Measuring Success With the Loyalty Ladder
September 11, 2020
As marketers and business developers, one of the greatest challenges we face is measuring success. When it comes to client relationships and the strategies it takes to win new work, an effective measurement tool is the Loyalty Ladder. It’s a five-step process focused on moving a client through the various relationship levels, starting with qualified leads who have an opportunity to hire firms for services all the way to loyal brand champions who will advocate for a firm in their sphere of influence.
In the late 1990s, marketing theorist Adrian Payne developed the Relationship Ladder as a concept that clients can be transformed from cold potential buyers into loyal supporters of a brand. The five stages he identified are Prospect, Customer, Client, Supporter, and Advocate.
In the A/E/C industries, these same principles apply and are an excellent foundation for mapping your client journey while engaging all players at our firms – from marketing to business developers to technical staff – to actively participate in bringing business to our firms. We do this through transitioning our relationships from prospects to advocates.
Prospects have a need for your firm’s services and, with that, comes the potential opportunity to hire your firm. While the prospect may have familiarity with your firm, typically there’s no existing relationship. Prospects are identified as part of BD strategy, based on client personas, with a corresponding client-capture plan for each potential client.
Once a prospect is identified, marketing and BD kick into high gear and work collaboratively to raise brand awareness. Brand awareness is the level to which your brand is recognized by potential clients and also associated with your firm’s service and/or people. Seth Godin said he believes building a valuable brand includes building “the most predictable, emotional experience you can among those that care about you.” The focus of marketing is to ensure consistent brand experience to engage the prospect into becoming a client.
Trust begins when a client invites a firm to engage or when a firm is hired. Through focused brand awareness campaigns, the client becomes aware what’s special about your services, experience, and expertise and believes you can provide the best solutions for their company or project.
Loyalty is all about repeat business. According to the White House Office of Consumer Affairs, it costs six to seven times more to acquire new clients than it does to retain current ones. Harvard Business Review reports that increasing customer retention by 5% can increase profits by 25% to 95%.
When you reach advocacy, your clients rave about your services and encourage others to trust you. They have enough trust in your firm to promote your firm to prospects, provide testimonials, and generally help you expand your client base.
Moving a client from prospect to advocate takes work. The most successful client relationships take persistence, time, and effort to be effective. Following a process like the Loyalty Ladder helps ensure you are intentional and allows your firm to measure its success.
Article written by SMPS President Doug Parker, FSMPS, CPSM, who is principal of Elevate Marketing Advisors. He can be reached at firstname.lastname@example.org.