Customer Loyalty Loop: Definition & Model

Instructor: Ian Lord

Ian is a real estate investor, MBA, former health professions educator, and Air Force veteran.

In this lesson, we will examine the customer loyalty loop. We will explain customer purchasing behavior, in the context of brand loyalty, as we go through the steps.

Customer Loyalty Loop

Leo has been tasked with explaining to his Business 101 classmates how customers make the final decision to purchase items in the customer loyalty loop model. The customer loyalty loop is a customer service concept that illustrates how consumers decide what they buy, and then continue to make purchases from a given company again in the future. The model recognizes that, in real life, once people make a purchase they tell others what they think about the product, but constantly reevaluate if they should stick to that brand. It attempts to serve as a replacement and more realistic model for the funnel concept of marketing. If the future business professionals of Leo's class understand how the loop models consumer behavior, they can eliminate the consumer's consideration and evaluation of other brands, and keep the consumer as a customer as well as a promoter of the brand.

Customer Loyalty Loop

The Four Stages

The stages of the customer loyalty loop represent decision points for customers. At each stage, the customer makes a choice that determines whether or not the customer remains loyal to a particular brand. Marketing professionals can consider and target their efforts with these stages in mind to attract and retain customers.

Consider

The customer loyalty loop begins with a consideration trigger. The customer sees or hears of an item and thinks about buying it. He sees his friend has this product, or he has seen an advertisement and thinks ''I want one of those''.

Evaluate

The customer begins to consider if he should buy the product. He will begin to look at reviews or ask friends what they think about it. The customer seeks information from any source possible, including retailers and the company itself. A successful evaluation leads to the buy stage.

Buy

It seems pretty simple; Leo has considered and evaluated the product and has decided to buy it. It's not that simple in marketing though. The buy stage offers yet another series of subtle decisions. Often a customer might choose to purchase the item, but go home with the idea of sleeping on it. He may also choose to purchase it online, or from a retail competitor. The buy stage gives marketers an opportunity to convince the customer to buy now. Packaging, product placement, pricing, availability, and any special incentives at the point of purchase play a major influence in whether or not a customer will make an immediate purchase.

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