In a world where it’s gotten exponentially more expensive to acquire a new customer, creating customer loyalty and raving fans should be the number one priority of every business.
In this article, we’re going to dig into customer loyalty ladders, a framework that you can use to create and foster customer loyalty.
We’ll walk through what a customer loyalty ladder is and cover ten ways to engage customers and turn them into raving fans.
Customer Loyalty Ladder: Why Create Raving Fans?
Pretty much every industry these days is being turned into a commodity. The last thing you want customers to do is price shop and get stuck in a race to the bottom.
If you do business like everyone else, you can expect the same results. Or you can go the extra mile, be unique and create raving fans.
Raving fans are customers who are so loyal to your brand that they spread the word about your product or service to their friends, families, and colleagues.
Not only do they provide valuable word-of-mouth marketing, but they’re also likely to spend more money with your business and be less price sensitive than other customers. Customer loyalty also serves as a competitive moat to give you a sizable competitive advantage.
One of the most effective and affordable growth techniques in any business is referrals, and your goal should be to create a referral-generating machine through continuously exceeding your client’s expectations and giving them a “wow experience.”
This doesn’t just mean following through with what you promise but looking for any opportunity to overdeliver. How can you take the next step in doing something above and beyond or unusual that sticks out in their mind?
Think about the best buying experiences you’ve ever had. The reason why you remember these is probably because the business did something unusual and did something special.
It could be excellent service that made them stand out. The best companies make every interaction feel like an exciting experience or event.
Disney World is an excellent example we can all learn from. With over 58 million visitors a year, they have an army of loyal fans who keep going back year after year.
When you go to Disney World, you’re not just buying a ticket to a theme park. You’re buying memories. They do everything they can to create the “Disney Experience.”
It’s the little things that make up a top-notch experience. It won’t ever be the cheapest theme park, but you can bet your bottom dollar it will be the best.
Think about how you can replicate Disney’s approach in your business.
Customer Loyalty Ladder: 5 Steps to Raving Fans
A customer loyalty ladder is a 5 step progression to take customers from initial contact with you and eventually turn them into evangelists for your business.
As relationships progress, businesses should start creating moments that wow their customers. This could include going above and beyond expectations, offering unique experiences, or giving thoughtful gifts.
The first step is to assess where your customers are today. Once you’ve identified where your customers fall on the customer loyalty ladder, you can start working on moving them up to the next rung.
Step 1: Suspect
This is a very broad group of people with no prior connection to you or your business.
This could be anyone who could be a potential customer for your product or service – anyone fitting your ideal client profile or within your local area.
Step 2: Prospect
This is someone who has expressed interest in what you have to offer.
They likely have provided their contact information and are now a lead (e.g. could have signed up for your email list or called into your office). Once you have their contact info, you can begin following up and trying to convert them into a customer.
A common mistake I see from business owners is giving up on leads too early. Be willing to give it at least 4-5 touch points (emails, letters, phone calls) before you give up on a lead. Along the way be sure to continue to add value, educate, and be entertaining.
I’d highly recommend spending a lot of time on your inactive or past customers and prospects who didn’t convert. You’ll be surprised with how many folks will become a customer later on down the line.
Step 3: Customer
At this point, the individual makes their first purchase from you and money has exchanged hands. This is where the real work begins and where trust can start to be built.
This can be done by overdelivering on promises, providing great customer service, and maintaining transparency.
Many business owners have customers they have never called after the initial sale. We spend hundreds of dollars attracting customers, but quickly abandon them after the first sale.
Instead of passively sitting back to wait and let customers come back to you, you have tremendous opportunity to retain and grow the relationship if you consistently follow-up.
The cost of retaining an existing customer is often as small as as an email or a 2 minute phone call.
Step 4: Satisfied Client
As the customer continues to buy, they transition into a satisfied client.
At this stage, they are not truly a loyal customer yet, and could be easily swayed to a competitor who offers a sale or compelling offer.
Our goal is to move them to the next stage and turn them into a profitable customer for life.
Step 5: Raving Fan
Once a customer has transitioned into a raving fan, they not only know, like, and trust you – they are willing to shout from the rooftops and tell others about your business.
These people are incredibly strong brand advocates and lifelong customers. Think of major brands like Apple or Costco that have evangelists – that’s what we should all be aiming for. We want to continue to delight them at every turn so they remain loyal customers for life.
10 Customer Loyalty Strategies: How to Wow Customers and Create Raving Fans
As Walt Disney once said, “Do what you do so well that people can’t resist telling others about you.”
You can’t do this by just doing what’s expected, as that’s table stakes.
You have to give customers an experience they didn’t expect – do something special that makes them talk about you. How will you “wow” your clients and customers with an experience they have to tell their friends and family about?
Here are some questions I’d ask you to think about:
- What can you do to turn a sales transaction into an experience?
- How can you create an emotional and memorable experience for clients?
- What can you do that will cause your clients to want to immediately tell someone else about you?
The good news is that wowing your customers does not have to be time-consuming or expensive.
The key is systematically building in small gestures that show you really care. Not doing this occasionally, but making it apart of your DNA as a company. Over time, these small actions build massive goodwill.
Here are 10 strategies on how to do it:
1. Map out a System to Wow Customers
I recommend you set up a system that your employees follow to show appreciation to every client – make them feel like the most important client in the world.
While it feels spontaneous to the customer, you’ve carefully architected it behind the scenes.
