7 Types Of Customer Loyalty & How to Strengthen Them

Did you know loyalty isn’t just one-size-fits-all? Believe it or not, there are 7 distinct types of customer loyalty, each rooted in consumer behavior theory and hidden within your customer data.

Surprising, right? In this guide, we’re unpacking all 7 types to help you understand them inside and out. Also, we’ll share proven strategies to strengthen customer loyalty so you can skyrocket retention and fuel long-term success.

Let’s get started!

What Is Customer Loyalty?

Customer loyalty refers to the tendency of customers to continue purchasing products or services from a specific brand or company over time rather than switching to competitors.

This commitment can stem from various factors, including positive experiences, emotional connections, convenience, rewards, and trust in the brand.

7 Different Types of Customer Loyalty

Here are the seven customer loyalty types you normally see:

Transactional Loyalty

Transactional loyalty is a customer loyalty type driven primarily by financial incentives, such as discounts, rewards, or cashback offers. Customers remain loyal as long as they perceive a financial or value-based advantage, but this loyalty is often shallow and dependent on ongoing benefits.

What Drives Transactional Loyalty:

• Pricing: Customers may remain loyal to brands that offer competitive prices or frequent discounts.
• Discounts: Special promotions, coupons, and exclusive deals encourage repeat purchases.
• Rewards Programs: Points-based systems, cash-back offers, and tiered loyalty programs incentivize customers to continue buying in exchange for rewards.

Strengths and Weaknesses of Transactional Loyalty:

Example: Many retailers and eCommerce businesses leverage transactional loyalty, such as Amazon Prime, which offers exclusive discounts and free shipping incentives to retain customers. Similarly, Starbucks Rewards provides points-based incentives, encouraging repeat purchases through its app.

Emotional Loyalty

Emotional loyalty goes beyond rational decision-making. It’s when a customer feels a deep, personal connection to a brand. They don’t just buy the product or service; they identify with the brand’s values, resonate with its story, and feel a sense of belonging. This leads to unwavering support, even when faced with alternatives.

What Drives Emotional Loyalty:

• Brand Values: Customers are increasingly drawn to brands that align with their own values. This could be a commitment to sustainability, social justice, or community involvement.
• Storytelling: Strong narratives about a brand’s mission, origin, or impact create a meaningful connection.
• Emotional Marketing: Imagery, language, and experiences create emotional responses, such as joy, nostalgia, or inspiration.

Best Strategies for Fostering Emotional Connections:

• Personalization: Brands that remember preferences, anticipate needs, and provide exceptional service build emotional bonds.
• Community Engagement: Creating spaces (online or offline) where customers can connect with the brand and with like-minded individuals.
• Exceptional Customer Service: Providing support that goes beyond expectations, showing customers that the brand genuinely cares.
• Cause Marketing: Supporting charitable causes, sustainability efforts, or social movements that align with customers’ values.

Examples: Through powerful storytelling and inclusive branding, Nike inspires emotional connections with athletes and everyday consumers.

Behavioral Loyalty

Behavioral loyalty refers to the consistent purchasing behavior of customers toward a brand. It’s about actions, not necessarily deep emotional connections.

Key behaviors that indicate behavioral loyalty include:

• Customers consistently choose the same brand or product.
• They make purchases regularly, establishing a pattern.
• They maintain a stable or increasing level of spending with the brand.
• They purchase multiple products or services from the same brand.
• They actively renew subscriptions or memberships.

What Drives Behavioral Loyalty:

• Convenience: Customers are drawn to brands that make their lives easier. This could be through convenient store locations, easy online ordering, or fast delivery.
• Ease of Use: Products or services that are simple and intuitive to use encourage repeat purchases.
• Habit: Over time, customers may develop a habit of purchasing from a particular brand. This can be due to familiarity, routine, or simply a lack of motivation to switch.
• Consistent Quality: Customers will continue to purchase from a business that consistently provides a product or service that meets their expectations.
• Effective Loyalty Programs: Points and rewards programs that are easy to understand and provide real value to the customer.

