A1 Customer Loyalty Ladder
Unit 28: Branding
The customer loyalty ladder is a model used to categorise customers from suspects to advocates based on their level of engagement with a brand. By gathering data on customers in each category, marketers can devise more effective strategies to help customers move up the ladder. Customer loyalty brings the benefits of repeat purchases, more revenue options and brand advocates. The cost of acquiring new customers is significantly higher than maintaining existing ones making it desirable to establish and maintain customer loyalty.
Word-of-mouth is thought to be the most effective form of marketing. Consumers place more trust in feedback heard from peers and online reviews than through advertising created by the business itself. It is therefore desirable for a business to have advocates who will help promote its products.
Suspects to Prospects
Suspects are potential customers for an organisation who are aware of the organisation's promotional campaigns but are not currently purchasing products.
Strategies to convert suspects into prospects include';
Ensure promotional mix communicates product benefits.
Monitor website activity. What content are they engaging with?
Monitor competitor activity.
Prospects to Customers
Prospects are people who have been impressed by the organization's promotions and are strongly considering purchasing products. They will be deciding between your brand and others and will have questions that need to be answered.
Strategies to convert prospects into customers include';
Anticipate and respond to any questions about differences with rivals.
Review pages.
Product information on websites.
FAQs
Chatbots
Customers to Clients
Customers are first-time buyers of a brand who are currently using their products. It is essential to ensure that this group experiences customer satisfaction levels that they wish to move up to loyalty ladder.
Strategies to convert customers into clients include;
Incentivise repeat purchases, e.g. discounts and loyalty schemes.
Obtain contact details and personalise communication.
After sales care.
Clients to Advocates
Clients are people who have purchased a brand's products on multiple occasions and may continue to do so in the future. The brand has achieved customer loyalty with this group. Investment in encouraging this group to continue making repeat purchases is cheaper than acquiring new customers. This group is likely to consider other product offerings from this brand over rivals.
Strategies to convert clients into advocates include;
Appreciation of custom through communication.
Loyalty programmes and special discounts.
Gather feedback and use to inform future direction.
Encourage them to share brand and products on social media.
Advocates
Advocates are people who have made repeated purchases of a brand's products. They are happy with their experiences with the brand and recommend it to their acquaintances. Brands benefit from word-of-mouth from their advocates which is free and widely considered to be the most effective form of marketing.
Strategies for maintaining advocates include;
Strong customer-employee relations.
Gather and respond to feedback.
Continuously improve quality and USP.
Personalisation.