1. Make a list of every step or contact a new or returning client makes in your business.
This includes everything – how they first hear about you, their first contact with you, how you take care of them, their first purchase, how you follow-up, return visits, etc.
2. Next, write a list of 10 possible things you could do to improve the experience and demonstrate a “Wow” factor. These could be how you can show greater appreciation, better handle complaints, or give surprise bonuses.
3. Once you’ve brainstormed a list, decide what it would take to put each of those systems in place. Which are most practical and low cost?
4. Finally decide on the most important handful and put them into place immediately.
2. Create a World Class Onboarding Experience
I’ve created a detailed, step by step post on designing an onboarding journey that I recommend you take a look at.
To summarize the key points: you need to make sure that you’re doing everything possible to stay in front of your customers (and overdeliver) after they’ve made a purchase.
This means having a plan for how you’re going to stay in touch and what actions you want them to take during each interaction.
As an example, let’s say you own a software company and someone just bought one of your products.
Your post purchase touchpoints might look something like this:
- Send a thank you email immediately after purchase
- Add them to your email list and send them valuable content once per week
- Call them 30 days after purchase to see how they’re using the product and if they have any questions
- Run a special promotion for them 2 months after purchase
- Plug them into your ongoing customer nurturing communications
- Survey them 1 year after purchase to get their feedback
3. Give Away Appreciation Bonuses to Customers
Consider offering an “appreciation bonus” to special VIP customers that other people can’t access. You give them exclusive access or perks that others can’t get a hold of – it could be a special event, surprise product, financial incentives etc.
This sort of technique does not require much in terms of investment but does wonders for customer satisfaction.
4. Informal “I Care Calls”
These are simply personal phone calls to your customers to check in and see how they are doing. You can ask about how your product/service is working for them, ask if they have any concerns, or just ask them how they are doing.
I think these calls work better being unscripted (since they come off more genuine) and I’d recommend using these with your top clients. The key is not to sell at all on these calls, it’s simply to show them you care about them as a customer.
You should especially focus these calls on your top customers who bring in a disproportionate amount of your business.
5. What Do You Do When Something Goes Wrong?
We all make mistakes, it’s inevitable. What separates the businesses that maintain customer loyalty despite making a mistake is how they handle it when things go wrong.
Here are a few key steps you can take to mitigate any potential damage:
- Apologize Quickly and Sincerely – The first step is always to apologize. This shows the customer that you are taking responsibility for the mistake and that you are truly sorry.
- Fix The Problem Quickly – After you have apologized, you need to take action to fix the problem. This could involve replacing a damaged product, refunding a customer’s money, or giving them some sort of compensation. If you work at a salon and your clients appointment has to wait longer than expected, you could give a discount or free accessory.
- Follow Up With The Customer – Once you have taken steps to fix the problem, you need to follow up with the customer to make sure they are satisfied. This could be as simple as a phone call or an email.
By following these steps, you can turn a negative situation into a positive one and show your customers that you care.
6. Make it Easy for Customers to Give Feedback
You need to make it easy for customers to give you feedback, both good and bad.
The best way to do this is to create a simple survey that you send out after each interaction with a customer. This could be an email survey, a physical survey, or even a short phone call.
After service, you could make a follow-up call to find out how things went for your customer. Ask simple questions such as, “Is there anyway we could make your experience even better?”
The important thing is that you’re constantly collecting feedback so you can improve the customer experience. Your customers and clients will often be more than happy to give you ideas.
7. Remember the Strategy of Preeminence
We all want to be led by someone that has our best interest at heart.
Treat your customers as dear and valued friends or relatives. If you did, how would your relationship change or evolve?
Jay Abraham has a terrific video on preeminence that is worth watching:
8. Make It Easy to Do Business With You
The easier you make it for customers to do business with you, the more likely they are to come back and buy from you again.
This means having a streamlined process for everything from buying to returns/exchanges. It also means making sure your customer service is top-notch and easy to reach.
Finally, it means always being available to answer questions and help solve problems.
By making it easy to do business with you, you’ll create a loyal customer base that will keep coming back, again and again.
9. Increase the Frequency of Your Communication
The #1 secret to extending the life of a customer and increasing purchase frequency is communicating with your customers.
The more communication you have, the more trust is established, and the more they will consider you friend who cares. It’s also an easy way for you to win back old clients.
Ideally, you’d offer a mix of value as well as special offers to keep them as a customer.
Use any good excuse you can find to connect with your customers:
- Tell them about new products that are arriving
- Give them a heads up about special sales
- Educate them on ways they better use your product/service and reach their goal
- Entertain them with stories about your business and weekly activities
- Write to wish them a happy birthday and happy holidays
- Give unannounced bonuses
- Case studies, success stories, and testimonials of successful customers
- Ask them for referrals and offer them incentives for referrals
10. Communicate in Different Mediums
Not every customer wants to receive information in the same way. In order to reach as many people as possible, you should communicate in different mediums.
Some customers will love getting emails, some will love getting snail mail, and others will love getting calls or text messages.
The important thing is that you’re giving them the information they want, in the format they want it in.
Continual communication methods include:
- Physical newsletters
- Customer appreciation events
- Personal phone calls
- Make visits to your best customers
These are just a few ideas to get you started. I’m sure you can think of many more ways to create a world-class customer experience.
By following the steps on the customer loyalty ladder, you can progressively engage your customers and turn them into raving fans.
The key is to be always thinking about how you can make the experience better for your customers.
If you do that, you’ll be well on your way to creating a loyal customer base that will stick with you for years to come.