How to measure Customer Loyalty using SMS

Measure Customer Loyalty using SMS

In today's trust economy, it's easy to judge a brand based on online reviews and consumer experiences. Star ratings and customer accounts can be the deciding factor for potential customers to choose a business to spend with.

So how can businesses stand out? How can brands continue to develop and grow in the everchanging era of convenience? What do customers really want from a business, and more specifically, from your business?

Customer loyalty refers to consistently choosing a company's products and services over competitors. A loyal customer is not easily swayed by price or availability, and would rather pay more to ensure quality service and products from the brand they trust most.

Loyalty is usually achieved by a combination of positive first impressions, exceeding expectations, substantial customer experience, engagement, and communication with customers. But how do you measure it?

Ask, and you shall receive

Include customers in the conversation by asking for their input.

For businesses to understand what its customers' expectations are, what its shortcomings are, and how to improve, first, they must ask the right questions.

It's essential to learn how the customer experience currently works, and how it could be better, for both first-time customers or repeat buyers. Retaining business can be determined by how likely customers are to become loyal brand ambassadors, or how likely they are to leave a brand.

Measuring how likely a new customer is to become a loyal brand ambassador can be tracked using multiple methods. But the initial step is the most important; communication.

Related: 'Why your retail business needs to get personal'

Why is measuring Customer Loyalty important?

Without satisfied customers who are happy to consistently buy from you, your business will not survive. The company will be perpetually chasing its metaphoric tail to get new customers when retaining loyal ones would yield long-term benefits.

Did you know it costs more to acquire a new customer than to retain one? Studies prove time and time again that it's in your best interest to retain customers. Not just to save money on acquisition, but also to keep profits high. New customers tend to spend less than loyal, repeat customers who already trust your business. That's right, existing customers spend up to 67% more than new customers.

According to Havard Business School, a 5% increase in customer retention boosts profits by a minimum of 25% to 95%. The statistics around customer loyalty speak for themselves.

Gathering feedback

Customer loyalty is more important than ever since the introduction to eCommerce and easy-to-use online platforms. Getting customer feedback is the first step in developing a strong customer retention strategy and building your customer base.

There are many ways to measure loyalty, how you track customer interactions will determine that outcome. Although rewards programs help with tracking customer touchpoints, they are not always necessary to gain insight into customer loyalty.


The relationship between business and consumer is not one-way. Communication is key to building trust and long-term confidence in a brand.

Whether a customer's first brand interaction is face-to-face or online, the business must gather some form of contact information with consent. This will ensure a second touchpoint for the customer to receive personalized marketing content and news updates.

Gathering contact information also allows you to tracks their interactions and ask for feedback regarding their experience. It could be via email, phone, SMS, LiveChat, or OTT messaging. Keeping within privacy guidelines, collecting customer details on Customer

Relationship Manager (CRM) software can assist with tracking interactions.

SMS feedback

Out of all the methods to directly communicate with customers, SMS is the most efficient. SMS is personal by design, has a high open and click-through rate, with a short and concise message.

Perfect for notifications, event reminders, and marketing content, SMS also provides two-way texting. Gathering feedback from SMS surveys and calculating customer loyalty metrics can easily be managed and executed through a business SMS gateway. No fuss.

Related: 'Why SMS is an ideal tool for customer surveys'

Methods of measurement

These retention metrics are the perfect starting point on understanding how much your customers trust your brand and the likelihood of repeat business.

Customer Lifetime Value: CLV calculates the value an individual customer will bring to a business over their entire life. There are a few different variations in measuring CLV, depending on the company.

Repeat Purchase Rate: RPR represents an immediate snapshot of customers that have made a repeat purchase from you to date.

Net Promoter Score: A little different from CLV and RPR, NPS is a standardized metric that categorizes customers. It includes a survey asking customers to rate how likely they are to recommend your brand to others on a scale of 1-10. This method divides customers into three categories by how they rate a brand: Promoters (9-10), Passives (7-8) and Detractors (0-6)

  • Promoters are loyal enthusiasts who will continue to buy and recommend the brand to others via word-of-mouth and good reviews
  • Passives are satisfied customers but unenthusiastic and open to buying from competitors
  • Detractors are dissatisfied customers in some way and could potentially ruin the brand reputation through contrary word-of-mouth

Related: 'How to calculate your Net Promoter Score in minutes using Two-Way SMS'

Loyalty Programs provide incentives and rewards to customers to increase retention and repeat purchases.

Although businesses do not need a loyalty program to measure customer loyalty metrics, it sure does help. Sometimes, a company might need to measure customer loyalty to gauge whether they should implement a loyalty program, to begin with.

For customers to redeem exclusives offers that come with loyalty programs, they first must signup. Usually, loyalty program members are given a VIP card that automatically adds discounts and free gifts when presented at purchase. It also allows the brand to track each and every purchase closely.

To truly benefit from a loyalty program, the business can measure different aspects of customer engagement.

  • Participation Rate - the percentage of customers enrolled in the program
  • Redemption Rate - the percentage of program incentives that are utilized by enrolled customers
  • Active Engagement Rate - the percentage of enrolled customers that use the incentives offered by the program

To find out more about how to implement Customer Loyalty surveys via SMS, head to our Information Centre or get in contact with us at

We also have an eBook on how to utilize Two-Way for Business, including NPS, SMS Support, and Reporting.