Recently, a CustomerThink blogger wrote a piece in which he equated compensated customer endorsement and influence for a brand with customer advocacy. As someone who has been researching, and consulting in, true customer advocacy and bonding for over a decade, this got my attention, in addition to creating some annoyance.
In my response, which admittedly was pretty direct, it felt like what he was describing amounted to very little more than paying individuals to endorse or influence. This is a very tired marketing ploy; and I sent him to a 2013 Huffington Post article on customer advocacy where the author stated: “Brand marketers love to find people who are so passionate about a product or service that they promote it solely for the sake of helping others, usually without any type of incentive.” In other words, quite unlike remunerated endorsement, advocacy is voluntary and elective on the customer’s part. So, it should be noted, is customer bonding, which represents even higher brand involvement.
In this blog, some of the important differences, and real advantages, associated with customer advocacy and bonding will be addressed.
It’s been proven that paid, i.e. compensated, endorsement programs, which are in fairly active use (and have been for about a decade), can create a certain level of tactical influence. So can customer recommendation, as the creators and marketers of the “one number” metric like to remind the world, over and over. That said, customer advocacy and bonding, which are often both more strategic and more effective at influencing the behavior of others, don’t come with the array of impediments and challenges associated with endorsement and recommendation.
For example, research has found that recommendation and endorsement are not universally applicable, i.e. to virtually all industries and purchase situations. Certainly, results from asking about recommendation cannot be safely applied to other areas of marketing activity, such as branding and positioning, product and service assessment, or loyalty program development and refinement. Further, recommendation has been shown to give little guidance around customer life-cycle issues: targeted customer prospecting and acquisition, customer risk mitigation, and recovery of financially attractive former customers.
Though the idea of recommendation is intuitively powerful, and is held up by its supporters as both the measurement tool and the means for understanding customer behavior, numerous studies have shown that it should not be considered a stand-alone barometer for the future health of a brand or an enterprise. Thus, it has real marketing decision-making support limitations. It provides limited direction about what to do, or how to do it.
A criticism voiced by many analysts is that a recommendation score reveals nothing about a company’s product or service line, innovations and new developments, pricing, or other key elements of value; nor, as noted above does it offer guidance to companies on customer life stage-related issues. If for example, a company’s products had high recommendation and endorsement scores but also outlandishly high prices, very few would buy them; and the high prices would attract few new customers and may also cause extensive losses. As a result, and closely related to the lack of detailed decision-making guidance represented by recommendation and endorsement scores, marketers can honestly ask “So what?”
Recommendations and endorsements are useful goals, but are they the main thing? Most customer management research analysts and practitioners argue that, while recommendation and referral are important (as are an unwillingness to recommend or refer), much more needs to be understood about the elements customer decision and behavior dynamics.
And, as stated at the outset, it should be recognized and understood that it’s possible, for example, to incentivize customers, and they will refer, once compensated and rewarded to do so. If companies, in effect, buy referral and recommendation—and it can easily be done through ‘viral marketing’ agencies specifically organized to create buzz through referral—what happens to the value of the metric? It’s very, very (very) strongly compromised, built on a shaky foundation.. Voluntary customer advocacy and bonding have none of these limitations.
Customer advocacy can, in part, be defined as the degree of kinship with, favorability toward, and trust of, brands; but, principally, advocacy identifies the monetizing downstream customer behavioral impact of informal communication, by individuals on a voluntary, active, peer-to-peer basis (and as it influences their own downstream behavior, i.e. the self-perception effect), as a result of personal experiences. Inclusion of the ‘personal experiences’ qualifier is absolutely critical, because it represents a depth of individual knowledge, engagement and surety unidentified in the one-number recommendation approach.
Consulting firms such as McKinsey have determined that word-of-mouth drives 20% to 50%, or more, of customer decision-making, so it is extremely important; and it has been proven to be every bit as leveraging as recommendation. Again, recommendation isn’t word-of-mouth, nor is it advocacy behavior. It should be added that, just as recommendation isn’t word of mouth or advocacy, neither is it customer loyalty (and can’t give management much guidance for creating loyalty or pinpointing motivations for individual purchase choices); however, much of true customer loyalty behavior can be identified in drivers of customer advocacy.
And bonding behavior? Well, begin with advocacy, layer in true brand passion and personal commitment, and you have even more polar behavior. Adding deep emotional attachment, harmony (brand fit with personal values and lifestyle), and affiliations (connections through multiple communication touchpoints) incrementally influences brand importance and behavior. Result: Linking advocacy and brand passion produces powerful customer action in the form of loyalty behaviors. Companies that succeed in activating bonded customers:
- Are hyper-responsive and anticipate needs
- Build trust through customer-centric culture
- Decommoditize value
- Empower employees to be proactive, in the best interests of their customers
- Understand, and practice, humanity in stakeholder relationships
Advocacy and bonding, in sum, enable any enterprise to create trends, not follow them.
Thank You Michael.
Informative & useful for me.