What Is the Customer Loyalty Ladder and How to Use It to Grow Your Business

The customer loyalty ladder is a model that illustrates the stages customers go through, starting from first discovering your brand and progressing to becoming passionate advocates who actively promote it. By recognizing where each customer is on this ladder, you can apply targeted strategies to move them upward, increasing retention, repeat purchases, and referrals.

Not all customers are created equal. Some engage once and disappear, while others return again and again, bringing friends along. The difference lies in how well you guide them through the loyalty stages.

In this guide, we’ll break down each rung of the loyalty ladder, explain why it matters, and share practical strategies to help you move customers to the top. 

Let’s dive in!

What Is the Customer Loyalty Ladder?

The customer loyalty ladder is a step-by-step framework that outlines the progression of a customer’s relationship with your brand. It typically moves through the following stages: leads → prospects → customers → clients or members → advocates or raving fans. Each stage reflects a deeper level of trust, engagement, and emotional connection.

Terminology may differ between businesses, with some using labels like “suspects,” “shoppers,” or “brand ambassadors.” However, the core idea is the same: guide people upward from initial awareness to full loyalty. The ultimate goal is to strengthen relationships at every rung so customers not only buy from you repeatedly but also actively recommend you to others.

Why Customer Loyalty Ladder Matters

Loyal customers are one of the most valuable assets your business can have. They cost significantly less to retain than it does to acquire new customers, and they tend to spend more over time. Beyond that, loyal customers often refer friends and family, leave positive reviews, and naturally evolve into brand advocates who promote your business without being asked.

The customer loyalty ladder helps you understand exactly where each person is in their journey. By segmenting customers based on their position on the ladder, you can deliver the right message, incentive, or experience at the right time. This targeted approach ensures that every interaction moves customers closer to the top, increasing both their lifetime value and their impact on your brand’s growth.

7 Stages of the Customer Loyalty Ladder

Understanding the stages of the customer loyalty ladder helps you see exactly where your customers are in their journey and what actions will move them upward. Each rung represents a deeper level of engagement and commitment, and your strategy should adapt to match the needs of that stage. 

Below is a breakdown of the typical seven stages and how they contribute to building long-term loyalty:

1. Suspect

A suspect is someone in your target market who needs your product or service but may not yet know you exist. At this stage, there is no relationship or brand loyalty, and the focus is on getting noticed. Effective marketing is essential to create awareness, spark interest, and begin guiding them toward engagement.

2. Prospect

A prospect is someone who has shown interest by asking for more information or engaging with your marketing efforts. The focus here is on building trust and credibility. While brand loyalty is still minimal, the seeds of a relationship are being planted through consistent and valuable interactions.

3. Shopper

A shopper is a first-time buyer. Many businesses struggle to move beyond this stage, attracting only one-off purchases. At this point, loyalty and trust are low, and price often drives decisions. Without a strong follow-up strategy, these shoppers can easily turn to competitors.

4. Customer

A customer is someone who has purchased from you more than once. Repeat business signals growing trust and a shift away from purely price-based decisions. Transactions become faster, and you start to develop a predictable revenue stream. This is where long-term relationships begin to take shape.

5. Member

A member is actively engaged with your business, often through a loyalty program, subscription, or VIP tier. Airlines, for example, use rewards programs to keep customers coming back. At this stage, trust and loyalty are strong, purchase decisions are quicker, and price becomes less important. Members often talk positively about your brand, helping to bring in new prospects.

6. Advocate

An advocate actively promotes your brand, recommending it to friends, family, and their wider network. They share their positive experiences, acting as an unpaid marketing force. Advocates are deeply loyal, make faster purchase decisions, and care less about price, making them highly valuable to your business.

7. Raving Fan

A raving fan represents the highest level of trust and loyalty. They rarely question price, purchase quickly, and consistently spread the word about your brand. At this stage, customers act like unpaid salespeople, driving both revenue and reputation. These relationships are the most profitable and enduring in your business.

Strategies to Move Customers Up

Guiding customers from one stage of the loyalty ladder to the next requires a mix of strategy, personalization, and timing. Each rung presents its own challenges and opportunities, and the right approach can transform a casual browser into a loyal brand advocate. Many successful companies, including Starbucks and Apple, master this process by tailoring their offers, communications, and rewards to match the customer’s journey.