How to Maintain Behavioral Loyalty:

• Streamlined Customer Experience: Ensuring that shopping, checkout, and delivery are seamless and efficient to prevent friction.
• Subscription & Auto-Renewal Models: Services like auto-renewing memberships or scheduled deliveries help maintain loyalty without requiring the customer to make frequent decisions.
• Regular Engagement: Keeping customers engaged through reminders, notifications, or exclusive content to reinforce habitual use.
• Continuous Improvement: Enhancing products or services over time to ensure customers see no reason to switch to a competitor.

Examples: Many consumers habitually visit McDonald’s due to its consistent menu, affordability, and widespread availability.

Advocacy Loyalty

Advocacy loyalty occurs when customers not only remain loyal to a brand but also actively promote it to others, often without any incentives. Advocacy loyalty is the highest form of customer commitment, as it stems from genuine enthusiasm and trust.

What Drives Advocacy Loyalty:

• Exceptional Product or Service Quality: Customers are more likely to recommend a brand when they consistently receive high-quality products or outstanding service.
• Emotional Connection: A strong emotional bond with a brand makes customers eager to share their positive experiences.
• Brand Identity and Shared Values: Customers who strongly identify with a brand’s mission, vision, or values are more likely to advocate for it.
• Customer Experience & Engagement: Personalized interactions, excellent customer support, and a sense of belonging encourage customers to talk about a brand.
• Referral & Incentive Programs: While advocacy should be organic, well-structured referral programs can amplify customer recommendations by offering incentives like discounts or freebies.

How to Turn Satisfied Customers Into Brand Advocates:

• Encourage User-Generated Content: Brands can invite customers to share reviews, testimonials, or social media posts featuring their products.
• Create an Exclusive Community: VIP programs, online forums, or ambassador programs help customers feel more connected to the brand.
• Leverage Social Proof: Featuring real customer reviews, testimonials, and case studies builds trust and encourages others to advocate for the brand.
• Deliver Outstanding Customer Support: Going above and beyond in resolving issues fosters loyalty and strengthens advocacy.
• Offer Referral & Loyalty Rewards: Providing customers with incentives for bringing in new customers can further enhance advocacy.

Examples: Apple is successfully building a loyal community where Apple users frequently advocate for the brand, often influencing others to switch due to product quality and ecosystem integration.

Social Loyalty

Customers with social loyalty feel a strong connection to a brand because of its community, social proof, or shared values. They engage with the brand through social media, online reviews, forums, and brand-led initiatives.

What Drives Social Loyalty:

• Peer Influence & Social Proof: Customers are more likely to stay loyal when they see their friends, influencers, or a broader community supporting a brand.
• Sense of Community: People are social creatures and crave a sense of belonging. Brands that create communities around their products or services foster social loyalty.
• Shared Values and Interests: Customers are drawn to brands that align with their personal values and interests.
• Social Validation: Being associated with a popular or respected brand can provide social validation.
• Exclusivity: Feeling like part of an exclusive group or having access to special perks can enhance social loyalty.

How to Build Social Loyalty:

• Create an Online Community: Brands can build forums, Facebook groups, or exclusive social spaces where customers can interact, share experiences, and feel like part of a movement.
• Engage on Social Media: Responding to comments, hosting interactive Q&A sessions, and featuring user-generated content make customers feel heard and valued.
• Leverage Influencer & Ambassador Marketing: Partnering with influencers who align with the brand’s values helps attract a loyal audience.
• Support Social & Environmental Causes: Taking a stand on relevant issues and backing it up with action strengthens customers’ trust and loyalty.
• Encourage User-Generated Content: Asking customers to share their experiences, reviews, or creative takes on products fosters community-driven loyalty.

Customer loyalty example: Through campaigns like #JustDoIt and brand-sponsored events, Nike fosters a strong community of engaged users.

