What’s the most effective, cheapest, and in every case where I’ve measured it, the biggest marketing channel that will never feature in your ROI reports or marketing section of the board pack?
The answer is customer advocacy. In an age where consumers are constantly bombarded with advertisements, the trust in a recommendation from a peer stands apart. I’d like to unpack why this aspect of marketing is so significant.
Customer advocacy as a marketing channel
I’ve asked the ‘what did you do to start your research’ question many times in primary research in markets as diverse as dentists and cyber security software, and invariably a recommendation from a peer has been cited by about one-third of the respondents. As well as it just being common sense to seek recommendations from informed contacts when you are making a purchase for the first time, there is something deeply social in asking for, and giving a recommendation. A great recommendation builds relationship capital – and a poor one can damage it.
Now, pause for a moment and think about how much money your marketing team spends driving customer advocacy, versus say, running paid search ads or paying a team outbound SDRs to cold call prospects. The imbalance is often striking.
Why are customer referrals so important?
Customer referrals are incredibly effective. Why? Imagine customers talking to other customers in their own words, explaining how your product or service meets their needs. This interaction is imbued with trust, authenticity, and social drivers to take or make a recommendation. People trust the opinions of those they know and respect, making a customer referral far more potent than any commercial advertisement.
Some may be sceptical about whether paid ‘refer a friend’ schemes work. Certainly, in some categories, like Uber, they do, but for many these can devalue a recommendation. It might just be a British attitude, but my instinct is that it is normally more impactful to earn a recommendation than to buy it.
How can we measure customer advocacy?
The measure that I’ve seen used consistently to measure and improve customer advocacy is Net Promoter Score (NPS). While no measure is perfect, NPS has been by far the most correlated with the outcomes I’m trying to achieve.
I’ve been able to test this by comparing the lifetime value of customers with the Net Promoter Score response after their first experience of a product or service. This example from a client is typical – LTV is twice as higher when the score is 9 or 10 (promoters) or versus 3 or below.
How can we improve net promoter score?
Improving NPS is not just about numbers; it's about truly understanding customers and making their feedback central to your operations. Here's how businesses can embrace and operationalise NPS:
Make it visible: Display the scores and feedback prominently to keep them front and centre in your decision-making – in the board pack, in your weekly reports and at your townhalls. Improving customer advocacy is a whole-organisation effort. I’ve worked with a professional services firm where the delivery team was exceptionally client-focused, but the billing team chased invoices aggressively, leaving a bad impression with clients after an otherwise successful engagement.
Get into the detail: Look for patterns, identify areas of improvement, and never get complacent. Focus on the potential actions that you could take that will move the overall NPS the most – is it better to solve a moderately painful issue that impacts all customers or a severe issue that impacts just a handful. I’ve worked with more than one CEO who had all granular feedback from detractors (those scoring 6/10 or lower) sent directly to their email.
Consider where customer expectations may be mismatched: is it better to communicate differently and manage the expectations or solve the issue, for example response times to customer enquiries.
Never get complacent: until you reach 100%, there is always scope to increase NPS. Don’t be distracted by comparing yourself to Apple or Samsung! Also remember that there are just some natural variations in how likely the average person is to recommend a type of product or service – I’m much more likely to recommend a film than the cinema where I watched it.
Harness customers as advocates: The best businesses don't just measure and respond to customer feedback; they engage their customers as advocates, treating them well and thanking them. This could be a loyalty programme for B2C businesses, or a ‘user group’ / ‘client advisory group’ in B2B, where you get your most vocal client advocates together with select prospects.
Customer advocacy is not just a buzzword; it's a powerful force that can transform a company's reach and reputation. By understanding its importance, measuring it effectively with tools like NPS, and actively working to improve it, businesses can unlock sustainable growth. It's a human-centric approach that acknowledges the timeless truth that people trust people, making it a vital component of modern marketing strategy.
If you’d like to discuss how you can start to understand and increase customer advocacy, please Contact Me.
All views expressed in this post are the author's own and should not be relied upon for any reason. Clearly.