Tools and Tactics for Advocacy Strategies

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Once you become convinced that the paradigm of marketing is shifting from the push strategies of the mass production era to the advocacy-based strategies that will flourish in an era of growing customer power you’ll need new tools and business tactics. Smart companies are currently in the process of building their own advocacy tool kits. There is a clear first-mover advantage when it comes to advocacy because once customers establish a genuine and deep relationship of trust with a firm, they are not at all likely to switch to a competitor. Later entrants will always have an inferior position. This is one area where the early adopters have an opportunity to create a sustainable competitive advantage.

To enhance your firm’s ability to act as an advocate for your customers. try using some of these tools:

Tool #1–Build a good foundation first

Don’t even try to act as an advocate for customers unless you have the three basics in place:

1. A working TQM program that ensures you consistently deliver a high-quality product or service.

2. An effective customer satisfaction program that enables you to measure whether you’re creating happy customers.

3. A customer relationship marketing (CRM) capability where you can learn enough about each customer to effectively act as their advocate.

Too #2–Change the focus of your CRM program

Instead of using CRM to drive sales, focus on helping customers make the best decisions possible and then supporting them through their lifetime of ownership. To achieve this, you’ll need to provide every customer with complete, unbiased and incredibly transparent information. You’ve got to make it easy for customers to contact other customers so any exaggerated claims can be uncovered. You have to become a brand your customer trusts implicitly. In short, you’ve got to orient your CRM away from one-to-one marketing and more towards delivering precisely what customers need.

To be more specific, in order for customer advocacy to work for your firm, at a minimum your CRM program must provide:

The ability to individualize marketing.

Establishment of your brand as a trust mark.

Loyalty programs that reward continuing business.

Sales channel partnerships to maintain consistency.

The ability to carry our opt-in permission marketing.

Individualized one-to-one communication.

The provision of full information and advice.

Full transparency and totally unbiased information.

A good CRM program helps both your firm and your customers. You gain the ability to know what your customers are thinking about the products and services you offer. On the basis of that understanding, you’re then in a position to craft better products, fine-tune and optimize your marketing, build the relationship and generate premium profits. In return, customers get everything they need to make better decisions. They also establish and grow their relationship with your firm throughout the lifecycle of ownership that ideally stretches from purchase to use, service and ultimately re-purchase. This is a sound platform on which to build customer advocacy.

Tool #3–Continuous learning

Continuous improvement is a key component of TQM. Trust is enhanced and strengthened when you have a continuous learning system in place. Through market research and market experimentation, you can learn how to increase the trustworthiness of your marketing programs.

For example, Intel decided it wanted to increase the level of trust on one of its customer support sites for digital cameras. It tried four different experiments: 1) trust seals, 2) a wizard with logical guidance, 3) an online persona named Rosa, 4) Rosa with a voice. Over this sequence of experiments, the proportion of customers who were successful in downloading software for their digital cameras increased from 63 to 85 percent. Intel calculated that for every 5 percentage points gained in this area it would save $10 million a year by reducing telephone support calls and mailing costs.

Tool #4–Develop a virtual trusted advisor

Internet technology now makes it feasible for you to integrate a virtual customer advisor into your Web site. There are several ways you can provide this advisor with intelligence, but the key is that the advisor needs to be able to pick up on clues the customer provides and then generate good recommendations from those clues. The simplest approaches are:

Attribute elimination: where the customer selects the required product feature and the virtual advisor then identifies that meet those specifications.

Product comparisons: where the virtual advisor prepares side-by-side comparison tables that highlight the technical specifications of each product selected.

Since some customers just want the facts of they can make a decision while others want to take things slower, many companies have found it makes sense to offer three different virtual advisors on their Web sites:

A needs analyzer for first-time buyers.(Attribute eliminator)

A comparator for experienced buyers.(Product comparisons)

A power user advisor for those who know what they want to buy.

Obviously, in building a virtual advisor your Web site must be easy to navigate, have a comfortable look-and-feel, and provide sound advice. Providing a persona is great for those who want personal advice. The key is to design an advisor your customers will relate to and come to trust. Your advisor will need to accurately reflect how customers think and incorporate similar thought patterns. This will take some experimentation and learning on your part to get right.

