The Customer Loyalty Ladder in Marketing for Vape Shops
Estimated 0 min read
A customer loyalty program will help you retain customers, boost your brand loyalty and become more competitive in the booming vape industry. But maybe you are not sure how to move your vape customers up the loyalty ladder?
Keep reading, and we'll tell you all about it here. Let's begin by defining the customer loyalty ladder in marketing.
TABLE OF CONTENTS
What is a Customer Loyalty Ladder?
Why is Customer Loyalty Important?
Customer Loyalty Ladder Theory
Expectancy Theory
Instant Gratification Theory
The Goal Gradient Effect
Appeal to the Heart, not the Head Theory
The Desire to Belong
The Five Stages of the Customer Loyalty Ladder
How to Move Customers Up the Customer Loyalty Marketing Ladder
Customer Loyalty Ladder Examples
Conclusion
____________________________________________________________________________
What is Customer Loyalty Ladder?
A customer loyalty ladder is a framework that categorizes customers based on their level of engagement or loyalty to a business. The framework helps your business understand how loyal your customers are to your brand. It also enables you to approximate how much more commitment you can cultivate in your customers to turn them into fans.
Why is Customer Loyalty Important?
Your customers' loyalty is their willingness to interact with your brand or buy from you repeatedly. Therefore, your loyal customers will associate favorable experiences with your brand, increasing the likelihood of the customers making repeat purchases.
Your vape business may have only 20% loyal customers, but they may provide 80% of your revenue. Here are some reasons why customer loyalty is essential:
1. Drive Repeat Purchases
Your loyal customers may have a favorite vape product they buy on an ongoing basis. Going by the favorable past experiences they've had with your brand, the customers will be more ready to try your new products. Because your loyal customers are significant in driving repeat sales, you must retain them.
2. Boost Revenue
Customers who've grown to trust your brand are likely to buy in larger quantities than first-time customers. As stated earlier, your loyal customers contribute the most significant portion of your revenue.
3. Brand Advocates
Loyal customers willingly recommend your brand to their peers. So if they hear any negative comment or see a negative review of your brand, they're likely to counter it with a positive one or narrate their favorable experiences.
4. Keeping You Ahead of Competition
Whenever your customers spend cash with your brand, they deny your competitor the opportunity to beat you in the game and give you a chance to be better than your competitors.
5. Gain Helpful Feedback
Your loyal customers are happy when you succeed. They willingly support your efforts and are ready to give their input to see you succeed.
Customer Loyalty Ladder Theory
Customers make buying decisions based on emotions and impulse or after thoughtful considerations. Customer loyalty borrows heavily from psychologists and is impacted by the following theories:
Expectancy Theory
Customers' buying behaviors are influenced by their expectations or the value they attach to a buying decision. You can use this theory to make customers sign up for your loyalty program by making them see the value in accumulating loyalty points. Brands also use this theory in bundling products, such as giving a gift hamper for customers attending a webinar.
Instant Gratification Theory
People shop impulsively to get instant gratification. If they want something instantly, offer it to them. If you delay, they may reconsider their needs for the product and fail to purchase it.
Instant gratification is more evident today as most customers want everything instantly. Brands may use this theory to keep the customers coming back for more by giving incentives for those who return with a set time, like a week.
The Goal Gradient Effect
According to this theory, you will accelerate your behavior when you see you are about to reach your goal. If your vape customers feel they are nearly hitting the points, they require to earn a gift. Therefore, they will make more purchases to raise the deficit points and get the reward.
Appeal to the Heart, not the Head Theory
When your customers become emotionally connected with your brand, they may make twice as many purchases as your satisfied customers. Get involved in your vape customers' aspirations to learn how to align them to your loyalty program and make it more appealing.
The Desire to Belong
Humans hold kinship highly and crave to be a part of something bigger. Make your vape customers feel part of a large community of vapers, and they'll stick with you as it gives them a sense of belonging.
Customers will remain loyal when they feel like they are supporting what belongs to one of them. They'll also stick with you if they think your business is benefitting a larger community.
The Five Stages of the Customer Loyalty Ladder
The loyalty ladder has five levels. These are prospects, clients, customers, supporters, and advocates. Let's explore them here:
1. Prospects
Prospects may be potential customers who have interacted with your promotional messages and developed an interest in your products. They may be considering purchasing from you. Treat them warmly and help them eliminate any objections.
2. Customers
This category consists of first-time or sporadic buyers currently using your products. Extend after-sales assistance to appease their concerns. Appease them with discounts and your loyalty program to make them repeat customers.
3. Clients
These are your repeat customers who may not live without the product they purchase from you.
4. Supporters
Besides being a repeat customer, this category consists of customers emotionally attached to your brand. Occasionally, they may purchase to support your brand but not because they need your products. Though they have high expectations of your brand, a few flaws will not easily disgruntle them.
5. Advocates
This group of customers proactively markets your brand at every opportunity. They also defend your brand whenever anyone talks negatively about it.
How to Move Customers Up the Customer Loyalty Marketing Ladder
Give a Good User Experience
Ensure your vape customers feel they made the right decision to purchase from you. You may have high-quality products, but the user experience will determine if your customers stick with you or leave.
Create Personalized Experiences
Understand the needs of your customers to create experiences that will appeal to them. Personalized experiences make your vape customers feel more appreciated.
Create Customer Migration Goals
Offer incentives for your customers to move up the loyalty marketing ladder. The incentives should be time-bound, with a reward for customers who achieve a milestone with a set timeline. Set reasonable timelines to avoid making the customers feel like you're pushing them to purchase from you.
Choose Appropriate Rewards
Each category should have a unique reward and incentive message. Keep your customers updated about your products and incentives. The aim of having a loyalty program should be to encourage customers to make more purchases and reward those who do so.
Customer Loyalty Ladder Examples
Starbucks
Starbucks' loyalty ladder relies on an incredible customer experience to succeed. It allows customers to pay for future purchases in installments and accumulate points they can redeem for free drinks.
Toms
For every pair of shoes you purchase from Toms, they donate a pair to charity. By making customers feel a part of a community of donors, this approach helps the organization increase its sales and contribute about 86 million shoes.
Amazon Prime
This subscription loyalty program offers customers free two-day streaming capabilities and shipping days during certain times of the year. In addition, prime members buy goods worth $1,300 per year compared to the non-prime members who spend an average of $700 each year.
Conclusion
Customer loyalty helps you get repeat purchases and increased revenue for your vape shop. You also get brand advocates that give you a competitive edge. Once you identify where a customer lies on the loyalty ladder, you’ll be able to use the appropriate strategies to move them up the ladder.
Some of the strategies aim to retain loyal, high-value customers using a good, personalized user experience and create customer migration goals. You should always ensure you choose appropriate rewards for customers in each rung.
