Customer Loyalty - Behavior or Attitude

We use many metrics to measure customer loyalty — whether to predict expected growth or to monitor performance compared with competitors. While these metrics are important and there are statistically proven correlations between them and growth, we must distinguish between what is called attitudinal loyalty and behavioral loyalty.

Attitudinal Loyalty

Loyalty-related attitudes are measured through certain metrics, the most well-known being the Net Promoter Score (NPS). When a customer answers a survey that includes one of the loyalty metrics, they are expressing their attitude — not necessarily their expected behavior. That’s why several other questions have been added alongside the recommendation question to measure loyalty more accurately: the likelihood of continuing the relationship, the likelihood of repurchasing or re-subscribing, the likelihood of buying other products or services, willingness to pay more for the same service, and willingness to speak positively about the product or service. But these metrics still reflect the customer’s mental state more than their future behavior.

You may find a customer whose results show very high loyalty, but whose sales figures don’t reflect that at all. This is why many surveys targeted at the general consumer are inaccurate in measuring loyalty toward particular products, and don’t reflect those products’ market share.

Behavioral Loyalty

Behavioral loyalty is linked to behavior, not just mental state, and can be inferred where advanced CRM systems exist. But there’s a flaw in measuring behavioral loyalty too: you’re classifying a customer as highly loyal based on the volume of their purchases, which doesn’t necessarily mean the customer is satisfied with the product or holds attitudinal loyalty toward it.

For example, over the past ten years I’ve moved between the services of several telecom operators and was not satisfied with any of them. Yet if my interactions with them were analyzed on a behavioral-loyalty basis, it would appear that my loyalty toward one of the operators is high — despite my dissatisfaction with the services they provide. Another example: companies that monopolize certain services and products enjoy the strongest behavioral loyalty from their customers, simply because they monopolize the market and the customer has no other option but to deal with the monopolist.

Why It Matters

The point of touching on both types is to flag the importance of combining them rather than measuring one without the other, then running statistical analyses to measure the correlation between them. Decisions can then be made based on the results, and you can arrive at a more accurate and realistic loyalty indicator. Combining them puts an end to the long-standing debate between two schools: one claiming consumer behavior is random and unplanned, the other claiming it is rational and pre-planned.