Measuring Customer Loyalty

Measuring customer loyalty is not only a means of identifying a target audience for marketing programmes, but it also facilitates assessing the performance of implemented advertising and promotion strategies. In order to measure customer loyalty, information is required on, for example, the frequency of purchase, the value of purchase and its contribution to total revenue. In assessing the impact of a marketing campaign, the difference in these factors has to be weighed against the cost of their implementation.

This information is already available to a retailer through its EPOS scanning terminal. More specific customer information can also be obtained by issuing shoppers with a card and PIN number. Purchase information can then be recorded each time customers pay at the checkout. This kind of information is quantitative in nature and not qualitative. It will show the trend in consumer behaviour, but it cannot explain it. Explanations can only be obtained through consumer surveys and interviews.

Source: Samways and Whittcome14

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