User-to retain or to be loyal? Spot the difference to lead!

Written by Vanshitha M

Published on Apr 01, 2024


Are you a digital marketer, who rightly knows the difference between loyalty and retention? What will it get you, rightly tapping into the nuances can help you leverage both terms and help with upscaling your brand!

Source: outboundengine

Difference between Loyalty and Retention:

Retained users are the ones who buy from your brand again but loyal users are the ones who preach your product to others.


→ Retained users may be just waiting for a chance to use the product of the competition but loyal users are the ones who stick with your brand no matter what.


→ While retention is about “if the user will buy your product” ” loyalty is about “the level of engagement the user has with your brand.”


→ When can you ask for a referral?

  • When the value has been provided and the user recognizes that value
  • Understand the client completely and personalize the ‘ask’.

→ What referrals can you ask your users?

  • Traditional: Ask for referrals and give rewards to the ones who do refer.
  • Testimonials: The real opinion can matter a lot and can be included in a website or content.
  • Reviews: Online reviews can add a lot of value to your brand.

Why Loyalty?

→ Loyalty creates resistance for the users to move to the competition.


→ Loyalty is like the “money that generates money”, with more referrals and high revenue, loyal users create a whole economy for your brand.


→ Loyalty helps create a block in the user’s mind so they share your product’s enthusiasm as much as you.


→ They are more engaged with your brand and provide you with feedback.

Source: queueit

Measuring Retention and Loyalty

“Retention Rate= (Total customers at the end of the period-New customers acquired)/Customers at the start of the period*100”

Loyalty Rate is rather a mixture of many metrics and doesn’t depend on only one formula.

How to improve loyalty?

  • Customer reviews: Knowing what your customer wants is the best way to get ahead of the curve. Reviews are the best way to understand any dissonance customers have.

Source: outboundengine

And use the information you get to categorize users into different domains to serve them better. This can be called the “NPS-Net Promoter Score”, which is used to understand what customer feels about the brand exactly.

Source: outboundengine

But this often might not be the best way since the NPS wouldn’t give us the ‘reason’ or the ‘why’ to the customer’s bad review.

These scores talk about 3 prime behaviors:
i) Expansion: The amount of sales we get from the loyal users or the increase in buying of products from loyal users.


ii) Influence: The amount of influence, loyal users get from your brand or the degree to which your brand can positively impact the loyal users.

iii) Advocacy: The amount of people loyal users refer to or the extent to which loyal users can promote your brand.

  • Loyalty program: These programs have been designed to reward the customers who were with your brand through everything. These rewards can be everything from discounts to coupon offers. If you wish to explore the world of coupons more, check out our blog.

Source: raven360

Calculate these metrics to understand where you stand.

a) Net Promoter Score:

It is the level of customer satisfaction and probability of referrals.

Net Promoter Score = % of Promoters – % of Detractors”


b) Repeat Purchase Rate:

The customers who return to your brand to purchase your product or service again.

“Number of Returning Customers / Number of Total Customers.”


c) Upsell Ratio:

It is the number of customers who make repeated purchases but with more than one type of product from your brand in a given time frame.

Upsell Ratio” Customers who bought more than one type of product/customers who bought one type of product”


d) Customer Lifetime Value (CLV):

The revenue generated by each customer.

“Customer Value * Average Customer Lifespan.”


e) Churn Rate:

“(Lost Customers ÷ Total Customers at the Start of the period) x 100%”



Every metric is used to understand the amount of deviation and help you take steps to address the situation.

  • Just ask! It’s often a case that, brands are anxious to ask for referrals but proper tact and direction can help users help in spreading referrals.

  • Ensure that the users maximize the product or service Ensure that they know every tiny function of your product or service.

  • A study showed that onboarding is the third biggest reason for churn and 86% of more people stay loyal to better onboarding procedures. If you wish to know more about welcoming people perfectly, check out our blog here.
If you wish to know more about retention and a path to achieving it in the simplest language, check out our blog here.

Which is the best policy?

Well, I would say that combining both loyalty and retention as a whole to create a program that is meant to leave your users in awe is the best! Retention may or may not lead to loyalty but loyalty will lead the users to retention. In the end, all the jargon is to emphasize the importance of long-lasting relationships with better engagement with the users. But one certain thing is the benefits of loyalty/retention:
  • Let’s debunk a myth: Many believe that acquiring new customers is easier and fruitful but the truth is that the existing customers already know your brand and you’ve already secured a spot in their minds. They are already familiar with your environment so would be encouraged to buy again.

  • According to a study, increasing retention by 5% can increase profits by 25-95%.

  • The likelihood of converting unknown users hovers at a modest 5-20% while the probability of known users buying is 60-70%.

  • With less effort in acquiring, you can focus on the growth and enhancement of your product.

  • Customer satisfaction can give you word-of-mouth marketing! Remember that satisfied customers are your best retention strategy.
Achieving loyalty can be similar to attaining retention, the steps can be similar but loyalty is tough to gain. Loyalty can help us be at the top of the game but to get there takes time. Communicate with your users and create a stable ecosystem with them.

Source: raven360


Well, Loyalty is the best policy, if you are a digital marketer hoping to find the best marketing strategies, get in tune with the nuances of loyalty so you gain the leverage of the best metric rates.

Retention10 is the customer retention management here to navigate you through the world of retention and loyalty.

If you are looking for customized solutions and the path to loyalty, we can help you!

Book a call with us right away so you don’t miss out on

Thanks for reading.

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Vanshitha Munipally
( Research & Content Marketer )

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