Below are proven strategies for each stage, along with real-world examples to inspire your own loyalty-building plan.

For Leads and Prospects

At this stage, you’re working with people who either don’t know your brand well or are just starting to explore it. The focus should be on building awareness, trust, and relevance.

• Content Marketing: Publish educational blog posts, engaging videos, and helpful guides that solve their problems or answer their questions. For example, HubSpot uses free resources and tools to bring leads into their ecosystem.
• Personalized Outreach: Leverage retargeting ads and personalized email sequences to keep your brand top of mind. If someone browses a specific product category, follow up with curated recommendations.
• Lead Magnets: Offer something valuable in exchange for contact information, such as free trials, templates, or discount codes. Grammarly excels here by letting prospects try a free version of their tool before upgrading.

For First-Time Buyers

Once someone makes a purchase, the goal is to make them feel confident in their choice and eager to buy again. This is where many brands lose customers if the post-purchase experience is weak.

• Onboarding Offers: Send a thank-you email with a special “second purchase” discount. Amazon often recommends complementary products immediately after checkout to increase follow-on purchases.
• Frictionless Experience: Ensure fast delivery, easy returns, and transparent communication. Zappos built its reputation on free, no-hassle returns, which made customers more likely to shop again.
• Wishlist & Reminders: If a shopper added items to a wishlist but didn’t buy, follow up with reminders or limited-time offers. Fashion retailers like ASOS use this to convert hesitant buyers into repeat customers.

For Members

Members are repeat customers who engage regularly and may be part of your loyalty program. At this stage, loyalty is forming but needs reinforcement through exclusivity and reward.

• Tiered VIP Programs: Create different reward levels where benefits grow as customers spend more. Sephora’s Beauty Insider program is a gold standard, offering points, birthday gifts, and early access to sales.
• Points for Engagement: Reward not just purchases but also actions like leaving reviews, sharing content, or attending events. Starbucks Rewards lets customers earn stars for multiple types of engagement, keeping them hooked.
• Exclusive Perks: Offer early access to new products, members-only discounts, or surprise gifts. These benefits make members feel valued and less likely to switch to competitors.

For Advocates

Advocates are your unpaid marketing team — customers who love your brand enough to promote it without prompting. The key here is to recognize and amplify their efforts.

• Referral Rewards: Offer incentives for referring friends, such as store credit or free products. Dropbox famously grew its user base by offering extra storage to both the referrer and the referred user.
• User-Generated Content (UGC) Campaigns: Encourage customers to share photos, reviews, and testimonials. GoPro thrives on UGC, with customers posting action shots that double as brand marketing.
• Recognition and Community: Feature advocates on your social media channels, invite them to VIP events, or give them insider previews. LEGO Ideas takes this to another level by letting fans submit product concepts, fostering deep emotional investment.

Growave in Action: Loyalty Ladder Features

Growave offers a full suite of tools that make it easier to move customers up every stage of the loyalty ladder. By combining personalization, rewards, and engagement, Shopify merchants can turn casual browsers into loyal advocates.

Integration with Klaviyo for Segmentation

Easily connect Growave with Klaviyo to segment your audience based on purchase history, engagement, and behavior. This makes it simple to reactivate inactive prospects with targeted campaigns that bring them back into the buying cycle.

VIP Tiers and Milestone-Based Loyalty Upgrades

Reward customers for their continued engagement by offering tiered loyalty programs. Unlock better perks as they spend more or reach specific milestones, motivating them to keep climbing the loyalty ladder.

Referral, Reviews, Wishlists, UGC, and Real-Time Analytics

Encourage advocacy with referral programs that reward customers for bringing in friends and family. Collect and showcase authentic reviews, enable shoppers to save products to wishlists, and run user-generated content campaigns to build trust. With real-time analytics, you can track performance and adjust strategies for maximum impact.

Conclusion

The customer loyalty ladder provides a clear roadmap for turning casual leads into dedicated advocates. By understanding each stage, from initial awareness to passionate promotion, you can create targeted strategies that strengthen relationships and keep customers moving upward.

Investing in loyalty is not just about keeping customers happy. It drives retention, generates valuable referrals, and significantly increases customer lifetime value, all of which contribute to sustainable business growth.

Learn how Growave’s loyalty ladder tools can help your store climb to the top. Book a demo today and start building stronger, longer-lasting customer relationships.