You know that customer loyalty is a powerful resource, one that directly impacts business growth by reducing customer acquisition costs and customer churn by generating referrals and increasing your company’s average customer lifetime value (CLV) to grow your customer list and company revenue. Jeffrey Gitomer, a recognized authority on sales and customer loyalty and author of 15 books, has a blunt observation to share with Freelancers and business owners. In his book Customer Satisfaction Is Worthless, Customer Loyalty Is Priceless (1998), Gitomer shares an outrageous truth—if you disappoint a customer even once, s/he will tell 10 people about your faults. On the other hand, when you (merely) satisfy customer needs and expectations, it’s likely that your customer will tell no one—you did your job and so what.

The good news is, when you show some enthusiasm and exceed the customer’s expectations, s/he will usually tell others how wonderful you are. Here’s the lesson—Freelance professionals and other business owners cannot expect to maximize the potential of their business venture by simply showing up to do the job; that won’t move the needle and make a positive impact on reputation (brand) or revenue. You’ve gotta hit the ball out of the park every time, because acting like an order taker, making sure the fries and everything else are in the bag, is not enough.

In his book, Gitomer identifies critical moments in the buyer’s journey that influence whether customers will become your devoted brand advocates, make a one-off purchase and disappear, or remain indifferent and ignore you. By using what Gitomer describes as the customer loyalty ladder, you’ll refine the timing of the marketing and sales messages that you create to persuade prospects to become customers and eventually become repeat customers.The customer loyalty ladder takes it further and shows how to cultivate loyal customers and even brand advocates who become cheerleaders and make referrals, give testimonials in your favor and play a decisive role in the vitality of your customer list. It’s powerful stuff.

Each rung in the ladder represents a different stage in customer loyalty to your brand. It’s no secret that customer loyalty can make or break your company’s long-term success. You may be aware of customer retention statistics that indicate the probability of selling to an existing customer is 60-70%, while the probability of selling to a new customer is only 5-20%. Gitomer labels the process of moving up the ladder as the customer acquisition journey  Identifying where each customer stands on your customer loyalty ladder enables you to deliver a marketing message tailored to move that customer toward the top.

As you probably guessed, the customer loyalty ladder starts at the bottom with those the author calls suspects; they are not yet, and may never become, an actual prospect. Suspects barely know that you and your enterprise exist. The top rung of the ladder is where your most loyal and valuable customers reside: they’re the highly coveted brand advocates. Gitomer also cautions that in the nebulous middle are those with whom you’ve done business but unfortunately feel that you (or your team) did only what was necessary—nothing more, nothing less—causing this cohort to feel no attachment to your product, service, or organization. These folks may or may not do business with you again.

Stage 1: Suspects

These people know your brand exists and might have some level of awareness as to what you offer, but they’re not ready to make a purchase. They might have seen an ad, visited your website, or checked out your social media—but they have hesitations still. Suspects may potentially have use for your service product, but it’s not a front-burner issue. They are the largest group and they are ruled by inertia or indifference.

Stage 2: Prospects

Members of this cohort have demonstrate interest in your service or product and may have asked for more information. They know your brand exists, they have some awareness of your service or product, but they’re not ready, or able, to make a purchase yet. They’ve most likely have seen an ad, visited your website, or engaged with your social media but they hesitate to proceed. Prospects are weighing their options, and your organization is just one of perhaps several choices in our increasingly competitive B2B marketplace. You may be able to motivate prospects by tempting them with discounts for first-time buyers, free trials, or free access to gated content that they covet. Whatever the case, your goal here is conversion – turning prospects into first-time customers. Look at website traffic, ad engagement and email sign-ups to gauge brand awareness.

Stage 3: First-Time Customers

Needless to say, a customer has done business with you, made at least one purchase. You finally got the customer to take a chance on your brand and it is a relief and validation. But you can’t exhale yet—to be truly successful you’ll need repeat business—that is, customers who return to do more business with you. Over the years, make it a point to calculate the customer lifetime value vs customer acquisition cost of those on your customer list. 

