How to measure brand loyalty: 11 key metrics to track

Businesses worldwide measure brand loyalty to support customer retention, drive growth and attract new customers. A strong brand loyalty strategy helps companies minimise customer churn and build a better brand reputation.

Brand loyalty is shown when customers repeatedly buy from a business rather than choosing competitors. Loyal customers will repeatedly shop for a particular brand’s products. Now more than ever, companies should prioritise customer loyalty to build lasting relationships. 

Not sure how to measure brand loyalty? This guide explores 11 key metrics and essential best practices.

Measuring brand loyalty involves more than tracking loyalty programme sign-ups. It also involves identifying brand advocates to establish sustainable growth and profitability. Businesses should track brand loyalty in today’s competitive market to improve customer experiences and retention rates. 

A McKinsey & Company study highlighted the value of brand loyalty, showing that loyal customers are 64% more likely to make frequent purchases and 50% more likely to recommend the brand to others. 

Tracking brand loyalty provides businesses with valuable insights into customer behaviour. By collecting and analysing data, teams can refine marketing strategies, enhance product design and boost revenue. 

Measuring brand loyalty benefits businesses in many ways, including:

Brand loyalty can be measured in many ways, making it challenging for some businesses to know where to start. While you may not need to monitor all 11 metrics at once, it’s important to gather a mix of qualitative and quantitative data to gain deeper insights. 

Businesses should use surveys as a primary method for collecting customer data when measuring brand loyalty. Surveys are easy to create and send, and they can gather customer feedback. The data can then be analysed to identify patterns, common pain points and customer sentiment. Brands should track trends over time using the following metrics to see the long-term impacts of their brand loyalty strategy. 

Net Promoter Score is one of the most commonly used metrics for brand loyalty. It asks customers a single question: On a scale of 0 to 10, how likely are you to recommend our brand to friends or colleagues? 

Customers are divided into three groups based on their responses:

To measure NPS, use this formula.

NPS = % of promoters - % of detractors

Businesses can also use this handy NPS calculator to determine their score out of 100. NPS is an efficient way to gauge customer loyalty over time. Since millions of businesses worldwide use NPS to measure customer loyalty, you can easily reference benchmarks. NPS offers a simple, fast and actionable way to measure brand loyalty.  

Customer retention rate measures the percentage of customers who remain with you over a specific period. It’s the opposite of customer churn, which tracks the percentage of customers who stop doing business.

The formula for customer retention rate is:

Customer retention rate = ((End number of customers - New customers gained) / Starting number of customers) x 100

Customers come and go, but keeping them around is a valuable growth strategy. It is much more expensive to acquire new customers than to retain old ones. Studies show that acquiring a new customer can cost five to seven times more than keeping a current customer. To improve customer retention, focus on personalising customer experiences and fostering brand engagement.

Customer lifetime value measures the value a customer is worth throughout their entire relationship with a business. It is the estimated amount of money a customer spends from when they are first acquired to when they stop doing business with a brand.

Use this formula to measure customer lifetime value:

CLV = (Average product price) x (Frequency of purchases per year) x (years of being a customer) 

Brands can increase customer lifetime value by sending surveys that gather direct insights into customer needs. Surveys can help you identify pain points, enhance product development, boost customer satisfaction and improve customer support. By collecting customer experience data through surveys, brands can effectively raise their average CLV.

Customer satisfaction score tracks how customers feel about your brand and their experiences. CSAT surveys usually use a 1–5 or 1–10 rating scale to measure customer satisfaction. 

The formula to calculate CSAT is:

(Number of satisfied customers / Total number of responses) x 100 = % of satisfied customers

Analysing customer satisfaction is more nuanced than it may seem, but most businesses can usually compare their scores to this scale.

Further reading: What is a good CSAT score? 

Customer effort score measures how much effort customers need to put in to interact with your brand. CES surveys are usually sent immediately after specific customer interactions, such as completing the checkout process or after a support call or chat. 

It uses a scale from 1 to 7 to answer the question, “How easy was it to [insert customer interaction] today?” with 1 being very difficult and 7 being very easy.

Use this formula to calculate customer effort score:

CES = (Sum of responses) / (Total number of responses) 

To use CES, brands can include open-ended questions in the CES survey to gather qualitative insights. SurveyMonkey offers a CES questions template to help you get started with your survey.

Customer loyalty index is a standardised metric for tracking customer loyalty over time. It uses customer feedback surveys to quantify the strength of your customer relationships. CLI surveys are based on three main components:

Measuring NPS alongside two additional factors provides brands with a comprehensive understanding of customer loyalty. CLI scores of 9–10 are excellent, 7–8 are good, 5–6 are average, 3–4 are poor and 1–2 are critical.

