I started work on my first book project a few months ago with Michael Lowenstein, Vice President and Senior Consultant at Harris Interactive who has authored four other books and Lopo Champalimaud, Managing Director of LastMinute.com.
The project is still the early phases and, in fact, I want to show you were we are in terms of our outline which I’m providing below so that we can get your thoughts and feedback before we begin the ’shopping’ process with publishing houses and book agents. Assuming our book gets picked up – fingers crossed — I intend to use my blog as a tool to continue our conversation, brainstorm ideas, and acknowledge your contributions both here and eventually in the book.
The working title of the book is The Advocating Customer. This book is not going to be about word of mouth marketing. I don’t want to speak for my co-authors here but I believe we do have a shared understanding – and shared experiences – that word of mouth is simply a component of customer advocacy and not some stand alone new media channel or the one marketing activity your business must support now in order to be successful.
I’ll label myself a WOM Progressive which I think is a good thing I think since I believe leveraging customer knowledge and conversations is where all good word of mouth campaigns originate. I believe when marketers really understand why their customer advocates deeply connect with a brand, product or service they have an opportunity to really understand, plan, manage, and monetize a wom campaign that is geared toward acquisition based activities that recognized interests of sub-groups which can drive strong and meaningful connections. I know I’m off on a bit of a tangent here but my point is advocacy can be a tool to make other marketing initiatives more predictable and profitable.
Here’s our current draft, and I’m looking forward to your thoughts and feedback feel free to comment here or email me — todd at boldmouth dot com.
Book Premise
Businesses, hoping to amplify the explosive power of word-of-mouth in their marketing programs have come to something of an epiphany. The seemingly simple process of people talking to one another about a product or service, a behavior that has been around for as long as humans have lived in communities, is not as easy to manage as they once believed nor has it generated the lofty results they had expected.
Over the past decade, the concept, and effective execution, of word-of-mouth has become extremely important to marketers as, increasingly, b2c and b2b customers have shown distrust, disinterest and disdain in supplier messages conveyed through traditional media.
Several books have served to raise awareness of such new-age word-of-mouth marketing components as influencer relations, buzz, viral communication, neural networks, online community, collaboration, consumer generated media (blogs, boards, user forums, online reviews, and direct supplier feedback) and peer-to-peer dialogue. However, they have barely scratched the surface in defining how to use these techniques, and assess their effectiveness, to achieve and sustain success.
Today, we are witnessing customer-driven marketing through empowerment and self-management; and companies have found themselves in the-back-seat of the new customer-supplier relationships. They are forced to modify existing communication techniques, or create new ones, so that they can be positioned to generate advocates among their customer bases. How they use, or misuse, these new-age relationships and techniques, and how they assess the return-on-customer effectiveness, and level of monetization, of their initiatives will change how word-of-mouth is pursued by both small and large enterprises.
The false sense of simplicity surrounding the early application of word-of-mouth techniques has given way to real challenges that businesses must address:
- What is true word-of-mouth vs. artificial word-of-mouth, and why is it essential for marketers to distinguish between the real and engineered advice?
- How do marketers actually build plans around word of mouth, run an effective word of mouth program, and track its success?
- Is word-of-mouth the same in every market or geographic situation; and, if not, what are the key differences for marketers to understand?
- Why is customer advocacy the ultimate attainment of loyalty behavior on behalf of a brand or supplier?
- What kinds of research and metrics are available to monitor the revenue impact of word of mouth and advocacy among customers?
- What is necessary to get staff buy-in, and what is the role and effect of employee advocacy in word-of-mouth?
- What is the real, likely future of word-of-mouth marketing?
The Advocating Customer will offer a comprehensive overview and actionable insight into the word-of-mouth landscape: how we got here, how true word-of-mouth campaigns can be generated and modeled, how appropriate measures need to be applied to assess strategic and tactical campaign effectiveness, why customer advocacy is the ultimate goal of word-of-mouth, how technology tools are being integrated to facilitate learning from word-of-mouth campaigns, how employee behavior links to customer advocacy behavior, how word-of-mouth is addressed outside the U.S., and how the concept is likely to morph going forward.
Chapter Descriptions
Table of Contents
Introduction
Foreword - Why Loyalty Is Not Enough
For many years, Marketing practitioners have been focused on customer loyalty. How do you measure it, how do you protect it and reward customers for their loyal behavior? What we are coming to understand now is that a loyal customer is not enough. Customers may say that they are loyal to the brand and say that they will use the brand again; but, given the opportunity, they will often switch without hesitation. We have seen this in industries such as retail, wireless telecom, credit cards, and travel, each of which has spent more than almost any other industry on loyalty tools.
At the same time, we are seeing a group of brands such a Google, MySpace, Red Bull, Apple, and Harley-Davidson, each having a dedicated and enthusiastic group of customers who are more than just loyal, they are — customer advocates. Once these select companies have built a critical mass of customer advocates, they enjoy benefits which most brands could only dream of. They get massive word of mouth exposure, they have lower customer acquisition costs, have lower CS costs (or none in the case of Google), they can enter new market areas, etc. The most remarkable example of customer advocacy may be Google, which not only doesn’t do any marketing (in the traditional sense) but also doesn’t have any customer service; and, yet, Google still has a large cadre of users who are passionate about their value proposition.