Engagement Loyalty

Engagement loyalty is characterized by a customer’s active and ongoing interaction with a brand beyond just making purchases. It involves participation, interaction, and a sense of involvement with the brand’s activities and content.

What Drives Engagement Loyalty:

• Valuable Content: Customers engage with brands that provide them with useful, informative, or entertaining content.
• Interactive Experiences: Opportunities to participate in polls, quizzes, contests, or other interactive activities.
• Personalized Communication: Tailored messages and content that resonate with individual customer preferences.
• Sense of Influence: Feeling like their opinions and feedback matter to the brand.
• Exclusive Access: Providing early access to new products, features, or events.
• Gamification: Incorporating game-like elements, such as points, badges, or leaderboards, to incentivize engagement.

How to Build Engagement Loyalty:

• Create an Omnichannel Experience: Ensuring seamless engagement across digital platforms, emails, apps, and in-store experiences helps customers stay connected.
• Leverage Gamification Elements: Incorporating elements like leaderboards, challenges, and achievement rewards makes interactions fun and rewarding.
• Encourage Customer Participation: Running polls, contests, or asking for customer feedback makes them feel involved in the brand’s journey.
• Offer Exclusive Content & Experiences: Providing early access to new products, behind-the-scenes content, or premium features keeps customers engaged.
• Use AI & Personalization: Smart recommendations, customized messages, and dynamic content tailored to individual preferences enhance engagement.

Examples: Through extreme sports sponsorships, viral content, and interactive campaigns, Red Bull keeps its audience engaged beyond just energy drink purchases.

Inertia Loyalty

Inertia-based loyalty means customers stick with a brand, not because they love it but because it’s easier than switching. This is common with everyday products where people don’t feel a strong emotional connection.

What Drives Inertia Loyalty:

• Lack of Switching Motivation – Customers stay with a brand because they don’t see a compelling reason to switch.
• Ease and Convenience – If a brand is readily available or offers a seamless experience, customers may continue using it without reconsideration.
• High Switching Costs – When changing brands requires significant time, effort, or money, customers stick with their current choice.
• Bundled Services & Subscriptions – When multiple services are tied together (e.g., internet and cable), customers may stay because switching is inconvenient.
• Default Choices – Customers might remain with a brand simply because it was their first option and they never explored alternatives.

Risks of Inertia Loyalty:

While inertia loyalty can keep customers around for a while, it is fragile and poses several risks:

• Vulnerability to Competition: Inertia-loyal customers are easily swayed by competitors offering better prices, features, or convenience.
• Lack of Advocacy: They’re unlikely to become brand advocates or recommend the brand to others.
• Low Engagement & Brand Connection: These customers are not actively engaged with the brand, making it harder to build long-term relationships.
• Decreased Customer Lifetime Value: They may not be as profitable as emotionally loyal or engaged customers, as they’re less likely to make repeat purchases or try new products.
• Silent Churn: Customers may slowly disengage without actively communicating their dissatisfaction.

How to Convert Inertia Loyalty Into Emotional or Engagement Loyalty:

• Enhance Customer Experience: Making interactions smoother, more personalized, and rewarding encourages customers to stay for reasons beyond convenience.
• Increase Engagement Touchpoints: Encouraging customers to interact with the brand through apps, loyalty programs, social media, or exclusive content helps strengthen their connection.
• Surprise & Delight Strategy: Unexpected perks, rewards, or personalized messages can turn passive loyalty into active appreciation.
• Encourage Participation: Running polls, feedback surveys, and exclusive customer communities gives inertia-loyal customers a reason to engage with the brand.
• Build Emotional Connections: Communicate your brand’s values, tell compelling stories, and create a sense of community.

How to Build and Strengthen Customer Loyalty

Building and strengthening customer loyalty requires a multifaceted approach that focuses on creating positive experiences and fostering genuine connections. Here’s a comprehensive strategy:

1. Identify Customer Segments

Alright, now that you know 7 types of customer loyalty, let’s figure out how to categorize your customers.

