It’s said that first impressions count — it can take a mere 7 seconds to form an opinion on someone, to shape an impression of who they are. This is important for all of us within an everyday social context, but as entrepreneurs and business owners, you can also see that this is crucial to building your customer base.

To build a loyal customer base, you should start at the beginning — from that first contact. Then consider the journey that a customer or client will have with you and your business, as they move from their first impression to loyal customer.

The Ladder of Loyalty is based on the idea that it is six times more expensive to acquire a new customer than to increase sales for your existing customer base. The seven steps of the framework offer business owners a strategy to cultivate and nurture client relationships.

What are the 7 steps?

Let’s work from the bottom up…

 

Suspect — These are the people and businesses that fit our target market, but at this moment have not engaged with us. We have recognised that they fit our offering due to location or age or industry, etc.

Prospect — This next level are the people that have reached out in some way — they may have asked for price details for your products or services, or filled in a form and downloaded content from your website. Or you may have met at a networking event and talked a little about your product or service. They fit your target market and have expressed interest already. Be sure to capture their details!

Shopper — It’s finally happened! The Shopper has bought something from your business. You have a new client! But do you really? How do you ensure at this point that they come back? What can you do to move them up the ladder?

Customer — The Customer buys for a second time. You have done a great job on your first impression, and they have come back. What do you do to say well done for coming back? How do you make sure there is a third purchase?

This is the stage that can be really challenging. It is so much easier to increase sales from our existing clients than finding new ones, yet we often tend to get a little stuck concentrating all our efforts on the bottom 4 rungs of the ladder.

We work hard, and throw a lot of our marketing time and budget on moving the Suspects to Prospects and then Prospects to Shoppers. We are so pleased to have made sales and gained clients that we almost forget about them, and circle back to get more newcomers.

It is important at this stage to point out that we should definitely continue with the lower rungs — we will always want new clients! But we should shift some focus on the next 3 steps, as they can add a lot of value.

Back to the steps…

Member — a Member is a consistent buyer of your products or services. You should consider how you can create a membership. How do you make them feel special or ‘part of something’. You can offer incentives and privileges —  such as VIP cards and events, early bird deals, birthday treats or rewards for referrals.

There are many different incentives you can think of offering so that they feel like members of something exclusive. The loyalty starts to kick in, and they may no longer look elsewhere for competitive products or services.

Advocates — This is where your members start to do your marketing for you! Through testimonials and referrals, they will be selling your business to others on your behalf.

And lastly the top of the ladder…

Raving Fans — Like advocates, they do the selling for you, but at such a level it makes a huge impact. These clients continue to buy from you, and tell everyone all about why your products and services are so great! They RAVE about why they should choose you too!

Raving fans — a phrase coined by Ken Blanchard and Sheldon Bowles in their book of the same name — refers to those customers that have been so overwhelmingly impressed with your product or service that they can’t resist telling everyone else about it.

They will recommend you often, without being asked, and will allow you to slot potential clients straight in at shopper level. This can be one of your most powerful marketing tools!

Next Steps

 

  • Think about your current prospects and customer base. What can you do to move these up one level of the ladder? What would happen to your business if you could achieve this?
  • Consider where you are losing people, are you too focused on the lower rungs? Are you not rewarding customer loyalty? What can you do to make sure they stay with you, and maybe even move up a level?
  • Do you have any raving fans? Who are they and what do they love about you? Utilise this information to amaze your other members and advocates to boost them to raving fan status!
  • Remember that business growth is more likely from elevating members up the ladder than bringing more suspects and prospects on board.

By using the Ladder of Loyalty strategy, you are aiming for a continued flow of business — not focusing too much on the lower rungs — but approaching each of the steps with the same level of proactive customer service. Your aim is to expand membership, whilst also retaining those loyal existing members.