And they stick with a business over time. Loyal customers are worth the special effort it may take to keep them. A customer loyalty index provides management with an easily understood tool that helps focus the organization toward improving satisfaction and retention, for apositive impact on the bottom line. To better understand the concept of customer loyalty, let's first define what customer loyalty is not. Customer loyalty is not customer satisfaction.
Satisfaction is a necessary component of loyal or secure customers.
However, the mere quality of being satisfied with a company does not necessarily make customers loyal. Just because customers are satisfied with your company today does not mean they will continue to do business with you in the future. Customer loyalty is not a response to trial offers or incentives. If customers suddenly begin buying your product or service, it may be the result of a special offer or incentive and not necessarily a reflection of customer loyalty. These same customers may be just as quick to respond to your competitors' incentives.