To calculate CLI, use this formula:

CLI = (Average NPS + average repurchase likelihood + average customer satisfaction) / 3

Many businesses calculate their CLI score every quarter to track changes over time. You can encourage greater customer loyalty and achieve better scores by delivering high-quality products and services, introducing loyalty programmes, gathering and acting on feedback, etc. 

Repeat purchase rate is used to measure how often customers make purchases. This metric reflects purchase frequency, which is a strong indicator of brand loyalty. Loyal customers return to their favourite brands time after time. You can track RPR regularly to monitor improvements in customer retention. 

The formula for calculating repeat purchase rate is: 

RPR = Number of customers who have purchased more than once in a year / Total number of customers in a year

Brands can improve their RPR by personalising marketing campaigns, offering a smooth shopping experience and introducing loyalty programmes. A high RPR signals strong retention rates and highly engaged customers. 

This key performance indicator (KPI) enables brands to monitor how effective their upselling strategies are. Upselling happens when a brand encourages customers to buy upgraded or higher-priced product options. 

Upsell ratio is a percentage measuring the proportion of upsell revenue generated compared to a business’s total revenue. Upsell ratio helps companies understand which customers feel loyalty towards their brand. 

The formula is as follows:

Upsell Ratio = (Upsell revenue / Total revenue) x 100 

To improve their upsell ratio, brands need to build trust and satisfaction among customers. Prioritise delivering high-value products that meet customer expectations to foster trust. Investing in customer service training can also enhance interactions between your staff and customers. 

Churn rate, also known as attrition rate, is a vital brand loyalty metric that businesses should monitor regularly. It represents the percentage of customers who stop doing business with your company during a given period. If your monthly churn rate is high, it’s essential to focus on your brand loyalty strategy. Churn rate is a key indicator of customer satisfaction and should be monitored to drive continuous improvement.

To calculate churn rate, use this formula:

Churn rate = (Customers lost during period / Total customers at the beginning of period) x 100

Building brand loyalty and reducing churn rate takes time, but collecting actionable customer feedback through surveys is an excellent first step. Brands can use this feedback to improve their products, marketing and reputation.

Actively engaged customers are more likely to appreciate your brand and its products. Active engagement rate is another metric brands can use to measure customer loyalty. At its core, AER looks at customers’ behaviours and brand involvement. This can include commenting on social media posts, sharing blog content, creating content showcasing your products, etc. 

AER can be measured in different ways depending on the platform. For example, you may track time-on-page and shares for blog content on your website, but then track likes, follows and comments for posts on Instagram. 

Participation rate measures the percentage of customers who actively take part in a brand’s loyalty or rewards programme. Simply signing up for a loyalty programme to receive an initial discount doesn’t necessarily make someone a loyal customer. Customers who truly engage with their loyalty perks are more likely to make repeat purchases. Referring friends is another sign of advocacy and genuine brand loyalty. 

To measure participation rate, use this formula:

Participation rate = (Number of active programme members / Total number of programme members) x 100

Brand loyalty programmes encourage customers to shop more frequently to earn points or build status. They also often include certain perks and frequent discounts to attract customers. The importance of loyalty programmes to brand loyalty is profound. Research shows that 84% of consumers are more likely to keep shopping at a brand that offers a loyalty programme.

Brand loyalty is an umbrella term covering the different levels of loyalty a customer can have towards a brand. Customers may fall into three levels of brand loyalty. We’ll break down each level and share tips for helping customers climb the loyalty ladder. 

Brand recognition is the first and lowest tier of brand loyalty. It means customers can identify your brand by its logo, jingle, tagline or similar elements. Your marketing strategy plays a crucial role in building brand recognition among new customers. Once a customer recognises your brand, you can move them up the loyalty ladder through personalised marketing and outstanding customer experiences.

At the brand preference stage, customers will choose your brand over competitors, even when similar alternatives are available. This is often when true brand loyalty develops. Customers at this level might also share their positive experiences, strengthening your brand reputation. To move customers up to the next stage of brand insistence, focus on delivering top-quality products, asking for customer feedback and making decisions that put customers first.  

Brand insistence is true brand loyalty. Think about customers who buy the latest iPhone when it’s time to upgrade. They don’t even consider other brands’ options and are insistent on the iPhone. Customers have developed deep trust in brands by reaching this stage and are likely to have a high lifetime value. 

These 11 metrics help brands around the world measure brand loyalty and improve customer experiences. Measuring brand loyalty offers a wide range of benefits, from boosting sales to increasing customer retention. Brand marketing managers can use these metrics to assess the effectiveness of their marketing strategies. Promote better brand health by tracking brand loyalty with SurveyMonkey. 

SurveyMonkey enables marketing and customer experience teams to send brand tracking surveys quickly and easily. Keep your finger on the pulse of brand loyalty and gain valuable insights to drive improvement. Sign up to start tracking brand loyalty today.

Net Promoter, Net Promoter Score and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc. and Fred Reichheld.