The myth: Highly loyal customers are high-value customers.
By Tim Tyler, 20th October 2026
The confusion here comes from conflating two different things: share-of-category requirements (how much of their category spend comes to you) and absolute spend (how much they spend overall).
A customer who spends $200 a year in your category and directs 90% of it to you has a very high engagement score and would be considered very loyal. A customer who spends $2,000 a year in your category and allocates 40% to you and 60% to competitors contributes four times as much revenue, despite a lower loyalty-engagement score ($180 vs $800).
The NBD-Dirichlet model — which describes buying behaviour across most packaged goods and retail categories shows that heavy category buyers are almost always polygamous. They buy more from everyone. Your highest-revenue customers are likely to be buying from your competitors as well. They are valuable. They are probably not your most loyal.
Running strategy on engagement scores without controlling for category spend leads to over-investing in low-volume customers who happen to have no other options (they live near your store, say) and under-investing in high-volume customers who could be shifting more spend your way. The seminal publication on this topic is ‘The Mismanagement of Customer Loyalty’ by Reinartz and Kumar.
Share of Category Requirements (SCR) is the metric to consider alongside an engagement score for this reason — it shows not just what a customer does with you, but where you sit in their overall category behaviour.
Loyalty engagement scores measure exclusivity. Revenue measures revenue. Treat them as separate but related questions.
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