Editor’s Note: This post was originally published on February 22, 2013 and was updated for accuracy and comprehensiveness on August 25, 2017.

When a professional sports team drafts an athlete, many things are taken into consideration. Stats like the number of goals the player has scored or the number of points they have amassed are all closely scrutinized to determine if the player should be chosen or not.

secondary benefits of customer loyalty intangibles definition

But there are some things that cannot be easily measured that also have significant impact on whether a player should be drafted. These characteristics are called “intangibles”, and unlike statistics they are not as easy to see, quantify, or explain. Sportsmanship and leadership skills are both examples of intangible assets that can make the difference between an OK player or a great one.

The same can be said for customer loyalty.  When marketers and business officials discuss loyalty, it’s often described using measurable metrics like conversion rate, sales increase, and enrolment increase. If these numbers are high, it’s safe to say that your store has built a loyal following of customers.  However, these numbers don’t tell the whole story of customer loyalty.

secondary benefits of customer loyalty considerations

Although the conversion rate can tell how many visitors you convert into sales, it can’t be used to explain how captivated your customers are with your brand, how much they trust you, or how willing they are to pay a premium price for your products.

In order to truly understand the success of customer loyalty, you need to look beyond program metrics.

Beyond the Statistics

The secondary benefits of customer loyalty can push your loyalty program from being utilized (a good program) to being glorified (a great program).

Here are 5 secondary benefits of customer loyalty – benefits that go beyond the obvious statistics.

1. Brand Advocacy

Brand advocacy occurs when a customer becomes a brand advocate. Brand advocates are your raving fans - evangelists who are so hopelessly in love with your brand that they will go out of their way to promote it for you, without having to be compensated.

secondary benefits of customer loyalty brand advocates

Social media has made brand advocacy far more powerful. If your followers and friends on Twitter or Facebook view your thoughts and ideas as credible, this will likely translate to any brands you promote as well. This phenomenon gives you as a merchant the chance to build a larger following without having to spend any money or make an additional effort.

secondary benefits of customer loyalty social media

It is also important to note that search engine rankings are starting to consider social network influence when determining the credibility of a website. This means that brands who have a strong social following (and lots of brand advocates) are likely to have better rankings on search engines.

2. Price Insensitivity

When a customer is price insensitive, it means that they are not influenced by the price of a product (or service). In other words, even if a product’s price is increased, the customer will still make the purchase because they trust the brand they are buying from.

secondary benefits of customer loyalty apple

Prominent brands like Apple have traditionally priced their products higher because they know many of their customers are price insensitive. Even if the Macbook Pro is more expensive than a competing laptop with similar specifications, Apple customers will choose to pay more because they feel they are getting a better quality product from a brand they have had positive experiences with in the past.

Customer rewards programs help cement this mentality into your customers by providing them with a brand experience that they can’t get elsewhere. If you give your customers the best experience possible through rewarding and showing your appreciation, you’ll make them fall in love with your brand.  As a result, they won’t even think twice about price.

3. Direct Referrals

Direct referrals are new customers who have been advised to use your product/service by someone who is already a customer. These can be very meaningful to your business as they provide a direct link to a sale. No additional funding is required to create promotions for this individual, and they will purchase without having to be engaged.

secondary benefits of customer loyalty referrals

Simply put, it is an easy sale that requires little effort on your end to complete. Chances are, if they are anything like the individual who recommended your product to them, they will also become a loyal customer!

4. Customers Listen to You

Believe it or not, email marketing is still as important as ever. Whether you want to keep your brand in the back of your customers’ minds, convince them to come shop again, or remind them about a new sale you have coming up, email is a very effective way to market yourself.

One of the great things about a rewards program is that it encourages people to sign up for accounts on your website.  As a result, you then have a list of contacts you can reach with an email marketing campaign.


With this contact list of fans, you can run a wide variety of programs to increase customer engagement, repeat purchases, and brand advocacy. Integrating email automation services like Mailchimp or Klaviyo into your rewards program will let you really harness the new power acquired through this list.

With your rewards program gathering contact information, and apps like Klaviyo sending out the emails, you’ll be well on your way to sending valuable communications to customers who look forward to hearing from you.

5. More Predictable Everything

Having a loyal base of customers makes forecasting in many areas a lot more manageable. The fact that you have regular customers who have made more than one purchase allows you to predict incoming revenue a lot more easily.

secondary benefits of customer loyalty predictability

Tracking the performance of acquisition campaigns is also much easier because you’ll know that increases in business are likely coming from new sources. Inventory planning becomes less daunting as you can account for regular purchases. You can also hold less inventory on hand because sales are more predictable.  In these ways, customer loyalty gives you the opportunity to improve efficiency and save money.

Your Rewards Program is More Than Meets the Eye

A customer rewards program can provide a company with many obvious benefits, such as increases in purchase frequency, average order value, and customer lifetime value. However, what many merchants don’t realize is that behind all of those numbers, rewards programs provide a lot of value that is somewhat intangible. Hopefully you now have a better idea what some of those additional benefits are, and will be able to put them to use in your business.  At the end of the day, a rewards program is built to make both you and your customers happy, and your customers smile.