Hi, Peter Boolkah here, and welcome to today's edition of The Transition Guy, where we're going to be looking at The Ladder of Loyalty. The Ladder of Loyalty is a journey, and it is a journey that you take your customer through.

Let's start at the very beginning of the customer journey. At the very bottom of the ladder we have suspect. Now, a suspect isn't a person running very fast with your handbag or wallet, a suspect is somebody that actually fits your target market, i.e., somebody that has an interest in your product, et cetera.

Second, we move over to prospect. A prospect is slightly different, a prospect is somebody that's inquired about your product or service and they're actually genuinely interested, they made the inquiry, they're now into your sales process.

A shopper is somebody that has transacted with you once. A lot of people say, “Yeah, yeah, I've got loads of customers”, the reality is, if you go back and look at your transaction base, the chances are you've got a load of shoppers and that's all you've got, because a customer is slightly different.

A customer is somebody that's transacted with you on more than one occasion. That's when you've got people coming back, coming back, coming back.

Now, ask yourself a question: When you're doing all your marketing, do you spend most of your time, most of your sales effort, down here on the prospect and suspect list? Most definitely. We'll come back a little later on why that's a really bad idea.

Next thing we've got is a member, a membership.

Giving your customers somewhere to be where they feel they belong. I'll tell you who's really good at this; airlines. Airlines are really good at suckering you into their membership schemes, how do I know that? I am said sucker. Who am I suckered in with? British Airways.

I use British Airways for a number of reasons, number one, the number of flights and routes they offer, very comprehensive, allows me to get to anywhere in the world where I need to be, but number two, I started off with BA. Do I particularly enjoy their level of service on their planes?

Not particularly. Do I think they have the most elegant cabins? No, not particularly. Have they got very good lounges? Yes, absolutely. It's interesting how they entice you, so when you first come onboard you're a blue member, you have absolutely no benefits apart from having a card that has a membership number on it. Then you move up to bronze, silver, then gold.

As you move up their tiers, your benefits become far more extensive, you get more Avios points so you can earn more on your flights, you get access to different lounges. I'm very fortunate and pleased to say that I've got a gold card with them, which gives me access to their first class priority check in, which is a great service, but also it gives me access to their first class lounges.

What does this mean? Because I'm a sucker for the membership, I tend to fly with them where perhaps with other airlines I might have a better deal.

Then we move onto advocates. What are advocates? Advocates are these people that love to tell everybody about your business, they love what you do so much that they go out there and they be your best marketing, they go out there and they just sell your business for you in terms of they market the business for you.

Where I personally experience this is with Apple products, I've been using Apple products for the best part of ten years, I think that their laptops are absolutely amazing, their phones are good, et cetera, and I just love their whole customer service. What do I do when I see a poor PC user? I try to educate them on their wrongs.

I always market Apple products because I trust them and I love using them. Then you've got the raving fan, where advocates are your marketeers, raving fans are your best salespeople, because what they do is they go and they get you customers.

They do the sale for you. You'll know these raving fans and you'll know what they do for you, because you'll have people coming to your doorstep and you don't even have to sell to them. They're ready to buy, you've just got to steer them in the right direction.

Let's look at the ladder in more detail. At the top here you're going to see four areas: Trust, speed, margin, and loyalty. I've said before we operate in a high trust-based economy, when you're at the raving fan level there is a very high trust bank that's been built up, the customer has huge trust in you. Down here at suspect level, guess what? Suspect, prospect, trust is really low. They don't know who you are, you've not earned the right.

At raving fan level, the speed of doing business is extremely fast, you're not having to wait for a decision, et cetera, more or less the decisions are instantaneous.

Down at prospect, suspect level, it can be quite a slow, arduous process. Margin, what you tend to find is that further up the ladder the higher the margin, because the clients just don't question the prices, they trust you to give them the right deal. Not to rip them off, but they trust you, they trust the price you have. Down the bottom, guess what you keep hearing? “Well, you're too expensive, you're too expensive”, because there's no relationship.

Then you've got loyalty. Too often people out there say, “I've lost this customer, I've lost that customer.” The only reason that you lose customers is because your relationship with your customers sucks. You go up here, raving fan, advocate, loyalty is pretty strong. Suspect, prospect, loyalty is really weak.

What you've got to ask yourself is, in the business, how are you moving your people through the ladder of loyalty? Because the majority of business owners, they focus their marketing efforts solely on prospect and suspect, and especially if you need high business, you need money coming in quickly, focusing on your prospects and suspects is going to cripple your business, because speed is slow, profits are low because there's no relationship, loyalty is weak so your competition can come in and nab them before you've got them, and the trust is low.

How often do you actually say, “Do you know what? I've got a marketing campaign, but I'm going to be marketing to my customers. I am going to get my shoppers to come back and become customers, I am going to create a membership scheme where my customers feel they belong to my company, I'm going to move them to advocate and I'm going to create raving fans”?

Because if you're not doing that, and most people are not doing that, then what you're going to find is business is going to be a hard slog for as long as you're in it. I want you to think about this:

You get a shopper that's bought with you once, the chances are a shopper will probably give you a suspect or maybe a prospect. A customer will give you a prospect for sure, however, we don't know how warm that prospect is, so you've still got to do quite a bit of selling and taking them through your sales process.

A member, someone that belongs, will give you a warm prospect, an occasional shopper if you're lucky. Advocates is when it gets really interesting, advocates will bring you in a shopper for sure, or maybe a really hot prospect. Raving fans, well, they bring you shoppers and they bring you customers.

A lot of you, you've got tons of salespeople out there and you're moaning and bitching how they're not performing for you. However, your strongest sales team are you customers.

Get them up the ladder of loyalty, get them to raving fan status, the chances are you're not going to need as many salespeople. To wrap up, look at your business, look at your ladder of loyalty, do you have one in place, do you not?

Do you want to have one in place? Because if you do want to have one in place, get in touch with me now. Let's see how we can put the ladder of loyalty into your business.

Remember: Failing to learn is learning to fail.

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