Loyalty's Impact on Brand Profitability Has Increased, Brand Keys Finds
Brand Keys, in compiling its 28th Annual Customer Loyalty Engagement Index, found that loyalty is more complex today, just as the consumer, the marketplace and marketing have become more complex. But brands best at building loyalty win more customers, more sales, and much bigger market shares, it said.
"The impact of loyalty on brand profitability has increased so significantly since we released those very first calculations in 1997," said Robert Passikoff, founder and president of Brand Keys.
The Customer Loyalty Engagement Index identifies the brands that will dominate their categories in 2025 and revealed dramatic differences in how loyalty operates as the most accurate predictor of consumer purchasing behavior, sales, brand market share, and profits.
Brand Keys surveyed more than 81,000 consumers, aged 16 to 65, examining their attitudes toward and their relationships with 1,100 brands in 104 categories.
The 2025 Brand Loyalty Award winners in the Retail sector include the following:
Apparel
- Gold: Levi Strauss
- Silver: Zara
- Bronze: Old Navy
Athletic Shoes Department Stores
- Gold: Nike
- Silver: Adidas
- Bronze: New Balance
Department Stores:
- Gold: Macy’s
- Silver: TJ Maxx
- Bronze: Kohl’s
Dollar Stores Discount Firearms
- Gold: Dollar Tree
- Sliver: Dollar General
- Bronze: Family Dollar
Discount Stores:
- Gold: Walmart
- Silver: Target
- Bronze: Best Buy
Firearms:
- Gold: Smith & Wesson
- Silver: Glock
- Bronze: Ruger
Home Improvement Stores
- Gold: Home Depot
- Silver: Lowe's
- Bronze: Ace
Natural Markets:
- Gold: Trader Joe’s
- Silver: Whole Foods
- Bronze: The Fresh Market
Online Payments:
- Gold: PayPal
- Silver: Apple Pay
- Bronze: Google Pay/ Venmo
Online Shoes
- Gold: Zappos
- Silver: Amazon
- Bronze: Footlocker/Nike
Online Retailers:
- Gold: Amazon
- Silver: Walmart
- Bronze: Etsy
Pharmacy:
- Gold: Walgreen’s
- Silver: CVS
- Bronze: Rite Aid
Price Clubs
- Gold: Costco
- Silver: Sam's Club
- Bronze: BJ's
Shipping:
- Gold: UPS
- Silver: FedEx
- Bronze: U.S. Postal Service
Sporting Goods:
- Gold: Dick’s
- Silver: Academy
- Bronze: Big 5
The 2025 research revealed the following economic facts about loyalty:
- • It now costs 15 to 22 times more to recruit a new customer than to keep an existing one (up 20 percent from 1997).
- An increase in loyalty of 5 percent can increase lifetime profits per customer by as much as 86 percent (down 9 percent from initial 1997 measures, but still exceptionally high, especially when digital, ecommerce is factored in.
- Depending on the sector, an increase in loyalty of 2 percent can be the equivalent of a 28 percent across-the-board cost reduction program (adjusted for 2025 dollars, that's an increase of 11 percent).
"Economic dynamics like this drive loyalty and correlate extraordinarily highly with brand market share (0.87)," Passikoff said. The CLEI has consistently found loyal customers to be six times more likely to engage with a brand, think of the brand first, buy it (and buy it again), and pay more attention to its marketing and social networking activities, which results in increased market shares and bottom lines.
"The proof, of course, is the marketplace itself," he continued. "Discover has been #1 in the credit card category for 27 consecutive years, Google for 25 years for search, Domino's for 21 years, Dunkin' for 19 years for out-of-home coffee, Konica Minolta for 18 years for multifunction printers/copiers, Hyundai and AT&T Wireless for 16 years each, Amazon for 14 years, and Home Depot for 13 years.
"The loyalty paradigm has changed dramatically over the past decade," Passikoff observed. "Happily, consumer loyalty can be measured, achieved, and leveraged. But it isn't something that just shows up one day. It isn't awareness or satisfaction, no matter how much you think you have. And it absolutely isn't something one can find on a 10-point scale."