True customer advocacy requires that your virtual advisor also be able to recommend competing products if their needs are better met by those products. At the very least, your advisor needs to be able to make an open and honest competitive comparison. The consumer will require this information and will probably do this anyway, so by offering it on your Web site, you build the buyer’s trust. This can be further enhanced by embedding additional trust clues like videos of customers explaining their experiences on your Web site.

Tool #5–Listen in and learn actual customer needs

Once you have a virtual trusted advisor in place, you can learn a lot about unmet customer needs by monitoring the dialogue between your advisor and customers. For example, General Motors built three virtual advisors for the truck section of its Web site–a mechanic, a retired editor of Consumer Reports and a contractor. Customers can choose which of these advisors they want to interact with.

In August 2001, GM noted consumers were often asking for three truck combinations that were not currently being offered:

A small truck that could tow boats.

A large truck that maneuvered like a small truck–that was possible with four wheel steering.

A large truck with high fuel economy.

As a result, in 2005 GM introduced a mid-sized truck which could tow bigger loads, a full-sized pickup with four wheel steering and a hybrid full-sized pickup that would offer exceptional fuel economy

Listening in to the interaction between consumers and the virtual advisor can also be enhanced in several ways:

Many companies now develop new products in partnership with “lead users.” In this method, a new technology need is identified and some leading edge users are found. They then participate in a workshop to help design a product that that will perfect for their needs. 3M has found that using this collaborative approach to develop new products is eight times more productive than traditional alternatives.

Another approach is to offer a “design pallet” that lets customers mix and match the features they want. For a truck, for example, the customer can change the power, size and options. For each change, the truck’s cost and fuel consumption is recalculated and displayed. This can identify clusters of potential customers who are prepared to accept various trade-offs to get a truck configured just the way they want. These may represent the significant new product opportunities of the future.

Tool #6–Build a full virtual advocate

Providing a virtual advocate for your customers is the ultimate aim of all these tools. It is the very highest level of customer advocacy possible. Some examples are already starting to emerge. There are already three simple advisors available to help consumers make wireless choices (WirelessAdvisor.com, Letstalk.com and Inphonic.com)

These sites all offer a choice of advisors so consumers can find someone they relate to. Typically, these online advocates:

Have an accurate database with up-to-the-minute information about what plans various companies are offering in your area.

Allow you to find the best plan that suits your needs.

Describe how you can save money.

Allow you to design your own plan and put your plan out for bid to the various companies operating in your area.

Provide information about the guarantees offered by each company.

Allow you to switch plans seamlessly without needing to contact your current supplier.

Send you notices whenever a new company enters your market and starts offering a plan that will meet your needs.

Goes back after three months and checks that the plan you’re on has actually saved you money. If it decides that some other plan choice would have been better for you, you are retroactively enrolled in the better plan and the savings are rebated to you.

Clearly, virtual advocates of this nature are a powerful tool for firms that want to enter new markets or increase their market share. Any firms that are not trust-based will quickly learn that the customer is the boss and that they are prepared to switch to whichever firm partners with them and fights for their interests.

Tool #7–Move your firm towards advocacy gradually

When a firm has many years of experience in push marketing, moving to a customer advocacy strategy will be very difficult. It will require vision, courage and passion. There are several things you can do to ease this transition:

Empathize with your customers–learn how they think, what they experience and what are the flow-on consequences of the decisions they make. All of this information will help you become a better advocate for their interests.

Change the mental model embedded within your corporate culture away from confrontational push marketing and towards customer advocacy. Talk about the benefits. Make sure your CEO is out front and leading the change. Provide change agents at all levels with the tools they’ll need. Meet regularly to discuss how your corporate beliefs are changing and evolving and plan out new initiatives. Keep at it until a new set of values get integrated into your corporate culture.

Hire new people who have high empathy with customers.

Develop short-term measures that look at the amount of trust generated rather than just sales and profits.

Create new incentives that will reward people when they build long-term trust relationships with customers. Tie all bonuses to relationship measures.

Establish a new management team position–Vice President of Customer Advocacy or Chief Advocacy Officer.

Enhance your cross-functional consistency–make sure all your customer-facing functions are on the same page and have access to the same information.

