Leverage the Ladder of Customer Loyalty to Grow Your Business
Last week I shared with you ideas for keeping your customers happy and driving repeat business. Today, I want to look at customer relationships from a different perspective to help you grow your business.
The Ladder of Customer Loyalty classifies your customers in terms of their relationship to your business and helps you allocate resources for maximum return. Moving customers up the ladder will look different for every business. Not every business supports repeat business. If you specialize in redoing kitchens, for example, your customers won’t come back for a new kitchen every year. But your happy customers can refer your business to friends and family, and those relationships are worth investing in.
Here are the six types of relationships that span the Ladder of Loyalty.
Suspect: This is anyone who can buy from you — your entire target market.
Prospect: This is someone who has interacted with you in some channel, either on a website, by email, or phone. Leverage their curiosity to learn more about you by giving them an experience that helps them remember who you are and return for greater interaction with your business.
Shopper: This is someone who is exploring, having a conversation, and maybe even making a single, low-cost transaction. They might be take advantage of a free consultation offer or sample something. Provide shoppers with opportunities for low-risk engagement to further their interest in your business.
Customer: Once they come back for a repeat transaction, they become customers. However, the definition of customer can looks different for every type of business. In the restaurant business, for example, they’ve done analysis that indicates a visitor has to return four times before you can consider them a loyal customer. Communications with customers are really important; you want to establish a personal connection to reinforce a sense of a relationship.
Member: The next step up the ladder is becoming a member. Reward these customers with something special that makes them feel like they are VIPs. You might give them a membership kit or other special benefits.
Advocate: These customers start driving new customers to your business. They give testimonials, share their experiences with friends and families. Your investment in these customers should enable them to be the best advocates for your business. To use the restaurant business as an example again, some restaurants train waiters to take good pictures, because they know it is likely these photos will end up on social media and it will reflect well on the restaurant to have the best picture.
Raving Fan: This is someone who becomes a salesperson for your business. They love your business and are always promoting it, giving unsolicited testimonials and are openly expressing how they feel about your business. This is the rung where you want your customers to land, so design your messaging to them to recognize and reward them. Stay in touch, invest in high-level communications to let them know how much you appreciate their loyalty.
Homework: Develop or update your customer loyalty plan to include customers who may not provide repeat business but give frequent referrals or testimonials.
If you would like to learn more about how this might apply to your business, let’s talk: