An Open Letter (and Question) For All B2B and B2C Marketers: How Well Do You Really Identify, Understand, and Leverage Customer Advocacy Behavior?

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A Little Background on Customer Behavior Research Frameworks and Models

It seems that there’s a model, or a framework, for just about everything that takes place in business these days. Organizations and management have been guided by evolving models for over 100 years. These models are used for corporate architecture effectiveness assessment,
overall business planning, decision-making guidance (such as SWOT analysis), determination of customer lifetime value, cultivating innovation (venture boards, cross-group solutions teams, thought leader networks, communities of practice, etc.), and financial resource allocation.

There have been models or theories for understanding, or endeavoring to understand, customer behavior and how decisions are made, dating back to Freud, Jung, and, classically, Abraham Maslow in the 1940s (Hierachy of Needs) and Herbert Simon in the mid-1950s (Utility Theory). Questions regarding how consumers choose which brands to use and which to ignore, which products and services to buy and which not to buy, have dominated the thinking of marketing and corporate executives as they attempt to find the right mix of communications media, positioning, and messaging for their wares.

Formal research on customer opinions has been going on since the 1950s. Much of it has had to do with customer perceptions of product/service quality and satisfaction, then engagement, and eventually loyalty and recommendation. For decades, data on these largely transactional attitudes and feelings was sufficient to provide companies with general insight and direction, and research models of customer behavior reflected the focus on perceived emotional and rational elements of value.

Research into consumer decision-making, likewise, has seen its share of frameworks and models over the past twenty years or so. Some deal with the rational and emotional elements of customer-perceived value, and some don’t consider this at all. All purport to provide levels of accountability in terms of identifying what drives customer loyalty and marketplace behavior. How well they actually accomplish this is another matter.

A Little History of Customer Satisfaction, Engagement and Retention Models vs. Customer Advocacy Behavior Models

Recently, I got involved in discussion (with the strategy director of a major corporation) about the differences between customer satisfaction, engagement, and retention measurement relative to customer advocacy behavior measurement. From her perspective, in working with a vendor which uses a customer loyalty model created in the early 1990’s, all these models and frameworks are the same. Obviously, they are not.

I’ve studied close to 30 frameworks and models of customer behavior from major research vendors and related organizations. None of them had identified, or helped companies operationalize, customer advocacy behavior (although some claimed what they were helping determine customer advocacy). Here are some key facts making customer advocacy an essential, core measure:

– By the early 1990s, essential control of brand and supplier selection had shifted away from companies and moved to consumers, a result of several pivotal, converging factors:

1) Growing Internet penetration and cell phone usage as communications enablers

2) Over-saturation of ‘push’ advertising and promotional messaging through traditional mass electronic and print media, and

3) Heightened public distrust in the honesty, objectivity, and authenticity of corporations.

– The resulting creation of a major, seismic change in the way businesses had to think about customers, and the nature of insight and information needed from them. Significantly, none of the models studied took these changes into consideration. Instead, like the model used by the strategy director I’d spoken with, they continued to view the customer from a ‘business as usual’ perspective, a world where the company controlled, or at least managed, customer decision-making rather than the other way around. These models and frameworks did not incorporate the customers’ ownership of company and brand selection, or what elements contributed to selection and loyalty behavior.

– Beginning around 2000, major consulting organizations began to recognize that these critical changes were likely to have a profound impact on businesses. Instead of relying solely on such historic measures as satisfaction, loyalty, engagement and recommendation, companies would need to identify and focus on something more contemporary, more actionable, and more predictive of key monetizing business outcomes, such as share of wallet. That ‘something’ was ultimately defined as customer advocacy, i.e., behavior driven by a strong bond with the preferred brand and active, voluntary online and offline word-of-mouth on behalf of that brand.

The consulting companies conducted many insightful advocacy studies, issuing statements such as:

“Advocacy is a deeply-rooted, emotional connection which relies on trusted, effective non-traditional communication and engagement channels.”

“Word-of-mouth is the primary factor behind 20 to 50% of all purchasing decisions. And its influence will probably grow…………..”

“Leading companies want to build strong bases of loyal profitable customers who are also advocates for the organization. Advocates spend more, remain customers longer, and refer family and friends, thus increasing the quality of the existing customer base and new acquisitions.”

“We predict that customer advocacy will be the new focus for business leaders. Customer advocacy will become the single most important initiative that cutting-edge, forward-thinking companies will adopt.”

Having identified the power of customer advocacy to influence the customer’s own behavior (known as self-perception) and the behavior of others, the next challenge was to create, and prove the effectiveness of, a state-of-the-art research metric, or framework, for measuring and leveraging it. We have done that, and defined our concept and approach in a 2010 CustomerThink article, which has been read by close to 9,000 marketers:

http://www.customerthink.com/article/marketing_case_customer_advocacy_measurement

Customer advocacy, the intersection of personal customer experience, brand favorability, future brand consideration, distribution of most recent brand purchases, and offline/online word-of-mouth influence, has indeed gone mainstream. We have operationalized customer advocacy, for clients around the world, have presented at major international customer-themed seminars and conferences, and have reported on the many marketing applications and values of customer advocacy in multiple CustomerThink articles and blogs, including:

http://www.customerthink.com/article/corporate_reputation_and_advocacy_linkage

http://www.customerthink.com/article/customer_advocacy_behavior_personal_brand_connection

http://www.customerthink.com/article/negative_word_of_mouth_customer_alienation_and_sabotage

http://www.customerthink.com/article/linking_employee_behavior_to_customer_loyalty_advocacy

A Little Summary: Defining Customer Advocacy Behavior and Its Marketing Value

As stated in a 2011 Peppers & Rogers white paper, “Cultivating Customer Advocates: More Than Satisfaction and Loyalty”: “The benefits of building advocacy can’t be ignored. Satisfaction and loyalty are important, but they’re old news. It’s a new dawn in customer experience strategy, where the customer controls over 50 percent of the brand message. Forward thinking companies will be the ones that identify and work with their customer advocates to genuinely build trust in the brand, the customer base, and the bottom line.”

In a recent CustomerThink blog about methods to measure and optimize customer loyalty behavior, Bob Thompson commented:

“…in my research of top performing companies I find that leaders are obsessed with asking and answering these questions:

– What do customers in our target markets really value?
– Which issues make our customers unhappy and cause them to leave?
– What pleases customers and causes them to recommend us to others?
– How can we turn customers into true advocates for our business?

If you can answer these questions and then pull the right loyalty levers, you’ll be on your way to building great customer relationships.” As a strategic stakeholder research consultant, I can easily agree with much of that perspective. And that is the advice, with a focus on identifying and leveraging customer advocacy, I’m passing along to all B2B and B2C marketers.

Michael Lowenstein, PhD CMC
Michael Lowenstein, PhD CMC, specializes in customer and employee experience research/strategy consulting, and brand, customer, and employee commitment and advocacy behavior research, consulting, and training. He has authored seven stakeholder-centric strategy books and 400+ articles, white papers and blogs. In 2018, he was named to CustomerThink's Hall of Fame.

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