No one plans to fall sick isn't it? Similarly, when I caught some flu couple of years ago, we were eager to see a doctor. Being new to our suburb, googled around to find a nearby medical center. Took an appointment with "any available GP," visited and got better.
After some time, it was my wife's turn. When she wasn't keeping well, she too called the medical center, took an appointment with "any available GP" and felt better.
Apparently she visited a different GP than mine. She recommended me to see him next. Over the course of time, we noted his name and started getting appointment specifically with him when needed. Suddenly one day we heard that he moved out of this medical center, and the receptionist wasn't eager to share his new coordinates.
We felt a bit sad as he knew us well, and we had a built a good rapport over the years and now we don’t know his whereabouts.
Later due to circumstances, we moved to a different suburb and once again started the search for "any available GP". We weren't so happy with the GPs we had seen compared to our earlier one. We used to remember our earlier GP once in a while.
One day we casually thought of searching our earlier GPs name on google, and some names came up. We called a few and one of them actually turned out to be our earlier GP. Everyone was elated, and we went and met him as well. He was not only surprised to see us but was beaming with a big smile.
I would call our selves as the loyal customers for this GP as we did everything we could do get the services only from him even when several options were available.
Loyalty is something when you chose a specific service inspite of having many options in available to you. Of course, a more formal definition from Wikipedia would be “Loyalty is faithfulness or a devotion to a person, country, group, or cause.”
On the other hand, repeat business is something where customers use existing service as they don't have an alternate option.
It is shameful to see that many companies measure "repeat business" rather than "loyalty." Loyalty is much more powerful than getting a repeat customer. Loyalty is something that will enable the company to grow during downturns and fierce competition. Repeat customer will leave you and go when they find better options.
Nowadays companies rollout the so-called "loyalty program." Big shopping malls and airlines have this loyalty program. I feel that this is a bit misnomer. People tend to go back to these companies not because they like the service, but because they get some discounts or redeemable reward points. I don't call such programs as a "loyalty programs", but as "carrot programs."
Couple of things I liked about our family GP has been his relationship building skills, his frankness, his specialty, customer service and respect for us.
Here is another personal example, while I moved to a new suburb, I was scouting for an electricity provider. I was calling each provider and gathering various details. As one could see, each one was tried their level best to sell a service by sharing their discount program, except one of them who explained their weaknesses as well. She not only suggested alternate but better options. I genuinely got connected with this company. Lesson learnt, being truthful and genuine breeds loyalty.
To conclude, It is very important for a business to evaluate if the returning customer is a loyal one or a repeat.
Even though we have tools like NPS, it won't clearly tell you the difference between loyalty and repeat. It partially helps to understand the situation though.
Always try to build a loyal customer base and work towards converting the repeat customers to loyal ones.
I have also posted this article on LinkedIn