Loyalty Ladder: 5 steps to ace your brand loyalty

Loyalty Ladder is a tool that is used by marketers to analyze their customer’s loyalty towards brands.

It comprises of 5 steps, and a process through which the consumer goes up the ladder.

The aim of the marketer is then to come up with marketing integrations to move the customer up the ladder.

In this blog post we answer the following questions:

1. What is the Loyalty Ladder?

2. Why is customer loyalty important?

3. What are the stages of the Loyalty Ladder?

4. How to move customers up the Loyalty Ladder?

5. Ways to maintain customer loyalty

Now let’s look at each of them in detail:

1. What is the Loyalty Ladder?

Simply put, a loyalty ladder can be defined as a framework that is designed for marketers

to understand the loyalty level of their consumers.

It also enables them to find a path, to increase customer loyalty.

More often than not the progress of consumers up the ladder is determined by the efforts of the relationship manager.

Because, getting a customer at the bottom level of the ladder is the job of the marketing manager, and whether the customer moves up or down the ladder is totally dependent on the relationship manager.

Hence, there are stages in the loyalty ladder where the role of Customer Relationship Manager and Marketing Manager overlap.

It’s also important to note, that there can be external factors as well that can determine the progress on the ladder.

For example, in the initial stages of the loyalty ladder, the customer is assumed to be in an ‘experimentative’ stage- where, if given a better deal, he/she can move to the competitors.

But this external effect is minimized more and more as the customer moves up the ladder.

Now before we move on to understanding the various stages involved in the loyalty ladder, let's first understand why do we need customer loyalty?

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2. Why is customer loyalty important?

Loyalty has a direct correlation with your customer’s ‘associations’.

The more favorable associations, your customers create in their minds- the better it is.

This is because consumers are more likely to indulge in brands or products that give them positive associations.

In general, these are the 5 ways behind the importance of customer loyalty

1. Repeat purchase

This is the most obvious one, customer loyalty ensures that your customers are satisfied with your product and are willing to buy it again and again.

2. More revenue options

It is believed that when it comes to repeat purchases, normally customers are open to exploring other variants by the same brand.

This can then lead to more revenue for the brand.

3. You get to Create Brand Advocates

We have already covered a detailed post on Brand Advocacy, but to explain it in short- these are those customers who have purchased your product and loved it to such an extent, that they are now promoting it themselves.

4. Scope for improvement

Most of the loyal customers, do not mind providing honest feedback and this can help your brand tremendously because you can accordingly improvise and make it better.

5. Edge against competitors

Your competitors try extremely hard to snatch your customer, but the only thing that stops this from happening is loyalty.

Now let’s understand the stages of Loyalty Ladder

3. What are the stages of the Loyalty Ladder?

In essence, the Loyalty Ladder looks something like this

Image Source: eightleaves.com

A customer starts from the bottom and moves up to the top, let’s understand each of these stages in detail.

1. Prospect

A prospect is someone who has not yet bought from you but can be considered as a potential buyer.

This is anyone or everyone who has come across your marketing communication has reacted to it but possibly not converted into a customer yet.

2. Customer

A customer is someone who has interacted with your marketing communication and has made his/her first purchase.

This is considered as one of the most sensitive stages in the ladder because this is the stage that determines the possibility of going further up in the ladder.

3. Client

This is a more advanced stage for a customer on the loyalty ladder.

Basically, this is any and every customer who has indulged in a repeat purchase.

Now the number of repeat purchases could be as low as two, but then that respective customer has to fall under the client stage.

4. Supporter

This one is the stage where your customers can be considered as extremely loyal, but they aren’t your advocates yet.

In this stage, customers are willing to experiment more with your other brand offerings.

So the trust is established that if product A is good, the possibility of product B being good as well is extremely high.

5. Advocates

This is the most preferred stage for a marketer.

Here, the consumers love your product and are willing to recommend it to others.

This is different than the concept of influencers, read my post on the same here.

4. How to move customers up the Loyalty Ladder?

Did you know? According to the Harvard Business Review, the cost of acquiring a new customer is 5-25 times higher than retaining existing customers.

So if you already have a customer, you must focus your efforts on making them advocates.

One of the best ways to do this is to offer an emotional reward than only providing functional utility.

Customers are more likely to stay loyal if they are emotionally attached to the brand.

Another way to move customers up the ladder is to ensure maximum engagement.

Each time a customer interacts with your brand, it’s essential that the process is smooth- whereby the customer feels they have made the perfect choice by choosing your brand.

You can also create personalized offerings, your customers love feeling special, and if you manage to do just that, loyalty is bound to increase.

Lastly, incentivize repeat purchases.

This works wonders especially when it comes to the loyalty program, you can provide them reward points that can be redeemed later.

5. Ways to maintain customer loyalty

Even if you have ensured that your customers have reached the advocates' stage, you need to maintain that loyalty with customers.

So, how exactly do you do that?

We can look at the following ways to maintain customer loyalty:

a. Build strong employee-customer relations

This is especially important for brands who have a one on one sales conversion.

It depends on the way; your sales representative or relationship manager builds the perfect relationship with your customer.

It must create a lasting effect.

b. Improvise on your quality

Your product might be the one that is considered the best in the category.

However, your competitor is just around the corner, so it’s extremely crucial to keep improving your offering as and when possible to ensure the loyalty stays up.

c. Personalize your marketing efforts

The more unique, you make your customers feel- the higher the chances of them turning into loyalists or advocates.

But the first step in providing a personalized offering is to understand your customer inside out.

Once you have, you can target those soft areas that will generate a positive reaction.

d. Stay Connected

Send those e-mails to make your customers feel special, provide offers as and when possible, and in general, stay connected to show that you care!

Conclusion:

For brands and marketers, it becomes extremely important to measure the stage at which each of the customers currently is.

And then look at ways to move them up the ladder!

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