The Customer Relationship Ladder

Shaun Smith over at The Perfect Customer Experience has a great post today in which he discusses Apple and Harley-Davidson as being Brands that have reached the Customer Advocate stage.

Advocacy at this level is rare and beyond the reach of most consumer companies let alone professional services firms. Yet, the principles hold true whatever the nature of your industry and customer base. The fact is that delighted customers have an affiliation for the brand that translates into bottom line growth.

So how do you create a level of customer satisfaction that is so strong that customers become your best sales people? The answer lies in creating a customer experience that is so distinctive and valuable that it goes beyond satisfaction. Jerry Gregoire CIO for Dell computers says “The customer experience is the next competitive battleground” Michael Bray Chief Executive Officer for Clifford Chance said this about customer experience “… equally relevant for the leaders of professional services firms looking to build ‘trusted advisor’ relationships with their key clients.” Jill Griffin, in her book ‘Customer Loyalty: How To Earn It, How To Keep It’ suggests a useful ladder of customer relationships which brings clarity to this issue.

Stage 1: Suspect. Suspects include everyone who might possibly buy your product or service. We “suspect” they might buy; we do not know enough yet to be sure.

Stage 2: Prospect. A prospect is someone who has a need for your product or service and has the ability to buy. Although a prospect has not yet purchased from you, he or she may have heard about you, read about you, or had someone recommend you to him or her.

Stage 3: Disqualified Prospect. These are prospects about whom you have learned enough to know that they are not the best fit for your products and services and so you may choose not to target them.

Stage 4: First-Time Customer. First-time customers are those who have purchased from you one time. They are customers of yours but are almost certainly still customers of your competitor as well.

Stage 5: Repeat Customer. They have purchased from you two or more times. They may have bought the same product twice or bought two different products or services on two or more occasions. They will buy from you but will also continue to give their business to competitors. In professional services you may be one of a number of firms on their panel.

Stage 6: Loyal Customer or Client. A loyal customer or client buys from you rather than anyone else. You have a strong, ongoing relationship that makes him or her resistant to the pull of the competition. For professional services firms this is where you begin to make the transition from being a supplier to trusted advisor. You are ‘top of mind’ and the first firm that a client calls when they need help.

Stage 7: Advocate. Like a client, an advocate buys everything you have to sell and purchases regularly. In addition, an advocate encourages others to buy from you. An advocate talks about you, does your marketing for you and brings customers to you. >p>Brands like Virgin, Apple and McKinsey all have advocates who are happy to be unpaid sales people for these companies. For professional services firms this is when you create a relationship for ‘life’. You are likely be the preferred supplier for this customer whichever company they happen to work for. You may have a seat at the planning table when they think about their longer term strategy but will certainly get advance notice when the client is thinking about a deal.

3 thoughts on “The Customer Relationship Ladder

  1. Hi Doug,

    Harley Davidson is a great example of a company with deep customer loyalty. One of the reasons they do is they invest in their current customers by devoting a large percentage of their marketing budget to customer retention (see my blog from a few weeks back for more info on that). Thanks for highlighting them!

  2. Why the term ‘suspect’? This has a negative connotation, no matter which way you look at it.

    It implies that the employer has some shady aspect. If we ‘suspect’ that they might be a supporter, the word ‘suspect’ still means something a bit illegal, some level of possible law infringement.

    Why not ‘probable’?

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