Loyalty ladder marketing

Graham McGregor says The Loyalty Ladder is an excellent road map to follow to increase your sales and profits. Image: Thinkstock.

One of the most useful marketing strategies I've ever come across is 'The Loyalty Ladder'.

The Loyalty Ladder comes from a great book called Up the Loyalty Ladder by marketing expert Murray Raphael and his son Neil Raphael.

The Loyalty Ladder is simple to learn, gives you an excellent road map to follow to increase your sales and profits and is made up of five steps.

Most of the people your business deals with will be on one of these five steps.
Once you have identified where a person is on the Loyalty Ladder you then have a very simple question to ask yourself.

'How can I move this person one step higher up the ladder?'

Let's take a quick look at each of these five steps:

Step Five: This is the highest part of the Loyalty Ladder.
People on this step are called Advocates and they tell everyone they know how wonderful your business is.

Step Four: Here you have Clients.
These people have purchased several times from your business.

Step Three: On this step you have Customers.
This is a person who has made one purchase from your business.

Step Two: Here you have people called Shoppers.
These people have an interest in what you sell and have made contact at least once with your business.

Step One: This is the lowest part of the Loyalty Ladder.
People on this step are called Prospects and could potentially buy something from your business.

So how do you treat people on each of these five steps?

At the bottom of the Loyalty Ladder is a potential prospect.

They may be interested in your product or service. Your goal in all your marketing to prospects is to move them one step higher so that they now become shoppers.

In other words they now make contact with your business. (This could be by phone, email or even a personal visit.)

One way you might do this is to offer a free special report that might be of interest to a person considering buying your type of product or service.

Here's a good example
If you are a dentist specialising in cosmetic dentistry you might offer a free special report called 'How to have a movie star smile in three simple steps with cosmetic dentistry'.

Any person who orders this free report has now gone from being a prospect to a person who has now made contact with your business.

Now they are a shopper what is your goal? You want to move them one step higher so they make one purchase from your business.

One way to do this might be to show compelling testimonials from happy people who have already used your products or services and are delighted with the results.

So in the example of the cosmetic dentist they might have dozens of positive testimonials on their website from delighted clients.

These testimonials will be useful in converting a number of shoppers into paying customers.

They are now a customer and what do you do next? You want to move them one step higher and turn them into a client.

In other words, they make a repeat purchase.

To do this you might send them a hand written thank you card and a small gift to show you appreciate their business.

If you make customers feel valued and appreciated it makes it easier for them to make a repeat purchase.

Once they are a client what is your next goal?

Move them one step higher and turn them into advocates.

An advocate will tell everyone they know how great your business is and encourage many other people to buy from you.

To create advocates you might like to stay in touch with your clients and add value each time you make contact.

Over time consistently adding value will turn a number of clients into delighted advocates.

Remember this
The higher up the Loyalty Ladder the more valuable a person is to your business.
And a good goal in all your communications is to do things that will move people one step higher on the loyalty ladder.

A satisfied customer is the best business strategy of all.

American business author Michael Leboeuf

Action Exercise:
1. Write down the names of two people who are on each of the five rungs of the loyalty ladder.
In other words write down two prospects, two shoppers, two customers, and so on.

2. Write down one action step you could take that may help in moving each of these people one step higher on the ladder.
For example you may send a thank you note to a customer.
You might give a client a free gift to thank them for their repeat business.
You might send some helpful material to a shopper who has not yet made a purchase.

3. Complete at least one action step this week for each of the people you have identified in step one.

Graham McGregor is a consultant specialising in memorable marketing. You can download his 396 page 'Unfair Business Advantage' Ebook at no charge from www.theunfairbusinessadvantage.com