Existing Customer Management

Creating Loyalty and Selling More to Customers

Dec 23, 2007 Jack Roberts

Getting existing customers to purchase again requires two things. Firstly, you need to keep them. Secondly, you need to sell more to them. This means increasing the loyalty of your customers.

The Loyalty Ladder

There isn’t a single point when you can say; ‘loyalty has now been achieved’. It is a continuous spectrum ranging from complete disinterest through to sharing your business successes and risks with you.

A good way to think of this is the ‘loyalty ladder’ (explained in Relationship Marketing; Creating Stakeholder Value by Christopher et al, Elsevier, 2002). Customers move through the stages below, with the help of marketing activities.

Prospects

At this stage people may not even have heard of you so the aim is to seek new customers. Consider encouraging potential customers to try your products or services, perhaps for free or at a discount.

Customer

The Prospect has now moved from trying your product to purchasing from you, but only once. It’s very early days in the relationship and you need to make sure they are happy with what they’ve purchased.

Consider implementing a ‘Welcome Programme’ where you provide them with details of your company’s product offerings encouraging them to try other products. Remember that they are likely to be favourably disposed to buying from you again at this stage, providing the initial purchase experience was satisfactory.

Clients

The Welcome Programme has been sucessful and they’ve made subsequent purchases. Now you have them. Now it’s time to think about implementing a ‘loyalty programme’. Keep in touch regularly and remind them of the benefits of your company and products, always encouraging them to buy more from you. The more they buy, the more loyal they become.

Supporter

At this stage they like and trust you. They believe you have their interests at heart and look after their needs. They’re still vulnerable though. If a competitor comes along with a better offer or you fail to deliver they may consider using someone else. You need to maintain the loyalty activities.

Think of a Supporter as someone who would recommend you to a friend or colleague if asked for a good supplier of your product or service. They are good targets for Recommend a Friend schemes.

Advocates

Customers at this stage are likely to promote your company without being asked first. They depend on you for a particular aspect of their lives or business and wouldn’t want to lose you. Make sure you spend time with them as it would make a noticeable impact on your bottom line if they were lost.

They would also welcome the opportunity to help you develop your business as it makes them realise that you value, respect and appreciate them. Invite them to regular forums to discuss new initiatives and perhaps even to the office Christmas party.

You will have very few Advocates but slightly more Supporters. The longer you’ve been in business the more you’ll have. Most of your purchasers will be at the Customer or Client stage.

Devote some time and attention to Customers and Clients, they are more likely to buy than your prospects are. You can’t neglect Prospects as you need a regular flow of new customers, but they are a harder sale. Focus your resources on where you are likely to get the greatest returns, i.e. Customers and Clients.

For hints and tips on how to do this, read Building a Loyal Customer Base.

© 2007 Jack Roberts