Customer loyalty, in and of itself, focuses on retaining customers, and ‘barriers to exit’ in the macro sense. In today’s interconnected world, with active vendor substitution and high churn rates an everyday reality, traditional approaches to customer behavior management will inevitably fall short. Advocacy, the highest expression of customer loyalty behavior, will be the standard for successful brand and corporate performance going forward.
1) What Do We Mean By Customer Advocacy?
Chapter Topics
- Who are the advocates?
- How do you identify them?
- Why is this new?
- How is this different from Loyalty?
- What benefits do they provide - why should I care about these people?
- Who does it well?2) The History of Customer Advocacy
Chapter Topics
3) The Importance of Word of Mouth in Customer Advocacy
Chapter Topics
- The connection between WOM and Advocacy
- Agreeing not to Agree: Defining WOM, viral and buzz
- How We Got Here: User Generated Content and Clutter, media fragmentation and performance declines for traditional media
- The Truth about Trust
- Macintosh vs. Compaq: Linking grassroots history to present day buzz
- WOM Progressives: It’s about Advocacy Stupid
- Connecting business strategy excellence (operations, customer service, product/service) and customer experience
- How new personal communications technologies (blogs, IM, tagging, and mobile) help turbo-charge connectedness and the viral spread of information4) Marketing Value of Customer Advocacy
No matter how well suppliers believe they understand their customers’ needs and their behaviors on an individual basis, they must have both a strategy and array of tactics which will help customers create influence and personal leverage, peer-to-peer and situation-by-situation. What this means as an end goal is creation of active advocacy, a state of elective, personal, often deep-rooted and emotional engagement between a customer and supplier that goes beyond satisfaction, beyond delight, beyond loyalty and even beyond commitment.
Advocacy represents the highest level of customer involvement and loyalty behavior achievable; interaction with suppliers on an individual and emotional level well past the typical functional, passive relationship between supplier and customer; and having them proactively and voluntarily convey their experiences to friends, relatives and colleagues.
Active advocates are fully committed, with an emotional connection well beyond the typical relationship of customer and supplier. They are the customers with the highest level of involvement–active, vocal and proud. These are the crème de la crème: the people who “live” the brands that they regularly use. Their lifestyle often mirrors that offered by the brand, and they are active in talking about their experiences.
Chapter Topics- Customer advocacy drives business growth
- Cost-effective marketing practices
- Redefining what is media in the stew pot of new-age corporate marketing rituals
- The most overlooked, and potentially the most powerful partner in word-of-mouth
marketing campaigns is an advertiser’s current customer base.
- The utility of large networks
- The value of self-selected targeting5) Measuring and Monetizing Customer Advocacy
Advocacy is not merely a different spin on gaining insight about customer purchase, referral and communication behavior. Arguably, because the name of the game is value optimization, learning about how customers perceive suppliers, brands, products or services and then having them carry their experiences and consideration forward as active advocates is, or will become, the only way to think about them
What are the specific benefits to sales, marketing, and customer service associated with understanding and leveraging customer advocacy? There are several, and all are vital:
• It helps companies identify how emerging trends, image, service performance and reputation relative to competitors, problems and complaints; response to new product or service ideas; and even rumors and back-fence Internet gossip can affect customer behavior.
• It is a means to understand and address the strength of the customer franchise and how this will differ by segment within the base.
• It helps companies determine the amount of momentum behind the franchise and if competitors are undermining it.
• It identifies exactly why and how these perceptions have developed so that companies can act, both tactically and strategically.
Beyond operational, marketing, and communication impact, the direct financial return for creating active advocates is both real and substantial. Studies in many industries have found that, compared to customers who were highly satisfied or even highly likely to recommend (as those who promote this metric as the single number that can be used to understand the drivers of growth), those who are true brand advocates have used products more recently, more frequently and with higher share of spend than customers with high satisfaction and high likelihood to recommend. Further, significant changes in level of monetization, notably share of spend, can be identified at each level of advocacy, i.e. as the level of engagement rises from passive and indifferent to real advocacy, share of spend dramatically increases.
Chapter TopicsHow much is a recommendation (really) worth?
- How to utilize Customer Advocacy as a framework to make marketing more predictable
- Viral marketing history, mechanisms and measurement
- Intelligence monitoring Practices
- High Value Metrics
- Sample data and performance tracking6) The Truth and Hype about Recommendation and Referral
There are flaws, inconsistencies, contradictions and challenges with the thesis that referral and recommendation equals word-of-mouth or advocacy. Businesses should be asking, “Look, is increasing recommendation the best way to drive business success? Is it going to be more impactful than reducing customer loss? Is it more powerful than increasing customer volume, cross-sale, share purchased? Is it the best way to go?” Recommendations are one key goal, but are they the main thing? Most customer management practitioners argue that, while recommendation and referral are important (as are unwillingness to recommend or refer), much more needs to be understood about customer decision and behavior dynamics.