There are a lot of one-off purchases made in the world. Every business owner is delighted to receive that first purchase a welcome a new customer, but there can be no misunderstanding that a viable customer list is not created through a series of one-offs. The first purchase is a critical juncture, when you would be wise to take steps to turn a one-time buyer into one who becomes a loyal advocate over the long term. Your job is to start the process with immediate post- purchase contact. A follow-up email thanking the user, providing value with how-tos while the customer anticipates delivery, or a quick survey to ask the customer to evaluate customer service are all a good first step. 

Examine conversion rates and purchase behavior – how many return for a second order? Make it a permanent part of your post-sale follow-up to touch base with them to see if you missed the mark in any way or if there’s anything you can do to help them make the most of their product. 96% of consumers say customer service influences brand loyalty.

You can also start sending personalized follow-ups with complementary product suggestions, or even go as far as offering incentives for the next purchase (discounts, loyalty program enrollment, etc.).The key takeaway is that a positive first experience can make or break your customer retention efforts. If you fail to act, or if your approach is wrong, you’ll have a much lower chance of encouraging repeat business.

Stage 3: Repeat Customers

A repeat customer is anyone who has done business with your company more than once. These customer see value in your service or product, but it will nevertheless be helpful to remind these customers why they should continue to do business with your organization. This is where you can implement a well-structured loyalty program. Tiered loyalty programs allow customers to earn points or exclusive perks over time.

You can also use data to send personalized recommendations that align with their purchase history. Whatever you do, keep up the attentive customer service. It’s been reported that 61% of customers will jump ship and defect to a competitor after a single poor customer service experience.

Stage 4: Loyal Customers

Loyal customers are deeply connected to your brand and choose you because of you and not just because of the products and services you sell. They have an emotional attachment that guides their purchase habits and they are among your most valuable customers. Don’t just take my word for it—one study found that loyal customers can drive up to 65% of a brand’s revenue, even though they typically make up only a small percentage of total customers.

Without question, it is in your interest to go above and beyond when considering how to reward and thank these customers with ultra-exclusive benefits. Your rewards should free shipping or discounts, for example. Instead, think early access to new services or products that you introduce, behind-the-scenes content, invitation to a launch event and unexpected surprises like handwritten notes all go a long way. Use customer lifetime value (LTV) and engagement metrics to see who keeps coming back. You can even poll them and let them tell you why they come back again and again. Give these customers opportunities to interact with your brand beyond purchases with events or opportunities to offer feedback on new product releases. The priority is to make them feel as if they’re not just another customer, but very special people who are part of the movement.

Stage 5: Brand Advocates

Eventually, your most loyal customers may become motivated to become brand advocates. This top rung in the customer loyalty ladder represents your most powerful customers, those who serve as an organic marketing channel for your brand. These customers actively promote your brand to their friends, family, colleagues, even random people they come across on a daily basis. They leave glowing reviews and share your products on social media, too.

Brand advocates are your most valuable customers not only because their testimonials and cheerleading bring interest, excitement and trust to your service or product that results in customer referrals and maybe some PR too. the enthusiasm of brand advocates also lowers your cost of customer acquisition and drive customer growth naturally.

So, how do you move people up the ladder of customer loyalty into this stage? Continue taking other steps to make customers, especially repeat and loyal customers, feel like VIP insiders. Seek their insights from your brand advocates when making decisions about your service or product; involve them in beta testing new features or entry into a new market, invite them to exclusive VIP-only events. A customer who feels involved and part of your business, while also receiving consistent value, can be an influential promoter of your brand, giving referrals and singing your praises.

Assess your customer list

First, examine your customer list to figure out where you’re struggling the most. Maybe you have a hard time getting customers to take a chance on your brand but once they do, they stick around. You have an acquisition problem. Or, perhaps you get customers to buy once but they never come back to make another purchase. You have a customer retention problem and problem with customer churn. Gitomer recommends that you focus on the following questions:

Analyze your customer retention KPIs and figure out where you have the need to level up your performance. You now know what to look for at each rung of the very useful customer loyalty ladder and understand how the customer acquisition journey along with the customer loyalty ladder can improve your ability to improve the CLV in your customer list. To get you started, Gitomer recommends that you focus on the following questions:

• How can you convert one-time buyers into repeat customers?
• What’s the best way to incentivize loyal customers to become brand advocates?
• Where do you see prospects abandoning the customer acquisition journey and how might you correct, or limit, the problem? fix them?

Thanks for reading,

Kim

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