Build trust with all your stakeholders and actively advocate for their interests. Make transparency and openness the way you act with everyone. Work together with your partners to find new ideas that will benefit everyone.

Have a vision for your long-range success that everyone in the organization buys into. Then have the organizational courage to take risks to actually deliver that vision. The management team will need courage to take whatever steps are required to change the status quo and move the organization in the right direction. Mix in the passion that will also be required for sustained effort.

Don’t make advocacy a fad. Strengthen your TQM, customer satisfaction programs and your CRM initiatives. Advocacy is built on the foundation provided by these three elements. Be certain you have the best quality before you think about advocacy. You can’t be an advocate until you have satisfied customers.

Decide Where You Want to Be Positioned on the Advocacy Spectrum

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With the ongoing increases in customer power now occurring, its time to decide how you will respond. What’s needed is a profiling tool that measures where you are at present on delivering the components that build trust. Once you know where you are currently positioned on the trust dimension, you can then plan where you need to be in the future in order to respond effectively to the ongoing growth in consumer power.

The operating rules of traditional or push marketing were:

1. “Caveat emptor” or let the buyer beware: supply just enough information to secure the sale but not so much that customers can see whether other buyers are getting better terms and conditions.

2. Spend heavily on advertising and selling: to secure the order by making cusotmers aware of what you have to offer.

3. Maximize your market position: so you can cut through the clutter and position yourself advantageously.

4. Compete aggressively on price: even to the point of offering different prices to different customers if that is what’s required to get the business.

5. Build quality products and provide good service: or get left behind by those companies that do that.

6. Do whatever is necessary to ethically get the sale.

7. Compare yourself to your peers by just two measures: total sales volume and market share.

By contrast, the operating rules of a full consumer advocacy strategy are:

1. Advocate for your customers: be completely transparent and provide customers with full. honest and unbiased information about your products and those of all your competitors.

2. Invest more in superior products and less in advertising: so you can honestly say you have the best products bar none.

3. Invest more in superior products and less in advertising: so you can honestly say you have the best products bar none.

4. Work closely with customers in the design of your products: to create the solutions to their problems they actually need rather than those that are easiest for you to deliver.

5. Make your fulfillment processes flawless: so customers will trust you to make good on what you said you are going to do.

6. Be loyal to your customers: by creating bundles of services that will meet the needs of your existing customers rather than endlessly going after new customers.

7. Measure and track how much trust your customers have in you: meaning you track their repeat purchases and what share of wallet your customer allocates to your firm. Advocacy success is measured by growth rates in these key metrics rather than sales revenues or market share.

For most industries, a complete advocacy strategy may not yet be appropriate. You’ll instead need an evolutionary strategy starting from where you currently lie on the advocacy spectrum. The best way to evaluate your company’s current position on the overall advocacy spectrum is to look at eight individual components:

Generally speaking, push marketing is low trust in all eight components. Relationship marketing tends to be a mix, with some low trust components and other high trust components. An advocacy strategy will be high trust in all eight of these different components.

To rate your company in each of these eight components, answer these questions:

Component #1–Transparency
How honest and open are you with customers?

High advocacy companies are brutally honest and offer exceptional levels of transparency. For example, Kelly’s Blue Book and Edmund’s give accurate and complete information on new and used cars. Amazon.com provides information about a book, the opportunity to look at part of it online, reviews of the book from the publisher and other parties, reader feedback on the book and alternative suggestions for other similar books purchasers may consider. Amazon also states how long it will take to ship and whether any second hand copies of the look are available for sale. In short, Amazon shares everything it knows about the product with prospective customers.

Component #2–Product/service quality
Can you, in good conscience, recommend
your product or service to customers?

GE and Toyota are the gold standard in this dimension. They offer consistently good products. To engender high trust on the part of your customers, what you sell must meet or exceed your customer’s expectations. It must also compare well to what your competitors are offering. You don’t have to sell luxury goods, but your level of quality must be as good or better than expected.

Component #3–Incentives
Do employees have incentives to be customer advocates?

Generally speaking, salaried staff tend to be more aligned with building the long-term relationship customer advocacy requires. If your compensation programs reward those people who create alignment between the needs of the customer and the interests of the company, that’s good. eBay is very good in this respect. Both buyers and sellers benefit from building good ratings. There is also an excellent arbitration process available through which buyers and sellers who are not trustworthy can be eliminated.

