The loyalty ladder can be an important marketing tactic for many companies across the world, typically, you’ll find it being used in supermarkets or large department stores.
The general idea behind the Loyalty Ladder is that consumers can be moved along a range of loyalty using a number of integrated marketing techniques.
In many cases, the loyalty ladder will have four different stages, these are:
- The Prospect
- The Customers
- The Clint
- The Advocate
Let’s take a closer look at each one in further detail:
The Prospect – The Loyalty Ladder begins with the Prospect, this includes anybody who has heard or seen an advertisement related to the company. Typically, the Prospects pay attention to the message and promotions of the company and they generally convert into customers at a later date.
The Customers – These are the person who actually make a purchase from the company, either buying a product or a service.
The Client – When customers come back to the company then turn into a client, which basically means they buy for a second time. This can be attained only when the service given by the company was as the customer expected.
The Advocate – This represents a customer who gives unpaid advertising for the products or services of a company. Word of mouth marketing is mainly done through advocates of the company.
As you can see the Loyalty Ladder can be a lucrative model for many businesses, unfortunately the error that most businesses make, is the fact they invest more in attracting new customers in the first stage, rather than keeping the already existing customer satisfied and happy. In order to be able to do the Loyalty Ladder, businesses need to be able to identify and assess which customers belong to which stage of the process.