First, you need a customer journey map (CJM). This shows the steps customers take when interacting with your brand. If you have a loyalty program, a CJM specifically for that is even better!

The typical customer journey has five stages:

1. Awareness: They discover your brand.
2. Consideration: They research your products.
3. Decision: They make a purchase.
4. Service: They interact with your customer support.
5. Advocacy: They recommend your brand.

A detailed CJM with touchpoints (where customers interact with your brand) and customer actions (what they do at each point) helps you understand their loyalty, especially from the “decision” stage onward.

Next, use your customer data to segment them based on their behavior and map them to your CJM stages. Here are some examples:

• New Customers:
  • Loyalty: Transactional (looking for immediate value).
  • CJM: Consideration/Decision.
• “At Risk” Customers:
  • Loyalty: Inertia, Transactional, or Social (could easily switch).
  • CJM: Service.
• High/Low Customer Lifetime Value (CLV) Customers:
  • Loyalty: Behavioral, Emotional (high CLV); Social/Transactional (low CLV).
  • CJM: Service.
• High/Low Repeat Purchase Rate Customers:
  • Loyalty: Behavioral, Emotional (high RPR); Transactional (low RPR).
  • CJM: Service/Advocacy.
• High/Low Average Order Value (AOV) Customers:
  • Loyalty: Behavioral, Advocacy (high AOV); Social/Transactional (low AOV).
  • CJM: Service/Advocacy.
• Customers in the Referral Program:
  • Loyalty: Advocacy (actively promoting your brand).
  • CJM: Advocacy.

You can find these metrics in tools like LoyaltyLion’s analytics dashboard or Shopify’s customer data.

Once you’ve mapped your customer data to your CJM, you’ll have a clear picture of their loyalty levels. This lets you target different customer groups with the right loyalty strategies.

2. Tailoring Strategies to Different Customer Segments

Now that you’ve sorted your customers by loyalty type and where they are in their customer journey, you’re ready to use specific strategies to build a stronger base of loyal customers and guide them further along that journey.

New Customers (First-Time Buyers)

Goal: Convert them into repeat buyers.

• Offer welcome discounts or rewards for the first purchase.
• Provide an easy onboarding experience with educational content about your products/services.
• Send personalized follow-ups via email or SMS with relevant product recommendations.
• Introduce a low-commitment loyalty program (e.g., simple point-based rewards for repeat purchases).

Occasional Customers (Infrequent Buyers)

Goal: Increase their purchase frequency.

• Use exclusive limited-time offers to encourage urgency.
• Send reminders via email or SMS about abandoned carts or expiring points.
• Create seasonal promotions targeting their past purchases.
• Offer incentives for engagement (e.g., leaving reviews, sharing on social media).

Loyal Customers (Frequent Buyers)

Goal: Maintain engagement and prevent churn.

• Upgrade them to VIP status with premium perks (e.g., early access to new products, exclusive events).
• Offer tiered rewards programs (e.g., more perks as they spend more).
• Surprise them with personalized gifts, exclusive experiences, or handwritten thank-you notes.
• Provide priority customer service or dedicated account managers.

High-Spending Customers (VIPs)

Goal: Strengthen emotional connection and advocacy.

• Provide bespoke experiences (e.g., personal shopping services, exclusive product previews).
• Invite them to private events or behind-the-scenes experiences.
• Offer them brand ambassador opportunities (e.g., early product trials, and co-creation of new products).
• Give special recognition through social media shoutouts or loyalty badges.

Lapsed Customers (Inactive or At-Risk)

Goal: Reactivate their interest in your brand.

• Send win-back email campaigns with personalized incentives.
• Offer one-time special discounts for their next purchase.
• Ask for feedback to understand why they stopped buying.
• Show them what they’ve missed (e.g., “Here’s what’s new since you last visited!”).