Component #4–Partnering with customers
Do we create collaborative and mutually
beneficial relationships with our customers?

To develop trust, your organization has to come up with meaningful ways to show customers you’re on their side. GE shares its knowledge of business process improvement with its corporate customers. This enables the company to more fully understand the needs and issues facing its customers. University Federal Credit Union of Austin, Texas offers customers basic courses on buying a car, buying a home and paying for a college education. These in-person seminars don’t necessarily lead to more business for the credit union but by making its customers better informed, trust flourishes.

Component #5–Cooperative design process
Do we collaborate with customers to create new products and services that are mutually beneficial and better than those on offer from our competitors?

High trust means companies view customers as intelligent and responsible rather than demographics to go after. Push oriented companies rarely solicit customer advice. By contrast, high trust companies like Dell, Apple and Hewlett-Packard run online discussion forums where customers can have input into next-generation products. 3M uses lead user generation projects to similar effect. By doing this, companies learn about the real-world problems their customers face in much finer detail. Technical support costs are also reduced because customers tend to help each other through the online forums.

Component #6–Product comparison
Do we provide unbiased advice that helps customers choose to buy our products and services?

When push marketers sell inappropriate products to customers, they end up creating enemies rather than revenues. Online travel services (like Expedia, Travelocity and Orbitz) enable customers to understand and then choose easily between all the various options. To act as an advocate in this component, you have to make recommendations that maximize customer satisfaction rather than optimize your own profits.

Component #7–Supply chain
Are our business partners trustworthy as well?

In most industries today, companies rely on their partners to supply, produce, deliver and support what is being offered. Customers want to know whether your partners have the same high standards you do. To use an advocacy strategy, your partners must engender trust. The experience of Ford with Firestone tires on its Explorer SUVs is an excellent illustration. Although a defect may be entirely the supplier’s fault, you may get the blame for having selected that supplier in the first place.

Component #8–Focus
Is advocacy and trust engendered across all functions and at all levels of your company?

To act effectively as an advocate for customers, this mind-set must be present right across your entire organization. You can’t have one part of your organization focustion focusing on maximizing profits while another part attempts to build trust. Amazon.com and eBay are very good at this. They consistently do things that are designed to advocate for their customers. Another excellent example of this component is Legg Mason, which provides its customers with financial advice. The company unfailingly puts the client’s interests first, which is the essence of advocacy.

Armed with this profiling tool, you can evaluate where you are at present on the trust spectrum and where you need to be in the future. By doing specific things in each component, you can move to the right on the trust scale. For example:

1. You can improve your product quality.
2. You can enhance your levels of customer service
3. You can build a Web site providing education and advice.
4. You can create new employee incentives matched to trust.
5. You can develop new metrics to track progress.
6. You can start developing new products with your customers.
7. You can move your CRM programs to trust building
8. You can develop easier comparison tables for customers.
9. You can enhance your community building programs.

Notably, advocacy is not for everyone. It just won’t be feasible to increase customer trust levels if:

You sell a highly standardized product that cannot by differentiated by anything except price.

You face no competition and customers have no choice but to buy from you.

Your product or service quality is deeply impacted by the weather or other factors beyond your control.

You have a completely short-term financial focus and don’t have the luxury of being able to invest in strengthening the customer relationship.

You have a short-term customer base where customers buy from you only once in their lifetimes.

You have a low impact product customers really don’t get too enthused about one way or another.

You have uncontrollable quantity levels–meaning there will be times when you need to have fire sales to move excess inventory while at other times you’ll be out of stock for considerable periods.

It’s very difficult if not impossible to develop higher levels of trust and to employ an advocacy strategy under these conditions. These exceptions are quite rare, however, and as a general rule of thumb most companies will benefit significantly by moving to the right on the trust spectrum.

How Industries Are Already Using Advocacy Strategies

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The increased customer power that underpins customer advocacy strategies is now being felt in a number of industries. A number of new ideas are being tried to respond to the decreasing effectiveness of the traditional push marketing tactics. You need to take on board the lessons already learned in the marketplace and more forward rather than futilely attempting to retain the status quo.

