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Who is more important for a business: Frequent customers or loyal customers?

Bhupendra Sharma
11th Oct 2016
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It's always special for an entrepreneur to acquire their first customer. However, as time passes and competition rises, they have to increase the number of acquisitions as well as retain existing customers. That's where the real problem starts.

Businesses announce price cuts, bonuses and discounts in an attempt to make customers transact frequently and hoping they would stick to them and remain loyal. The question that remains unanswered is, how right they are?

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Often, customer loyalty is measured in terms of repetitive purchase behavior of customers. If a set of customers buys your product or services repeatedly over a period, they're considered loyal. However, this view encompasses two different types of customers:

  1. Those who absolutely love your brand and are loyal to it, and
  2. Those who are stuck with it and have no other choice but to use it, a.k.a frequent customers

Frequent customers and loyal customers 

Loyal customers are those who don't mind paying a few extra bucks to buy products belonging to a particular brand even when they can find a similar product from a different brand at a much lower price. Besides, they're proud of the brand they're using and don't mind telling others about it. Take Google for example. There are a few other search engines in the market as well, but Google recently became one of the most valuable companies in the world, while the others are struggling to survive.

One of the things that give Google an edge over its rivals is its loyal customer base.

Frequent customers, on the other hand, are those who prefer to buy your products because they don't have any other choice and because you give them higher discounts. These customers won't mind leaving you for some other brand if it offers them better products and greater discounts.

In a nutshell, frequent customers will repetitively buy your products as long as there's no better option available in the market. The moment they find any other brand that can offer them similar services at lower prices, they'll leave you without thinking twice. However, the customers who are loyal to your brand will stick to it no matter what.

How to differentiate between frequent customers and loyal customers 

Differentiating loyal customers from frequent ones isn't a rocket science. All you have to do is analyse their behavior over time. Loyal customers choose to stay with you, no matter how much discounts your rivals are offering to them. Frequent customers do just the opposite. Secondly, loyal customers form an emotional bond with your brand over time and may even start looking at it as a friend, whereas others will focus only on the discounts and promotional bonuses or cash rewards offered by you. Lastly, loyal customers will praise the brand in the public and will defend it whenever it faces any criticism. Opportunists or frequent customers may not do any such thing.

Studies claim that loyal customers show adamant beliefs, emotions, behaviours and attitudes towards a brand as compared to the others. So, as a business owner, it's your job to differentiate your loyal customers from the remaining lot and reward them for their loyalty. Remember, it's easy to get frequent customers, but not so easy to turn them into loyal customers.

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