Customer loyalty: a vital business strategy

The relationship with regular customers is one of the most important success factors in the business world, and companies with regular customers are often set for success. A whole host of different measures can be used to turn one-time customers into regular customers, from personal contact at events to technical tools such as newsletters. The goal is always to ensure that customers have a positive opinion of the company because a happy customer means more income and more customer referrals.

Definition: what is customer loyalty?

The usual meaning of customer loyalty is a process consisting of various measures with the intention to turn one-time customers into repeat buyers. This loyalty can arise in a range of different ways. For example, there are customers who stay loyal to a company because it stands for certain values, because it offers a service that is hard to find elsewhere or because it strikes an emotional, empathetic chord.

Generally speaking, it should be borne in mind that customer loyalty is a long-term process. It starts right at the first exchange and stretches over the whole duration of the company-customer relationship. Missteps such as poor customer service or losing customers to competitors are signs of failures in this relationship. A company with a good mind for customer loyalty must always repeat the following mantra: the customer is always right, and happy customers mean that your business is right, too.


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Why is customer loyalty important?

Customer loyalty plays a crucial role in how successful and lucrative a business is. This applies to both service providers and product retailers – every company strives to ensure that customers don’t use them just the once but instead come back often, bringing a regular income with them. This also involves the intention to beat the competitors and to prevent customers turning to other businesses instead. Successful customer loyalty breeds trust and keeps people close by.

A lot of companies put a lot of time and energy into building a customer base, i.e. winning over new customers. However, in the process, a lot of them forget just how critical it is to also make sure existing customer relationships are maintained and strengthened. Happy customers or users that stay faithful to a company over a long period of time are much more valuable for the success of a business as they will share their experiences with others. Positive exchanges via word-of-mouth recommendations and online reviews improve referral rates for a company, which by default brings in new customers. This process can be referred to as referral marketing.

Happy regular customers don't just contribute to the image and earnings of a company – they also significantly help with improving everyday processes. For example, it is rarer for regular customers to criticize a product, and if they do, the customer communication is usually more positive as they have already had good experiences in the past. Furthermore, regular customers often provide useful feedback to help the company improve its services. This can be obtained through direct discussions or gathered via technical tools such as online surveys.


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How does customer loyalty work?

To foster stable, long-term relationships between your company and your customers, you can take various steps to strengthen customer loyalty. We’ve gathered together the most important ones for you here:

  1. Positive interactions with customers: Companies that want their customers to stick around for the long haul must give them the feeling that they are valued and appreciated. Companies that come across as friendly, honest, and reliable have nailed the three major criteria of dialogue marketing.
  2. Customer bonuses and gifts: From discounts to exclusive branded gifts, customers love it when a company shows its gratitude for their loyalty with different gestures. Regular customers in particular should be treated to little extras or other bonuses.
  3. Technical support: Companies use both social commerce and email marketing to establish and strengthen contact with their customers. One popular method is personalized newsletters containing special offers, or even holiday greetings.
  4. Events and projects: Companies can also forge tighter bonds with their customers during special events. Workshops, a series of lectures, or joint campaigns with other companies can all be ideas for this. More than anything else, public support for charities will leave customers seeing companies as positive and engaged entities.
  5. Closed-system offers: If a company makes its services or products only compatible amongst themselves, this means by default that it ties its customers to its offer and locks out the competition. However, this tactic does come with the risk of damaging customer satisfaction if consumers feel that their choices are being restricted.
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