The Travel Industry

In the 1960s and 1970s, business travelers were the mainstay of the airlines. This changed in the 1980s and 1990s when leisure travelers came to the fore and industry capacity grew. Airlines resorted to load management pricing that meant pricing became very complex and time sensitive. The entrance of discount airlines further intensified this trend this trend. At the same time, Internet-based third parties (Orbitz, Expedia and Travelocity) were established to help customers price-shop when if comes to planning their travel. This greater amount of information has meant many more customers:

Decide their own trade-offs between price and quality.

Do their own bookings rather than use a travel agent.

Can aggregate their travel expenditure to get better deals.

The travel industry itself is responding to this increased customer power by offering open and honest information via the Internet along with more options, better advice, simplified procedures and more personalized service for those who want it. It does appear the Internet-based third parties are here to stay, however, as these companies are profitable and some even have market capitalizations greater than many airlines. Consumers can now get better deals and can choose to use a travel agent, to use an online service or to go to each airline direct through its Web site.

The Automobile Industry

Long noted for pushy sales tactics, before the Internet the dealer’s sales representatives had greater power because they had more information about inventory levels, dealer costs and quality ratings. With the Internet, customers are much better informed, meaning they can make better decisions. They can walk into a dealership knowing the vehicle they want, what stock level the dealer has o hand ready to sell, what the dealer paid and which other nearby dealers they are willing to go to if negotiations at the first dealership don’t result in an acceptable deal. Research has shown that better informed customers now save on average $40 when purchasing a vehicle.

To respond to greater customer power, vehicle manufacturers are attempting to cultivate better relationships with customers. General Motors, for example, has created a Web site called AutoChoiceAdvisor.com in partnership with J.D. Powers, an independent third-party assessor of vehicle quality. They advisor asks a series of questions and then produces a ranked list of the top eight vehicles that will best fit the customer’s needs and preferences. The site advocates all models rather than just GM vehicles. Customers can then arrange to have a 24-hour test drive of the vehicles they are considering buying through the Web site. The industry’s approach to marketing to customers is now shifting significantly towards trust-based ideas and initiatives rather than push tactics.

The Health Industry

At one time, whenever someone had a health related question they had to go see their doctor to get advice. Today, customers have access to a vast amount of health information via the Internet. In addition, many drug companies now sell direct to the customer. Employees can often choose between a number of different health plans offered by their employers, even down to the level of whether they want generic brands or specifically branded health products when they go to a pharmacy. In all, consumers now have much greater power over their medical decisions.

Reflecting this increase in customer power, online community groups have sprung up for virtually every major disease. These allow people to share stories, exchange information with like-minded people and find the best treatments. Many customers then go to their doctors demanding specific treatments rather than asking what the doctor suggests.

In the health industry as a whole, it is not yet clear who will take the lead in responding to this increase in customer power. All members of the industry–pharmaceutical firms, hospitals, doctors, regulators, retailers, the HMOs–are trying different ideas that accommodate better informed and more demanding customers.

Stock Buying

When eTrade launched in 1996, this revolutionized consumer investing. As a number of other firms rushed to enter the market, the price of trading stocks dropped by more than 50 percent compared to the prevailing rate of commissions in the 1990s. To respond to these new market entrants, the traditional brokerage houses have tried a variety of approaches. Schwab emphasizes trust and customer advocacy because its brokers are not paid a commission and therefore can offer impartial advice. Merrill Lynch provides premium investor services at lower prices and personalized assistance. As a result, independent investors can now receive a level of research and personalized, consultative services that put them on a par with professional fund managers.

The Financial Services Industry

Consumers can now go to Web sites like BankRate.com and money-rates.com to find out daily interest rates for loans, mortgages, certificates of deposit and other financial services. At one time, banks would have preferred to keep this information confidential. Today, however, most banks and other lenders realize the customer is going to get the information anyway. Therefore, a better approach is to openly disclose what’s being charged and then find ways to justify the difference. Consumers now have a wide range of options where previously they had very few.

The Real Estate Industry

Getting around homes in person is very time consuming. Therefore, around 56 percent of home buyers go online first to develop their own shortlist of houses they want to see in person. Realtors initially resisted this but now have found they are better of pooling their listings and providing in-depth information to consumers. Other new intermediaries are also in the marketplace allowing people to list and sell their houses with out a real estate agent (ISoldMyHouse.com) or to compare the performance of the various real estate companies (Quality Service Certification).

