. They are not included in the NPS calculation.  
Subtracting the percentage of detractors from the percentage of promoters calculates the NPS, which will fall between -100 and 100. Bain & Company, where the NPS system is trademarked, believe that any positive integer as a score is a good sign, but anything about 20 is particularly favourable, a score above 50 is extremely good and one above 80 is outstanding (source). 
Such regular surveys (with as many customers as possible) to calculate the NPS can show you your customer loyalty, thereby allowing you to increase business. It is best to keep the survey brief and time it opportunely, such as soon after a purchase or a customer service interaction, considering the customer journey and ensuring they are not fatigued by a survey. Choose the dissemination channels strategically, e.g. sending the survey via email, instant messaging, or in-app. Consider the culture and location of your company for the score too, as certain societies may be societally predisposed to sharing more positive or negative reviews. The industry matters too, as customers who do not usually enjoy interacting with certain bodies such as the tax office, are inclined to reflect their negative view. Of course, always consider your company’s previous scores as a benchmark to be beaten in this process, so the company can constantly grow.