Creating customer loyalty

We all know that creating customer loyalty isn’t something that can be done overnight. It’s a gradual process of turning initial prospects into shoppers, customers, and ultimately raving fans. But what exactly is the ladder of loyalty and how can you build it?

The Ladder of Loyalty

To explain the concept of the ladder of loyalty it might be helpful to imagine people climbing a steep ladder. These people range from those who you could do business with – they’re on the bottom rung (step) – right up to those you who you regularly do repeat business with and who actively recommend you to their friends and family. Their position on the ladder reflects their level of engagement with you and the value they create.?

The seven rungs of the ladder

The ladder of loyalty consists of seven rungs – in other words your customer database is broken down into seven levels according to their loyalty to your business:

• Suspect – The bottom rung of the ladder are termed as suspects. They’re businesses which fit into your target market but haven’t engaged with you yet.
• Prospect – Once a potential customer becomes interested in your business and becomes a lead, they climb one rung of the ladder and become a prospect.
• Shopper – Shoppers occupy the third rung of the ladder. They’ve bought from you, but haven’t committed to further purchases.
• Customer – A shopper becomes a customer when they’re a consistent buyer – a repeat customer.
• Members – Members belong to the next rung of the ladder. They’re repeat buyers who have developed a business relationship with you, and in return you offer discounts, loyalty packages and incentives to keep their business.
• Advocate – An advocate promotes your business through word of mouth referrals or testimonials. They’re delighted with the service or products they’ve received and mention you in day-to-day conversations.
• Raving Fan – The very top rung of the ladder and the ultimate achievement in terms of growing your business. Raving fans actively promote you at all times. They can’t stop singing your praises. They name drop your business whenever the opportunity arises.

Climbing the ladder

Having established the seven rungs of the ladder, you now need to determine the number of contacts you currently have at each rung, and implement strategies for them to climb the ladder.

Think about how many shoppers you have compared to the number of customers. How many regularly purchase from you?

From the customer level, what types of incentives could you offer to make people really feel wanted and therefore become members, or even advocates? Think about loyalty cards, membership packs, rebooking schemes etc. – the extra things which would make them happy to recommend you to their neighbours, their friends, their family.

How could you turn these advocates into raving fans, the customers who now have essentially become an extension of your sales force? They bring in new customers who may even climb straight up to level four of the ladder without you having to do a thing!

Your challenge

The challenge I’d like to leave you with is to study the area of your business, and the rungs of the ladder, you need to focus on the most. Think about the numbers on each rung and then devise strategies for promoting them to the next level.

If you’d like some help with this, or would like some extra advice on how to set about the process of enabling suspects through to raving fans climb your ladder of loyalty, feel free to get in touch by connecting with me.