Auto Insurance

Traditionally, it was very difficult and time consuming to compare policies and prices directly. Today, consumers can go to AllQuotesInsurance.com, fill out one form and then get a summary of all the various options available. This has forced many more companies to offer instant quotes online rather than forcing people to wait tor a quote to arrive in the mail weeks after making an inquiry. Many financial institutions are also offering insurance as add-ons to their products or services.

Job Finding

Around 20 percent of all working-age adults in the United States now have resumes posted online in Web sites like Monster.com, Jobs.com and Careerfish.com. These people are indicating that they are willing to change jobs at any time for more money and better conditions. This makes it easier for employers to find the people they need. Traditional recruitment agencies are responding by changing their focus from generating job offers to more of a screening service for job applicants.

Consumer Durables

There are now a host of new information providers who can provide consumers with unbiased information before they decide to buy anything. These would include Amazon.com, Dealtime.com, CNet.com, Bizrate.com and Epinions.com. These sites allow purchasers to provide feedback on what they have found in using the products in real world situations. They also make available peer group ratings and retailer ratings. Retailers, in turn, are responding to this avalanche of new information by using the Internet in some very smart ways. Wal-Mart and Circuit City encourage shoppers to start online and do their comparison shopping and then visit one of their stores for a hands-on demonstration. This also provides peace of mind about after-sales servicing. J.C. Penney has more than 9 million people on its opt-in mailer service where customers are e-mailed information about new products and the latest discounts. As time passes, retailers will find more and better ways to integrate the Internet into their business models.

The Advocacy Concept

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Advocacy means you faithfully represent your customer’s interests and provide them with honest information, even if that means they end up buying products from someone else. It requires that you have transparency and engage in a dialogue with customers. Advocacy also demands you invest more in product development and less in promotion and advertising,

The availability of the Internet as an information source has substantially enhanced customer power in five specific areas:

1. Customers can now access independent information about your products and services: meaning they are more likely to find out what other people are saying about you. At least 64 percent of all new car buyers research models, features and prices before they ever set foot in a dealership.

2. Customers can now find viable alternatives readily: meaning they increasingly look for the best deals rather than simply those that are closest at hand. Search engines, comparison sites and marketplaces like eBay make finding loads of competing products simple and straightforward.

3. Commercial transactions and shipping are becoming more simplified: meaning more customers are comfortable buying products and services from anywhere in the world. This also makes it easier for customers to switch from one supplier to another with a minimum of fuss. Consumers can buy an almost infinite range of goods without even leaving their homes through the Internet.

4. There is an increasing amount of communication between customers: meaning prospective customers can find out how you treat your customers before they decide to buy. Sites like Epinions.com and Planetfeedback.com make it easy for past customers to rate your products and your service. This has the effect of amplifying word-of-mouth style marketing.

5. Customers are becoming more confident: meaning they can control the amount of marketing communications they receive more effectively. Consumers can now zap commercials on TV, screen their telephone calls before answering the phone, filter out junk e-mail. More than 50 million Americans have signed up for “no call” protection from telemarketers.

The combined effect of all five of these trends is that consumers are becoming more powerful and better at using technology advantageously. In light of this growth in customer power, companies really only have three options available to them:

1. Market more aggressively and expansively.
2. Strengthen the customer relationship more.
3. Embrace advocacy.

Of these three options, advocacy offers the best way forward. Media channels have become so diverse and fragmented nowadays that it is increasingly difficult and expensive to push information through to prospective customers that way. Similarly, customer relationship marketing has enabled companies to target their customers individually, but this approach runs the risk of becoming too invasive when used continually. Advocacy is a more effective alternative worthy of consideration.

The traditional business model is companies market and advertise their products in an effort to get customers to buy. The customer is then expected to evaluate the offerings of all vendors and purchase whatever provides them with the best combination of price, value and quality. Each buyer is expected to look out for their own interests.

