Marketing is no doubt one of the main areas that organisations have to cater to, as it affects a large percentage of brand recognition and sales. It’s no wonder then that small and medium scale businesses allocate between 7-10% of their total annual revenue for marketing. With the introduction of high quality customer advocacy programs, businesses can reduce marketing costs by up to 30%, benefiting the organisation and reducing the burden of marketing on the marketing department of the organisation. In today’s article, we shall discuss Customer Advocacy, how to achieve it, its impact on business, and the role of customer reps in the development and dispensation of high quality customer advocacy programs.
From a service provider’s perspective, customer advocacy can be defined as the act of prioritising customer’s needs, by working on innovative solutions to deliver optimum quality of product and services to users. For businesses who adopt this mindset in their delivery of service, one of the benefits they enjoy is the high level of customer’s interest in supporting the business beyond patronage. This often contributes to the customer’s practice of actively supporting and promoting their preferred brand, attaining a level of loyalty that exceeds mere satisfaction. This fuel is a strong desire born out of loyalty, resulting in the total willingness to recommend the brand to others. And that is why organisations develop several customer advocacy programs, as the benefits of this culture makes satisfied customers become brand ambassadors, invariably impacting marketing budgets, while improving marketing output.
Developing impactful advocacy programs requires meticulous research and planning to ensure its incentives attract the target audience of the program. For instance, an example of such advocacy programs is the utilisation of VIP referral programs. Such events target users who have the ability to onboard new members into their community, hence, incentive must align with rewards tangible to the target audience.
To develop such highly effective customer advocacy programs, there are certain steps and conditions that the company must consider and satisfy.
As with every customer oriented activity, the first step to take when developing a customer advocacy program is to study and understand the customers. Businesses need to possess insights into their customer base, their preferences, and motivations. Utilising community surveys, polls, feedback mechanisms, and other analytical techniques helps businesses to comprehensively understand their audience and their needs, providing clarity on how to design advocacy programs that will benefit the users.
These surveys and analytics also help to define the objectives of the advocacy programs clearly. Clearly outlining the goals and objectives of your customer advocacy program makes it easier for community members to know which programs to involve themselves in, and know what incentives to expect from it. Whether the focus is on increasing referrals, or generating positive reviews, having well-defined goals will steer the organisation’s efforts in the right direction.
Setting standards to analyse advocate personalities plays an important role in helping brands identify the characteristics of their ideal advocates. Factors such as loyalty, engagement, and the ability to influence others are to be considered when targeting the right customers for participation in the advocacy program.
Customer feedback must also be leveraged to achieve desirable results from user advocacy programs. Actively seeking feedback from customers gives brands insight into how to enhance their advocacy programs, its incentives, products, as well as services. This is critical as it infuses the show of value along with the dividends of improved performance to strengthen relationships with customers.
And with active customer feedback considerations, establishing online communities becomes easier. When organisations make it necessary to engage their customers often, they involuntarily create online forums/communities where customers can connect, share experiences, and support each other. This influences a sense of belonging, encouraging communal advocacy and community building.
Recognizing and celebrating outstanding advocates also influences the willingness of other members to participate, thereby improving the effects of the program. Organisations have to acknowledge and celebrate the efforts of their advocates by featuring them in marketing materials, showcasing their success stories, and providing them with exclusive recognition. This recognition reinforces their loyalty, and sets them as positive examples for others to follow.
Monitoring, measurement, adaptation and evolution are also key pillars that help uphold the effectiveness of customer advocacy programs. Tracking program performance, reach, and viability helps brands stay on cue with their marketing, identifying aspects of the program to evolve, especially based on feedback and changing customer dynamics. Regularly assessing the program's effectiveness and conducting adjustments to it ensures its continued success as a catalyst for brand growth and improved user retention rate.
