Chris Maloney, CMO of online brokerage Scottrade, recently made these comments about customer advocacy:
“Financial services customers who make referrals tend to be worth 50 percent more than a typical customer, and a new referred customer is worth almost twice as much as a customer coming from other channels. Also, advocates become more valuable and more loyal simply by making a referral, because they put their reputation on the line.”
This speaks to the tremendous value of customers who are willing to make recommendations—call it what you want—word of mouth, advocacy or evangelism.
But, what makes one customer an active and effective advocate and an other just a customer?
The nature of the customer experience! Customers always have an experience but they don’t always become advocates, in fact, some become critics. The key is getting the customer emotionally engaged in the experience. Without engagement, customers are, at best, indifferent, and indifferent customers don’t make recommendations.
Through engagement customers derive greater meaning and value from the experience and as a consequence they have something to passionately recommend. In addition, since they can credibly put the experience into a context that is meaningful to their friends, they are very effective.
For more insight into customer engagement download my recent article: Why Customer Engagement Pays Dividends.