Company—→Advertising Marketing→Customer→Purchase Decision

Advocacy means you provide customers and prospects with open, accurate and complete information about what you have to offer and what your competitors have to offer. You then provide advice so customers can find the best products, even if they buy from someone else. The point is that customers will learn the truth anyway, so by providing them with accurate information and embracing honesty, you can earn their purchase. This will be a dialogue rather than a one-way monologue where you speak at customers. Advocacy effectively means you go into partnership with your customers in the expectation that satisfied customers will tell others about the positive partnership you have formed with them.

Vendor A Advice based on all the options
Vendor B
Vendor C→Company →Advocacy →Customer →Purchase Decision
Vendor D
Vendor E Trust

In many ways, advocacy is a major step forward in the evolution of the relationship between a firm and its customers. Previous steps in this evolutionary process have been:

TQM
Cust. Satisfaction→CRM→Advocacy

Total Quality Management (TQM) means you develop products that are good enough for customers to be willing to recommend to others.

Customer satisfaction programs focus on giving customers more of what they want.

Customer Relationship Marketing (CRM) emphasizes one-to-one personalized marketing based on known preferences. CRM usually requires building a huge warehouse of information and then mining the data to present customers with offers they are predisposed to accept. If used too regularly, however, CRM can become intrusive and aggressive for customers.

Advocacy–becoming a trusted representative of your customer’s best interests–is the next natural step. Under this approach, you give customers open, honest and completely transparent information. You will only earn a sale if your products are better than those offered by the competition. Your main focus, then is to design and develop better offerings rather than spending money attempting to attract a prospective customer’s attention.

Advocacy requires a mutual and reciprocal dialogue to develop. You help customers buy the best products they can and in return they tell others about this positive relationship. Over time, this will mean your customer acquisition costs will decline in sync with growing customer preference for your product.

Push marketing was driven by the economics of mass production. Relationship marketing was propelled by the saturation of push marketing and the intense marketplace rivalries that have emerged. Advocacy will be driven by the accelerating growth of customer power in the foreseeable future.

The key benefits of customer advocacy are:

Enhanced trust: advocacy increases customer loyalty because satisfied customers are more likely to be repeat buyers, and they are more likely to recruit their friends to buy as well.

Reduced new customer acquisition costs: Advocacy relies on word-of-mouth endorsements, and each customer will do more business because of the trust factor. Customers are also more likely to stay in an advocacy-based environment.

Higher profit margins: Greater trust means you can charge customers more because you can establish definitively that you are providing more value.

A foundation for future growth: Advocacy will help you diversity and expand your share of the customer’s wallet because you’ll be a trusted provider. This will facilitate up-selling and cross-selling opportunities.

Long-term competitive advantage: Advocacy is based around a consultative relationship. Instead of needing to guess what additional products customers want, you can ask them. This will allow you to develop future products that will be very successful. This relationship will be especially valuable when the commercial environment as a whole is turbulent.

Don’t Just Relate–Advocate

A Blueprint for Profit in the Era of Customer Power
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The best way to grow your business today is not to become better at marketing. Instead, learn how to become an advocate for your customers. If you can earn and then retain your customers’ trust, they will do more business with you in the future and will feel comfortable about encouraging their friends and associates to do likewise.

To genuinely act as an advocate, don’t just try and sell customers your own products and services. Instead, find out their actual needs and then sell them whatever is most appropriate, even if that means they end up buying the products or services offered by one of your direct competitors.

Customer power is growing exponentially–thanks to the unprecedented rise of the Internet–and you have to decide what to do about it. As customers get more data with which to make informed decisions, you can either build trust by embracing advocacy strategies or you can follow other firms who do this. If you don’t take the plunge and use advocacy advantageously, you will end up being an imitator as more and more markets become dominated by customer advocacy.

Acting as your customer’s advocate is the new imperative of the business world.

Evidence is building that the paradigm of marketing is changing from the push strategies suited to the last 50 years of mass media to relationship marketing and now to advocacy-based strategies. The new age of customer power drives this shift. Managers need to decide where their firm should be in the spectrum from push/pull to advocacy. There are advantages to being a first mover in this strategy space because when customers develop trust based on advocacy with a particular firm, they are not likely to quickly switch to a competitor. I predict advocacy will increasingly become the norm of behavior in the next ten years as the new paradigm becomes established and firms meet the threat (and opportunity) of growing customer power. This is a blueprint to profits in the era of customer power.

–Glen Urban

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