A 5% increase in user retention can result in a 95% increase in profits as they would come from repeat customers. Customer advocacy programs are geared towards ensuring customers are engaged to become active community members. This is why implementing effective customer advocacy programs have significant impacts on both customer retention and the overall growth of a business. Some of the major impacts of this strategy includes:
1. Enhanced Customer Loyalty and Increased Customer Lifetime Value (CLV).
According to Marketing Metrics, the probability of selling to an existing customer is 60-70%, while the probability of selling to a new prospect is 5-20%. With customer advocacy programs, a sense of loyalty is fostered in satisfied customers, making them more likely to stay with the brand, as it values and rewards their support. This leads to increased customer retention, as satisfied customers who become advocates tend to make repeat purchases, contributing to a higher customer lifetime value. This long-term value is crucial for sustained business growth, and the overall progress of the company.
2. Positive Online and Offline Reviews/Ratings.
Nielsen reports that 92% of customers trust recommendations from friends and families over other forms of advertising. Satisfactory advocacy helps businesses grow their users into a community willing to be ambassadors for the brand. According to a study by McKinsey, word of mouth is the primary factor behind 20-50% of all purchasing decisions. With a range of possible review mediums, from word of mouth referrals, to online review feedback, and other forms of user activities, existing users can help attract new customers to develop the brands they love. Such advocacy from the existing community not only also influences potential customers, but also enhances the online reputation of the business, contributing to its growth.
3. Cost-Effective Acquisition.
Customer advocacy programs, particularly referral initiatives, often lead to more cost-effective customer acquisition by 25%. Leveraging existing satisfied customers to bring in new business is an efficient and economical medium that also contributes to a strengthened brand image, as new users are more likely to believe the reviews of preexisting customers over obvious marketing adverts and campaigns.
4. Competitive Differentiation in Community Building.
Businesses with strong customer advocacy programs gain a competitive edge over competitors, improving community building by 30%. Satisfied customers who actively promote the brand sets it apart in the market and influences the choices of new consumers, playing the critical brand advocacy role that contributes to growth. Customer advocacy programs often involve creating communities around the brand, while the community fosters a sense of belonging and strengthens customer relationships within the community, leading to long-term retention and growth.
In summary, customer advocacy programs play a vital role in attracting new customers, retaining existing ones, and driving business growth by leveraging the positive experiences and recommendations of satisfied customers.
Support teams play a crucial role in maintaining the quality of advocacy programs by directly engaging with customers, gaining insights into their needs, concerns, and preferences. Their feedback collection efforts provide valuable information for refining and improving advocacy initiatives. Being on the frontline, support teams can identify potential advocates among satisfied customers who exhibit strong loyalty and are likely to positively represent the brand. Leveraging insights from customer interactions, support teams contribute to personalising advocacy programs, tailoring initiatives to individual preferences. Their effective communication skills are vital for conveying the benefits of advocacy programs, encouraging participation, and maintaining ongoing engagement. The prompt resolution of issues by support teams is essential for overall customer satisfaction, ensuring that satisfied customers are more likely to become advocates.
Support teams often witness success stories from customer interactions, and these stories can be shared as powerful examples within advocacy programs. Actively promoting advocacy programs, support teams highlight the benefits and incentives, encouraging customer participation. Their adaptability to changing customer needs is valuable when adjusting advocacy programs to align with evolving preferences and market dynamics. Contributing to a culture of continuous improvement, support teams consistently evaluate and refine customer interactions, providing valuable insights that enhance the overall quality and effectiveness of advocacy programs. In summary, support teams serve as essential pillars, utilising their customer-centric approach, feedback collection, and effective communication skills to uphold and improve the quality of advocacy initiatives.
Summarily, customer advocacy strategies are instrumental in driving brand growth by harnessing the support of satisfied customers. These strategies, including referral programs and testimonials, create a community of loyal advocates who actively endorse the brand. The impact is profound, with increased customer retention, higher lifetime values, and cost-effective acquisition of new customers. Positive online reviews and social proof generated through customer advocacy contribute to a favourable brand image, setting the business apart in a competitive landscape. These strategies not only strengthen customer relationships but also provide valuable feedback for continuous improvement, making them essential for sustained success and growth.
In essence, customer advocacy strategies play a pivotal role in leveraging satisfied customers as influential advocates. This approach positively influences potential buyers, establishes a competitive advantage, and contributes to increased revenue and a positive brand reputation. The collaborative efforts of businesses and their advocates create a dynamic ecosystem that fosters loyalty, trust, and long-term success.
