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THE LOYALTY LADDER
March 29, 2018 by Pareto Systems
We want to pass along what we consider to be the showpiece of client-centered marketing. It is at the heart of getting referrals and of building a great business: the loyalty ladder.
The loyalty ladder has five rungs and everyone in the marketplace sits on one of those five rungs. The bottom rung is for suspects and the top rung is for advocates.
Successful financial advisors turn suspects into advocates.
1ST RUNG: SUSPECTS
The bottom rung of the ladder is for suspects, and most of the population consists of suspects. Will a business owner or professional get a good return on his or her investment of time and money marketing to suspects? Of course not. However, we still see people who spend time marketing to them, because they haven’t figured out the differences between suspects and prospects.
2ND RUNG: PROSPECTS
Suspects have no particular interest in your services.Prospects, on the other hand, are motivated to seek you out; they will call you. Your marketing efforts should be designed to attract prospects who are already interested in your services; you are trying to make your phone ring with inbound calls from predisposed prospects. We are not the biggest fan of cold calling, so we suggest you engage in activities that will make your phone ring instead. This miscalled the Law of Attraction.
You are trying to attract new clients, not chase them.
People are led, not pushed, into taking action.
3RD RUNG: CUSTOMERS
Once you have identified your prospects, you want to turn them into customers. You can do this by implementing consistent and predictable process for getting to know each prospect’s needs.
4TH RUNG: CLIENTS
There is a huge difference between customers and clients. Customers place only some of their business with you. Clients work exclusively with you.
Don’t stop at gaining a customer. You have a responsibility to your customer and to yourself to convey your full array of offerings so that you can put all the pieces of the puzzle together for them. You can’t wait for your customers to volunteer information about all of their needs. It might not occur to them that you could handle all of their affairs.
One of our favorite questions for an established professional is this: You’ve got 500 clients, but how many of them are completely and exclusively yours?
More often than not, we find that the respondent has opportunity leakage in his or her business. Many have a number of valuable customers they could easily convert into clients.
Yet they become focused on sales and transactions, and do not maximize the potential of their current customers.
This transaction-driven approach creates extensive opportunity leakage.
We had a rather heated debate about this with someone not long ago. He was having a tough time letting go of his old habits. He had just completed a big sale and was bragging about it to us. However, he was becoming increasingly agitated that we weren’t getting excited for him.
He eventually said, Don’t you get it? This is huge! To which we replied, If all you are going to do is focus on immediate gain, you are trading your time for money. It’s going to be anti-climactic because you aren’t building a business that way. It’s not the short-term profits you should be focusing on. The relationship you have with that client will last long after you’ve spent that money, no matter how much it is.
It’s the commitment of that person you should be focusing on. It’s the lifetime value of that relationship that will really be of value. If that client stays with you forever, gives you every cent he has as his life unfolds, and brags about you to two or three people every year, that’s what should get you excited.
5TH RUNG: ADVOCATES
Clients are not the top of the loyalty ladder. The value and durability of your business have virtually nothing to do with how many clients you have; it has everything to do with how many advocates you have. Advocates are fiercely loyal clients that empower you and that promote your services to their family, friends and associates. All of you have at least a couple of advocates in your inner circle of clients. We have one friend who calls them apostles and another who calls them ambassadors.
Our question is this: What would happen to your business if you had 200 advocates?
You’d be on the verge of a breakthrough. Advocates will identify prospects for you, and will help you to quickly convert them into clients and advocates. Your practice will become self-sustaining, and you will be able to spend less time finding new customers, and more time working with your best advocates.