Customer Loyalty Ladder

Posted in Marketing and Strategy Terms, Total Reads: 11565

Definition: Customer Loyalty Ladder

Customer Loyalty Ladder is a systematic way of classifying customers of an organization into five different categories depending upon the business level engagement of customers with the organization.

The five different categories under Customer Loyalty Ladder are:

1. Suspects:

They are the potential customers for an organization. They may be aware of the promotional campaigns of the organization but are currently doing no business with that organization.

2. Prospects:

They are the ones who have been impressed with the organization’s promotions and are in serious consideration of buying products of the organization.

The organization must treat them cordially and solve all of their doubts.

3. Customers:

They have bought products of the organization for the first time and are currently using them. The organization must extend them all possible after-sales assistance in order to pacify their concerns.

4. Clients:

They are doing business repetitively with the organization and are willing to foster the engagement in future.

5. Advocates:

They are not only doing repetitive business with an organization but are also recommending the organization to their own acquaintances.

They are the most valuable players and the organization must treat them royally with the highest priority.


The concept of Customer Loyalty Ladder comes under Relationship Marketing which deals with establishing long term relations with customers. It is said that the cost of attracting new customers is 4-6 times more than that of doing business with existing customers. Hence it is worth for any organization to keep its existing customers happy and satisfied in order to do a more profitable business. Loyalty Ladder thus helps an organization plan engagement strategy wisely so that the customers would be tempted to move up the ladder.


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