3. Implementing and Monitoring Your Loyalty Strategy

Once you’ve identified the right loyalty type and segmented your customers, follow these best practices:

• Use a CRM or Loyalty Platform: Track customer data, engagement, and reward points.
• Continuously Personalize: Leverage AI-driven recommendations for emails and promotions.
• Measure Key Metrics: Track customer retention rates, repeat purchase rates, and program engagement.
• Optimize Based on Feedback: Regularly refine your program based on customer responses and participation levels.

Common Challenges in Building Customer Loyalty

Building customer loyalty is crucial for long-term business success, but it comes with several challenges. Here are some of the most common ones:

1. Failing to Understand Customer Needs

Many businesses assume they know what their customers want without actively gathering feedback. This leads to loyalty programs that don’t resonate, irrelevant rewards, and a disconnect between the brand and the customer. Without personalized experiences, customers may feel undervalued and disengaged.

• How to Overcome It: Regularly collect customer feedback through surveys, reviews, and social media interactions. Use data analytics to track buying behaviors and preferences to tailor your loyalty program accordingly.

2. Overcomplicating Loyalty Programs

Some businesses create loyalty programs with confusing point systems, hard-to-redeem rewards, or too many restrictions. When customers struggle to understand the value of their participation, they lose interest and disengage.

• How to Overcome It: Keep your loyalty program simple and transparent. Ensure customers can easily earn and redeem rewards without unnecessary steps. Use clear communication and straightforward redemption processes.

3. Lack of Emotional Connection

Focusing solely on discounts and rewards without fostering an emotional bond with customers makes loyalty transactional. When another brand offers a better deal, customers may leave because they don’t feel personally connected.

• How to Overcome It: Create emotional engagement through personalized interactions, storytelling, and shared values. Build a community around your brand using social media, personalized messaging, and exceptional customer service.

4. Ignoring Customer Experience Issues

Even the best loyalty program won’t work if customers face poor service, frustrating website experiences, or slow support. Negative interactions create dissatisfaction, making customers look elsewhere.

• How to Overcome It: Prioritize exceptional customer service at every touchpoint. Train staff, optimize digital platforms, and ensure seamless experiences from purchase to post-sale support.

5. Overlooking Personalization

Generic loyalty programs that treat all customers the same fail to build lasting connections. Customers want experiences and rewards that match their preferences, not a one-size-fits-all approach.

• How to Overcome It: Leverage customer data to personalize rewards, offers, and communication. Send birthday discounts, recommend products based on past purchases, and segment customers based on behavior.

6. Not Rewarding Long-Term Customers Enough

Many loyalty programs focus more on acquiring new customers rather than retaining existing ones. When loyal customers don’t feel appreciated, they may switch to a competitor that values their commitment.

• How to Overcome It: Introduce VIP tiers, exclusive perks, and special appreciation rewards for long-term customers. Recognize milestones and reward continuous engagement with increasing benefits.

What to Do When Customer Loyalty Declines

If a business notices a drop in customer retention and loyalty, quick action is needed.

• Identify the Root Cause: Analyze customer feedback, website analytics, and sales data to pinpoint why loyalty is declining (e.g., competitor influence, poor service, outdated loyalty programs).
• Re-Engage: Reach out to lapsed customers with tailored incentives, such as exclusive discounts or invitations to loyalty programs.
• Improve Customer Experience: If customers leave due to service issues, address concerns, improve support, and streamline processes.
• Innovate Loyalty Programs: If a loyalty program isn’t effective, revamp it by making rewards more attractive, accessible, and engaging.
• Increase Communication: Sometimes, when customers are pulling away, increasing communication will show that you care and bring them back.

Bottom Line

Now you have a clearer picture of different types of customer loyalty, how to build them, potential risks, and how to improve loyalty overall.

One of the best ways to spot and grow loyal customers is by creating a loyalty program. With Joy Loyalty, you can build a personalized loyalty program that fits your brand and helps you develop a long-term strategy for keeping customers happy.