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.