Recommendation is one outcome of loyalty behavior, and where we’ve come now is that certain pundits seem to be saying that recommendation is an indicator of the construct itself. It should be realized that it’s possible, for example, to incentivize customers, and they will refer. If companies do that—and it can easily be accomplished—what happens to the value of the metric? It’s very, very strongly compromised. There are many more problems with putting too much emphasis on recommendation and referral, and they will be fully discussed in this chapter.
So, marketers really have to understand what brands and products customers would consider (known as the evoked set), what they’re currently using, what their level of favorability is, what their likelihood of saying positive and negative things about the product is. And, if they then build recommendation into that kind of construct, they will have something that’s more actionable.
Bottom line, it would be attractive to have a single metric, but it’s dangerous. Marketers want to know more. need to understand why, not just what, on as sub-segmented a basis as possible. Again, recommendation is an outcome of loyalty, not just an end goal in and of itself.
Chapter Topics
- Net Promoter score demystified and put into perspective
- One magic number vs. a simple, montizing, reliable model7) The Other Side of the Coin: Negative Word of Mouth
Chapter Topics
- Proactive Planning and Outreach
- Self-Regulated Communities & Undesirable Content
- Acknowledgement & Final Dispositions
- Monitoring Tools
- The Story of Marlo Furniture
- A final Note: Avoiding Risks
Inside-Out vs Outside-In Advocacy
Marketers are always concerned about whether the chicken or the egg came first, or the cowboys or the saloons. In creating customer advocacy, like creating a lasagna, it’s layers of messaging and experience over an extended period; but it has to begin with messaging, i.e how the brand promise is initially communicated and sustained, and grown, with each succeeding customer engagement and contact. Companies tend to believe that customers gain experience with their enterprises entirely through people, products and services. Largely true, as far as this thinking goes; but, organizations often don’t have enough awareness that what is said to customers, and how, where, and when it is said has an equal, if not greater, behavioral impact. Communication is about relevance and trust, two essential elements in the way customers see suppliers.
Customers have grown increasingly skeptical of supplier messaging. When considering alternative suppliers or making final purchase decisions, it is now becoming well understood that the principal, previously neglected criteria are intangible, emotional, relationship benefits, with much of what is tangible seen as one-dimensional and expected. This absolutely requires that the meld between messaging and experience is as seamless as possible. If companies want customers to advocate for them on the outside, the advocacy process needs to begin with the right messages, the right media, the right processes, and the right strategic experience creation.
Chapter Topics
- What leading-edge companies are doing to help optimize customer loyalty behavior
- Importance of branding, customer service9) How Do You Create More Customer Advocates Using WOM?
Chapter Topics
- Interest, not acquaintance, drives response
- Creating Community as a platform for advocacy
- Publishing and participation
- Format Agnostics: The creation of audio, video, advergames, and MMOG
- Putting Word of Mouth into action in Social Networks
- Campaign development and modeling for word of mouth marketing10) The Importance of Employee Advocacy & Linkage
Employees are at least as important as other aspects of customer management in optimizing benefits for customers. They are key stakeholders in value delivery and brand/supplier success; and they frequently represent the difference between positive experiences or negative experiences, and whether customers stay or go.
The extent of their role and impact needs to be better understood, but employee satisfaction isn’t the best way to do it. Why not? Industrial psychologists and organizational behaviorists have been studying employee satisfaction for over 30 years, assuming that the level of staff satisfaction will correlate with impact on performance. However, as one study concluded: “Researchers have been unable to confirm a relationship between employee satisfaction and business performance.” This is almost identical to the finding that level of customer satisfaction has little bearing on loyalty behavior.
It has been found that employee behavior and advocacy has a direct and profound relationship, or link, to the behavior of customers, and also to corporate sales and profitability. As research into this effect concludes with regularity, employee attitudes and actions, especially around customer commitment and engagement, and championing a company’s products or services, can’t be separated from the effective delivery of customer value. One study found that 68% of customers leave because of poor employee attitude. Another found that 41% of customers are loyal because of good employee attitudes and behaviors. A third concluded, importantly, that 70% of brand perception is determined by customer experiences with employees.
Findings such as this have demonstrated that employees are capable of directly contributing to both customer disappointment and customer delight. Beyond just understanding employee satisfaction and what employees value and desire in their jobs, it is essential that companies have a research and analysis method which links staff performance engagement and alignment with customer-related goals and objectives directly to customer behavior so that they can hire, train, recognize and reward employees for how they contribute to value delivery.
Chapter Topics
Kenneth Cole
Starbucks
Wegman’s
Harley-Davidson11) Are We There Yet?
Chapter Topics
TAGS: Marketing, customer advocacy, word of mouth, micheal lowenstein, lopo champalimaud, todd tweedy
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