Customer Loyalty Matrix

The Customer Loyalty Matrix is a 2x2 matrix that helps businesses identify and categorize their customers based on their loyalty and potential for growth. It is used to prioritize customer segments and focus resources on the most valuable customers.

At a very high level, the Customer Loyalty Matrix is used in the context of business, marketing, finance.

Customer Loyalty Matrix quadrant descriptions, including examples
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What is the Customer Loyalty Matrix?

A visual explanation is shown in the image above. The Customer Loyalty Matrix can be described as a matrix with the following quadrants:

  1. Loyal and Valuable: Customers who are loyal and have the potential to generate more revenue (e.g. a customer who has been with the company for a long time and spends a lot of money)
  2. Loyal but Unprofitable: Customers who are loyal but do not generate a lot of revenue (e.g. a customer who has been with the company for a long time but only spends a little money)
  3. Unloyal but Valuable: Customers who are not loyal but have the potential to generate more revenue (e.g. a customer who has been with the company for a short time but spends a lot of money)
  4. Unloyal and Unprofitable: Customers who are not loyal and do not generate a lot of revenue (e.g. a customer who has been with the company for a short time and spends a little money)

What is the purpose of the Customer Loyalty Matrix?

The Customer Loyalty Matrix is a 2x2 matrix used by businesses to identify and categorize their customers based on their loyalty and potential for growth. It is used to prioritize customer segments and focus resources on the most valuable customers.

The matrix is divided into four quadrants. The top-left quadrant is labeled 'Loyal and Valuable', and is used to identify customers who are loyal and have the potential to generate more revenue. The top-right quadrant is labeled 'Loyal but Unprofitable', and is used to identify customers who are loyal but do not generate a lot of revenue. The bottom-left quadrant is labeled 'Unloyal but Valuable', and is used to identify customers who are not loyal but have the potential to generate more revenue. The bottom-right quadrant is labeled 'Unloyal and Unprofitable', and is used to identify customers who are not loyal and do not generate a lot of revenue.

By categorizing customers into these four quadrants, businesses can prioritize customer segments and focus resources on the most valuable customers. For example, a business might focus on retaining loyal customers and increasing the value of customers in the 'Loyal and Valuable' quadrant, while offering discounts or incentives to customers in the 'Unloyal but Valuable' quadrant.


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What templates are related to Customer Loyalty Matrix?

The following templates can also be categorized as business, marketing, finance and are therefore related to Customer Loyalty Matrix: Effort Impact Matrix, Gap Analysis Matrix, Growth Share Matrix, Kraljic Matrix, Outsourcing Matrix, Quadrant Analysis, Risk Analysis Matrix, Risk Value Matrix. You can browse them using the menu above.

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