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How to Build Loyal Customers

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When thinking about loyal customers, it is helpful to explain the ladder of loyalty concept. This means that you have to move your customers up this ladder, and you need to keep them moving up the ladder all the time.

It’s important to build a ladder of loyalty for your business because the first sale you make to a customer is typically made at a loss. Statistics show that 9 out of 10 first sales are made at a loss, because there are advertising costs, marketing costs, and commissions that first need to be taken into account. If you don’t get that customer to come back and buy again, that customer isn’t profitable to you.

The stages of the ladder of loyalty are:

Stage 1: Suspect

Suspects are identified as potential customers who fit within your target market and are willing to buy from you if they are in your geographic area.

Stage 2: Prospect

Prospects are suspects who have taken some sort of action like phoning in response to an ad or visiting your business. You must collect all their details so you can stay in touch. This is most important, as building loyalty is all about relationship building. Your goal should be to build a database of prospects.

Stage 3: Shopper

A shopper is a first-time buyer. Even though they’ve made a purchase, they aren’t loyal to your business yet because they are just checking out your product or service.

Stage 4: Customer

To be classified as a customer, your prospect needs to have spent money more than once, and you need to have recorded the sales in your records so that you can differentiate your customers from your prospects. This record should tell you when they last bought something, how often they buy, and what their average dollar sale is.

The trick to getting them to the next stage of the ladder is to take proactive measures to invite these customers back instead of sitting back and hoping they will return.

Stage 5: Member

When your customers make their second purchase, they become members. They now have a feeling of belonging. It is important to understand that customers who make two purchases are 10 times more likely to make more than someone who has only made one. So, you need to put some effort into your members.

You can start by giving them a membership card and a membership pack. How many of your customers know all of the products that you offer? The number is probably lower than you think. So, why not include a product catalog in your membership pack? You can also include samples, vouchers, and more.

Stage 6: Advocate

 An advocate is someone who sells you to other people. The criteria for an advocate are that they will give referrals or promote you, and they keep buying. Advocates are one of your major capital assets.

Stage 7: Raving Fan

The difference between an advocate and a raving fan is that an advocate is someone who will sell for you, whereas a raving fan is someone who can’t stop selling for you. The exciting thing about raving fans is that they can almost be regarded as part of your team. They want to see you succeed. And, of course, they continue buying from you the whole time.

Remember, the aim of the game is to move people up the ladder from customer to raving fan. This is where you begin to make profit.

 

About

Heather Yakes is an internationally recognized business coach and employee engagement expert ranking in the Top 10 in the U.S. & Top 100 worldwide. Heather is the recipient of the 2016 Business Excellence Awards Coach of the Year, the 2018 ActionMan Award for the Best Client Impact, and the 2018 Franchisee of the Year Award. She has 20+ years of experience working with Fortune 500 Companies and Big 4 Consulting.