The relationship marketing ladder of loyalty developed by Payne, Christopher, Clark and Peck (1993). It is also featured in the book, Relationship Marketing, by Christopher, Payne, Ballantyne (2002).
This framework clearly identifies a number of stages of relationship building. The objective of relationship marketing is to move people up the ladder from prospect through to advocate and to maintain this position once reached.
At the foot of the ladder, the prospect or target market is what classical marketing has tended to focus on turning into a customer.
In relationship marketing the customer is someone who has bought only once, or occasionally.
The next step is the client – someone who does business with us on a regular basis but who does not have an strong attitude about the organisation.
With the conversion to supporter the strength of the relationship becomes apparent – these people like to buy from us and maybe recommend us to others – they become advocates for an organisation.
The final step is where the customer becomes a partner, and both parties work together to build the relationship and gain mutual benefit.
Of course, customers are not all equally profitable and worth the investment to move them up the ladder. In fact, many companies may choose to ‘deselect’ those that are unprofitable. Identification of various customer groupings is an important part of any relationship marketing strategy. For example, financial service companies may not want to maintain some groups of customers . Companies may choose to ‘deselect’ these types of customer groups. In some cases unprofitable customers are a significant group.
The Ladder of Loyalty model is covered in detail by Christopher, Payne & Ballantyne in their 2002 book Relationship Marketing: Creating Stakeholder Value – available here
Many CIM modules include the Ladder of Loyalty model due to its relevance and usefulness as a tool to understand competition. In particular the Level 3 Marketing Insights, Level 4 Marketing Impact, Level 6 Strategy and Planning and Level 6 Customer Journey Optimisation modules utilise the model with reference to it in the syllabus.
We have a detailed video explanation of the model available here, also including a potential variation for the social media dominated world we now live in.