As The Old Expression Goes, “You Can Put Lipstick On A Pig, But…..

….it’s still a pig.” The saying has made appearances in many situations, including sales, politics, financial manipulation, scientific and technical invention, and so on. In this blog, I’m applying it to a specific area of marketing activity: paying, or directly rewarding, customers to make referrals, recommendations and endorsements and relabeling it as customer advocacy behavior.

Let’s be clear about this. There’s nothing wrong with remunerating customers, or other stakeholders, through the offering of gifts, points, cash and other incentives so that they will positively endorse a company’s products or services. Whether by specialty agencies who organize such programs, or from an organization’s own grass-roots initiatives, companies will generally get some financial lift from paid customer recommendations and endorsements – at least on a tactical basis. And, if it is ever leaked, or otherwise communicated, that such a program is in effect, don’t be surprised at the amount of negative blowback and viral activity this will cause.

Those positives and negatives said, paying customers for referrals, recommendations, and endorsements is just that – compensation or incentive for taking a brand-related promotional action that they wouldn’t otherwise do. This is not advocacy. Customer advocacy is predominantly voluntary, not compensated or incentivized; and it should not be confused with, or compared to, funded product or service championing. This is nicely in explained in a 2013 Huffington Post blog by Jure Klepic: http://www.huffingtonpost.com/jure-klepic/advocates-or-influencers_b_3817056.html As Klepic states, and as is generally accepted as a way to define an advocate: “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.”

Where does advocacy come from, and how is it different from compensated customer endorsement programs? By the early 1990’s, 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 and authenticity of corporations.

These represented major, seismic changes in the way businesses regarded customers, and also in the way customers communicated, and received communication, about products and services.

Beginning around 1995-2000, major consulting organizations began to recognize that these critical changes were likely to have 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 connection with the preferred brand and active, reduced consideration set, and voluntary online and offline word-of-mouth on behalf of that brand.

Major 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.”

Only word-of-mouth and positive brand impression are actually needed for advocating behavior to occur; and word-of-mouth is at least as powerful a force as recommendation.

So, true advocacy is when customers select a single supplier from among all those they might consider, giving that supplier the highest share of spend possible, and informally (without any form of compensation) telling others about how positive the relationship is and how much value and benefit they derive from it. Advocacy incorporates opinions formed from customers’ transactional and other contact experiences with a brand or supplier, but it is built on a foundation of strategic, positive purchase and communication behavior.

The level of behavior represented by adovcacy results when the customer is favorable toward a supplier, and not only purchases consistently from that supplier over others, but also actively (and objectively) tells peers about the brand. And, simply, this accepted definition of advocacy is very different from the “lipstick on a pig” version where customers (and employees) are paid or otherwise directly rewarded for their brand support.