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Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

Getting your customers to work for you

Category : Business

The rise of social media tools and platforms has created a new type of online user – the connected user. What do connected users do? They share their thoughts and opinions to followers, friends, and other connections who value their opinion. So when they post, a lot of people listen. So what if they are posting about your product or customer experience? Well if it is a good experience or opinion this may well influence their followers to engage with your product – something you could be taking advantage of – welcome to the world of Customer Advocacy.

 

“Recommendations from friends and family are now trusted by 92% of consumers, up 18% since 2007, compared to just 47% who trust more traditional forms of advertising such as television and newspaper ads” http://www.britopian.com/2012/09/18/the-truth-about-influencers-and-brand-advocacy/

“70.7% of UK consumers would tell family and friends about a positive experience, while 74.0% would do the same after a negative experience” http://www.bandt.com.au/features/customer-care-evolution

What are customer advocates?

It is certainly true that these customers are influencers and there are social analytics tools available to identify who they are. But what about advocates?

“Brand Advocates are highly-satisfied customers who pro-actively recommend their favourite brands and products online without being paid to do so.” Rob Fuggetta, founder Zuberance

A study published in the Harvard Business Review entitled “How Valuable is Word of Mouth?” found that getting “champion” customers to refer others delivered at least a 12 x ROI for companies in financial services and telecommunications industries, more than 2 x ROI of other marketing programs in these industries.

So Customer Advocacy marketing is the approach to actually market your brand or product, leading to measurable benefits such as increased sales or reduced costs.

What are the benefits?

The Harvard Business Review analysis showed that customer advocacy can definitely deliver real business benefit with measurable ROI when done well.  A sample of examples

- Among the many things that Giffgaff does differently is to use its passionate user base in marketing. Giffgaff membershave been spreading the word about the company, and making commercials—in fact, so far, Giffgaff members have produced and posted 146 videos online—generating over 500,000 views to date. http://www.lithium.com/pdfs/casestudies/Lithium-giffgaff-Case-Study.pdf

- Symantec doubled its star ratings and increased sales 200% on Amazon.com in one quarter after energizing its Advocates

- Ooma, a VoIP provider, cut customer acquisition costs 54% by energizing its Advocate http://brandadvocatebook.com/top-10-ways-to-sell-a-brand-advocate-program-to-your-cmo/

- Club One Fitness, a San Francisco-based fitness chain, got $525,000 in lifetime membership revenues from a two-month advocacy campaign.

- Parallels, a software company, got a 21% sales conversion rate when Advocates shared offers and testimonials with their peers.

In addition to the media and sales value of energizing Brand Advocates, businesses will get other benefits from turning its highly satisfied customers into a marketing force:

  • Higher page rankings in natural search results from advocate-generated media
  • Important insights about brand advocates and their social networks
  • Valuable customer feedback that can be used to guide product/service development
  • Deeper relationships and engagement with brand advocates, a company’s most valuable customers
How can Business Analytics help to plan Advocacy programmes?

 

Analytics helps you to find customers to target for advocacy and to monitor their effectiveness. It can enable you to understand and segment your customers based on their loyalty, their influence, and indicators as to their likelihood to recommend/be an advocate for your brand.

Step 1: Analyse your existing customers based not juston purchasing patterns, but also attitudes and behaviours that would indicate loyalty, increase likelihood of supporting your product/brand and recommendingthem to others.

Typical tools include:

Clustering Analysis can be used to segment your customer basebased on factors such as :

  • Likelihood to recommend your products to others,  or to continue purchasing,  or to purchase other products,
  • Understanding key benefits of your products over your competitors,
  • Providing your company with opportunities to correct problems
Descriptive Profiling Analysis helps you understand the features of your loyal segments in terms of differentiators like:
  • Annual Expenditures,
  • Geodemographic characteristics,
  • Customer satisfaction score
Having identified your loyal segment and understood who they are, the next step is to distinguish who will be morelikely to be interested in your target e.g. foods supporting a healthy diet

 

Predictive Analysis uncovers hidden relationships between data such as:

  • transactional data (e.g. frequency and recency of purchasing health-related products)
  • demographic data (e.g. age, gender, geography, income)
  • plusother associated social or online datato determine whether a customer has a particular interest in a healthy diet.
Using a combination of descriptive and predictive analytical techniques allow you to identify the loyal customers who can potentially be targeted as the advocates of your new offering.

 

Step 2: Identify your most influential ustomers, and launch an advocacy programme, to reach out to your loyal and influential customers and engage with them around advocacy.

Social influence scoring will highlight customers with strongest ability to influence their connections via recommendations. Social influence scoring tools connect to different social media networks to obtain attributes, in order to generate the Social Influence scores. Key is being active in multiple networks, and having large followings, but in terms of influence examples  of attributes that link toengagement with your followers include:

  • Mentions: A mention of your name in apost indicates an effort to engage with you directly
  • Likes: The simplest action that shows engagement with the content you create
  • Comments: As a reaction to content you share, comments also reflect direct engagement by your network
  • Subscribers: Subscriber count is a more persistent measure of influence that grows over time
Step 3: Encourage and recognise yourcustomers as advocates by monitoring social conversations, and tailor the approach towards making it a buy trigger for their trusting followers.

 

What next?

Customer advocacy is rapidly gaining interest as a real way to harness “word-of-mouth” recommendations for real benefit toyour company. The applications of customer advocacy are growing all the time. For example, In Barclays, staff bonuses will soon be based on customer advocacy to promote good customer service culture.

http://www.ftadviser.com/2012/10/11/ifa-industry/product-providers/barclays-becomes-latest-bank-to-heed-fsa-incentives-warning-E09mIZkWTpTWWbb8NNuwMI/article.html

So if you don’t yet engage with your loyal customers, or your customer strategy is limited to utilizing your influential customers, then investment in customer advocacy can turn your most influential customers into your most valuable ones.

About the author

Jonathan Chadwick
Jonathan Chadwick
Jon has worked for 18 years as an analytical consultant in the UK, USA and Europe for a diverse range of sectors, most recently Financial, Oil & Gas and Government. Jon has extensive experience in benefits realisation, modelling, business analytics, portfolio management and change management. Jon devised and created Figure It Out.

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