When you first attract a new prospect to your business, and then educate them to buy something from you, do you then refer to them as a ‘customer’? If so, you could be jumping the gun…because, until that person has bought from you more than once, probably two or three times, it’s not yet their custom to use your products or services, and, more importantly, you’re unlikely to have made any profit from their purchases. Customer loyalty, and profitability, can be a fickle thing, so it helps to understand just how close to the centre your customers are on circle of loyalty. This “Circle” is at the heart of building a great business and is a key to gaining referrals – the most powerful and cost-effective form of marketing most businesses can employ.
Most of us have learned from experience that customers who receive exemplary service often tell others about their happy encounters, while disillusioned or mistreated customers warn plenty of other people not to shop from businesses that have given them less than exemplary service. Even more importantly, angry customers cancel orders and move their business elsewhere, while well-serviced customers enthusiastically will come back more often and spend more money…in other words they move towards the inner circle.
Let’s look at the seven rings of loyalty so you can see how to build truly outstanding customer loyalty:
- SUSPECTS: Those people outside your circle are suspects – essentially, anyone who might buy from you…in other words, your target market. This can be quite specific, or as general as anyone with money in their pocket and who will fog a mirror if it’s passed under their nose
- PROSPECTS: Those in the next ring are prospects – someone who knows about your business; Maybe because of your marketing, from a recommendation or stumbled on your offering. And you may also know something about them; their name and address, for example. Obtaining and recording the basic details about every contact you make with potential customers is the key starting point of building a successful referral-based business. For virtually every type of business, a comprehensive database is invaluable in getting and sustaining repeat business. It’s here, on the outer ring of the circle of loyalty, the whole process begins. Do you have a database that you are keeping up to date? Are you adding new prospects to the list all the time? Are you then marketing to the people on the list?
- PURCHASERS: Once a person has bought a product or a service from you, they reach the next circle, the Purchaser. Not yet a customer – they have only bought from you once and you don’t yet know whether you’ll ever see them again. It’s often at this point businesses lose customers because of their perceived lack of interest (indifference) in the person who just gave them money. Converting a purchaser to the next ring in the circle takes more than just ringing up a sale…
- CUSTOMERS: Finally, if a purchaser has returned to your business and bought from you again (and again, etc.) you can now begin to think of them as a customer. These are people worth cultivating – they’re the lifeblood of every successful business. Until you get to this level of circle, you’re probably not making much, if any, profit from the relationships you have with your customers. In most businesses, all of the activities engaged in on the first three rings of the circle will cost more than the money taken in – and this is where far too many businesses spend most of their effort! The true measure of customer worth is their ‘lifetime value’ to your business…and this begins only after several purchases. A key to keeping customers – and, more importantly, moving them closer to the centre of your circle – is to make them very happy they’ve bought from you. Once customers begin to feel special, they will begin to move towards the centre of the circle of loyalty.
- SUPPORTER: Once you begin making your customers feel like they belong to a club where they expect and receive exceptional service, or are invited to exclusive events, they move still closer to the inner circle to become a member. They might be given cards which entitle them to extras such as ‘Members Only’ evenings where they get the first viewing of new products at specially-discounted prices, or simply a regular newsletter that keeps them informed of the range of products/services your business offers. This feeling of exclusivity helps to cement customer loyalty and move some of the better ones towards the inner circle.
- PROMOTERS: Near the inner circle of loyalty, you will find customers who are so pleased with your service that they actively market your business for you. They tell their friends about the quality of the products/services that you provide, and about the ways in which you go out of your way to look after them. They endorse your business and insist on coming back to you, again and again. And, they generally don’t worry nearly as much about price as do those people just stepped into the circle of loyalty.
- RAVING FAN: The inner circle is reserved for those truly special customers who not only market your business, but actively sell for you. They are better than any advertisement for your products or services and are much like a valued member of your team. You don’t need many of these to have a business that virtually ‘sells itself’. The good that Raving Fans can do for a business is priceless, so they need careful nurturing.
So, remember, the more customers you help reach the centre of the circle of loyalty, the more your business will benefit. Don’t be like so many other businesses, spending enormous amounts of time and money trying to gain the attention of suspects, attracting new prospects and purchasers – losing money all the while. Rather, become smarter by putting increased effort into winning repeat business from existing customers. By making some of them so happy that they take on the role of a ‘super sales and marketing team’. Customers in the inner 4 rings of the loyalty circle earn you money – look after them well.
What will you do next? Can we help?