How Do I Build Loyal Customers? | Customer Loyalty Ladder [Updated 2021]
Updated: Jan 3, 2021
A simple tool to help you map out a clear plan on how to turn the average person into a Loyal Customer
American business author, Michael LeBoeuf once said that, “every company’s greatest assets are its customers, because without customers there is no company.”
If you’ve ever seen an Android phone user debate with an iPhone user, you know that when customers become loyal to their brands, they become an extension of the business. Loyal customers who truly love your brand and business can become the best sales people. The question is, how do you turn the average person into a loyal customer that will advocate for your company?
A simple way to look at that journey is the Customer Loyalty Ladder. Essentially, what the Customer Loyalty Ladder argues is that people begin as Prospects (aka potential customers) and work their way up to becoming Advocates (aka loyal people who actually work to convince others to buy from your brand). Your role, as a business leader, is to identify the specific task that are needed to convince people to go from one level to the next. Let’s talk about this.
Prospect -> Customer The first level is prospect, this is someone who may be potentially interested in buying your product or service. Your goal at this level is to turn as many prospects into customers, which means get them to buy at least once from your business. Understand that the process of turning prospects into customers is a huge topic and there are millions of ways to do this. My basic recommendation is that these individuals are often hungry for information so figure out what that information is and provide it. Some of them are wondering about price, others about quality, others are debating between your product and a competitors. Focus on one person at a time, identify their questions, and provide them with the information.
Customer -> Regular Customer Congrats! You got the Prospect to buy something and become a Customer. However, that was just one sale, don’t you want more? Now, your goal is to get the Customers to turn into Regular Customers. There are many ways to be able to do this,
Customer Loyalty Program — Coffee shops give out punch cards which tell customers that if they buy 10 coffees, the 11th with be free. Barbershops also follow that method. Clothing stores like Macy’s have customers join their loyalty program by offering an initial discount and then they reward (discounts, special offers, etc.) customers every time they come back.
Email or Call List — A very simple way is to simply collect emails or phone numbers. Next time a customer buys something, ask them if they would like to join your email list of special offers. Then, simply follow up with them! Send them a thank you email the next day, then send them a special return discount a week later. Experiment with this!
Regular Customer -> Supporters Nice! The Customer keeps coming back and is now a Regular Customer. Now, it’s time to get them to go from simply buying your products to believing in your brand. The important thing here is that so far, the relationship has been transactional, they give you money and you give them a product/service. However, a Supporter is a customer who not only buys from you but also believes in your business. Instead of viewing each product as an individual thing, Supporters believe in the values of the company to the point where they trust you. When Apple releases a new product, Supporters immediately believe that the product must be of great quality and value because they believe that Apple will always have high quality products.
For this transition, you need to know what your company believes in. What are the values that you want to be known for? Make sure they are clear and put into your products/services. A practical easy step for this step is to get stickers. Brands like Patagonia, Coca Cola, and Supreme are known for giving away free stickers which Supporters will then put on their laptops, bottles, etc. Why spend the extra money to make stickers? Because it’s an easy way to get your Regular Customers to start showing the rest of the world that they like your brand, which slowly turns them into Supporters.
Supporters -> Advocates Arguably the hardest step in this ladder is the step from Supporter to Advocate. See, while the Supporter will buy your items and believe in your brand, the Advocate will actively market/sell for you. Depending on your business, there are millions of different ways and I’d be foolish to try and pick one that will work for all. Instead, I’ll leave you with a few suggestions:
Stay relevant — Make sure that you are constantly (don’t be annoying) reaching out to your Supporters and reminding them that you value their business
Offer Rewards for Referrals — Train your Supporters to get comfortable with being Advocators by starting a referral programs. Example: “Here’s a unique code for you, everytime someone buys an item and gives us your code, we’ll give you a reward!”
Summary Loyal customers don’t just fall from the sky and your job isn’t done with the first sale. They require a process which helps them grow into loving and advocating for your business. Using the Customer Loyalty Ladder model, you can now map out each step and come up with plans on how to move the customers up to Advocators.
Let us know your thoughts in the comments below!