Customer loyalty is a positive perception of the company and its products. The loyalty ladder is the structural model that implies the different levels of customer engagement in the selling process of a company’s products (Gerami & Vahid Yazdanian, 2018). Usually, the researchers define five levels of customer loyalty: suspects, prospects, customers, clients, and advocates (Gerami & Vahid Yazdanian, 2018). The loyalty ladder is an efficient tool to establish long-term relationships with clients. Different companies apply various marketing strategies to move customers from one level of the ladder to another.
A loyal customer predominantly buys goods and services from only one brand, not paying attention to its competitors’ offers. Such a customer is the main driving force of the business, in the long run, helping to build a positive image of the company and advertising it for free in his inner circle. Therefore, creating a loyal customer base and assessing customer loyalty is a top priority for a company that plans to remain in demand on the market for a long time.
In today’s e-business, the loyalty ladder is exceptionally vital in attracting customers online. The e-marketing strategies allow more advanced methods to build efficient loyalty programs. For the analysis of the practical appliance of the loyalty ladder, two brands of organic cosmetics were chosen: Pacifica and Annmarie. Both retailers provide online opportunities and loyalty programs for customers. Considering their activities from the perspective of customer loyalty, the brands’ programs aim at different ladder levels. The first online brand, Pacifica, offers a digital gift card ( Digital gift card , n.d.). A gift card of over 50 dollars in total is beneficial for the customers due to the random gift of over 75 dollars ( Digital gift card , n.d.). Thus, the card attracts new customers and benefits the current clients. Moreover, the cards have a thematic design relevant to many celebrations.
The marketing strategy used by the brand aims at the recurrent buying of the customers. The program addresses the prospect’s and clients’ levels from the loyalty ladder perspective. However, it fails to establish the advocates’ relationships with the clients. Considering the variability of the brand, which can be found online, the strategy is poor in terms of long-time loyalty. The customer is not directly involved in the brand. Thereby, the chances of choosing other brands are higher. Though considering the mentioned ladder levels, the program is successful.
The second example relevant to the analysis is Annmarie cosmetics. The company created the Wild & Beautiful Collective loyalty program to move the customer from the client’s level to the advocates ( Join the Wild & Beautiful Collective , n. d.). The community created for regular customers allows the company to develop its brand by providing discounts and point programs. The constant contact with other clients and creators of the brand empowers the higher level of engagement. As a result, clients are more focused on one brand, which minimizes the risk of competitors’ victory. This approach is highly relevant for e-commerce, enhancing loyalty. The program is beneficial for both the brand and customers due to paid subscriptions and various privileges. However, Annmarie’s strategy fails at the level of attracting new customers. Even though the profound base of loyal customers and advocates is established, broadening the brand’s potential is also vital for future development.
Therefore, both brands provide loyalty programs based on their current needs. They succeed on one level while failing at another. Addressing all the levels of the ladder would be the perfect strategy for both retailers. However, brands promote programs relevant to the current budget and opportunities. Annmarie’s approach is more efficient from a long-term perspective. The Pacifica’s one is beneficial in terms of broadening the client base.