The four types of customer loyalty

Some of your regulars are not as loyal as you think. Four loyalty types, and how to tell them apart.

Customers are loyal for many reasons, and some are not as loyal as you think.

Whatever drives your guests back, it is worth finding out the intention behind it and building different loyalty audiences around it. Then you can market to each group on a more personal level, and turn every shade of regular into a true brand lover.

The customer loyalty matrix

There are four main categories of customer loyalty, described in research held at Manchester Metropolitan University. They differ by two things: level of brand attachment and price consciousness.

Let's take a closer look at each quadrant.

1. Habitual loyals

This type of loyalty falls under the 'simplest option'.

Habitual loyals are driven by habit. They have no specific preference for a venue, and no intention of looking for an alternative, because they are satisfied enough with what they get.

The common example is the coffee shop on the way to work. Guests are used to going there, but there is no emotional connection to the venue.

Because their loyalty is based on convenience, they are also at risk of switching the moment a better option appears. Such as a smart new coffee place opening round the corner.

2. Transactional loyals

What is the 'cheapest option' with the best offer? That is what transactional loyal customers are looking for when choosing a venue.

They want to save money.

You can keep them coming with regular offers and discounts, but as with habitual loyals, their loyalty is not tied to your venue specifically.

3. Loyalty-program loyals

The third type is the 'satisfying option'.

These guests are engaged and actively interacting with your business, driven by your loyalty program and good past experiences.

Their main goal is to climb the ranks and get rewarded, so they are still price sensitive. But they are genuinely attached to your brand.

They are willing to spend more, and chances are high that they tell friends and family to join your loyalty program.

4. Emotional loyals

These are your most valuable loyal customers. For them, your venue is the only option.

They are deeply connected to your brand because of the ongoing value you create. They identify with you. Call them your brand fanatics.

With high attachment and affinity comes advocacy. They love to spread the word about your place and bring you new guests, for free.

This is the category you want all your customers in.

How to move customers up the matrix

Habitual and transactional loyalty are both forms of passive loyalty. Loyalty-program and emotional loyalty are active.

The question is how to get customers from passive to active. Here are some ideas to get you started.

1. Personalisation

Customers arrive with individual needs and expectations, and habitual customers in particular tend to have clear behavioural patterns.

This is where customer data comes in handy. Use your CRM to build a 360° profile of each guest, so every message lands on something they actually care about.

Instead of sending a generic birthday offer, look at what the guest actually orders. If someone always orders an espresso martini through PayOS, try this email instead: 'Celebrate your birthday with us. The espresso martini is on the house today.'

That extra personal touch can go a long way, and convince passive loyals to switch from a money-driven to a value-driven mindset.

2. Online and offline experience

Hospitality is special because the guest journey has both offline and online touchpoints.

To raise brand awareness and the perception of value, the experience needs to be consistent across all of them. In short: make your brand recognisable everywhere a guest meets it.

Passive customers then become more aware of who they are actually engaging with. Even more so if the whole experience was smooth.

3. Gamification

Gamification adds a fun layer to your loyalty program.

It keeps guests engaged and encourages them to interact with your brand more often, which drives emotional attachment.

And if they are having fun, they will share it with others. Win-win.

4. Referral scheme

A referral scheme is especially useful for moving already-active loyals to the highest level.

Guests get rewarded for their ongoing loyalty, and you show that you value them.

You have chosen them to advocate for you, so they feel proud. That pride strengthens emotional attachment.

Need help separating the loyalty types in your own data? Audiences in Stampede group your guests by behaviour, so each campaign can speak to the people it actually fits.