Search Results

An Ideal Customer Profile (ICP) is a description of the customers that you would most like to acquire for your business. In other words. If one more customer walked in the front door, brackets metaphorically). What do you want them to look like? The ICP is a more specific version of the long-used “target market” concept in marketing. The ICP, however, goes beyond demographic/firmographic information and can include customer problems, the triggers that have caused the customers to start considering a purchase, organizational structure, decision-making processes, and more. This level of specificity has become increasingly common for two reasons in my view: (i) digital marketing offering more precise targeting and segmentation options; and (ii) Customer Relationship Management (CRM) software, like Salesforce, allowing companies to gather more nuanced customer data, making it possible to build out detailed profiles. Both marketing and sales teams can use an ICP when setting up marketing activities and selecting target audiences, creating messaging and designing the customer journey. They can also help product and operations team to maximise the relevancy of your proposition and customer experience to your target customers. Your ICP should embody your collective understanding of your target customers and maximise your organisational alignment around meeting their specific needs. As organisations grow, many will develop multiple ICPs, perhaps for different product/service offerings or just for different use cases – but without an understanding of your ICP you risk low conversion, dissatisfied customers and poor retention. To read more about the problems of not having a specific enough ICP, I’d recommend reading this classic HBS case study. How to define an Ideal Customer Profile? There are three inputs to consider when defining an Ideal Customer Profile for your business. Think of these inputs as overlapping circles in a Venn Diagram: They are: “Likeability” – which customers are going to be worth the most to your business over time, because they spend the most and/or stay the longest? This is equivalent to their Customer Lifetime Value, which I’ve talked about previously. You need to dig into your headline analysis of customer lifetime value to understand which profiles lead to the highest LTV, to avoid falling into the Flaw of Averages. “Available targets” – this is the number of potential customers of any type that are available for your to target, which should be an output of a market & customer segmentation exercise. If possible, I like to think about this as the number of prospective customers who are likely to be ‘in-market’ at any given time, say within a year. For example, if the typical model for your product/service is a three year contract, than at most 1/3 of your prospective customers will be in-market in a single year. You also need to adjust for customers you have already won in any given segment. “Likelihood” – which prospective customers are most likely to convert, based on how well your product/service meets their needs, or in other words – solves their problem(s). Your ICP(s) should by identified by combining these three elements – think about it like an (illustrative) formula that you can use to estimate the potential value of an ICP: If you are starting out an exercise of thinking about defining your ICP, one approach is to create three options, each one maximising these three variables – the profile with the best LTV, the profile with the highest number of available customers, and the profile with the best conversion rate. Then think about the commonalities and differences between these profiles. This process is very iterative in my experience - sometimes you need to ‘pilot’ an ICP and go through a few rounds of ‘test and learn’. Signs that you’ve got the right ICP include improved new business performance, shortened sales cycles and improvements in customer satisfaction. One watch-out is that your ICP needs to be specific enough that it will exclude a reasonable proportion of the wider market. Without this level of specificity, your organisation won’t be able to make the trade-offs needed to truly meet the needs of the customers you are targeting. For example, if you are selling B2B, an ICP that describes a target company size of ‘50+ employees’ without an upper limit, is probably not specific enough. I’ve seen that reticence to be too specific can make the whole exercise a bit pointless. I’ve talked previously about both understanding customer lifetime value (LTV) and how you can create a market & customer segmentation to understand the number of potential customers that match a potential ICP – so let’s dig in a bit more on ‘likelihood’. The importance in understanding customer problems Let me share a personal example to illustrate the importance of understanding customer problems. I hit a very significant personal milestone recently, one that I’ve been working towards for nearly a year – Gold status with the Pizza Express loyalty programme. A culmination of many weekend trips with the children for pizza and pasta all over the UK. For me to be such a loyal customer, Pizza Express is clearly solving some problems for me. However, it isn’t the quality of the food alone that has driven my loyalty – sure the food is good, but living in London there are certainly some better options for Italian food close by. So what have they got right? For me, there are three problems they solve better than any other option: Speed – my children are impatient in the extreme (I don’t know where they get that from…). Pizza Express averages food and drinks for the kids on the table within ten minutes of being seated, which saves a lot of stress. I’m also able to pay on the app so there is no hanging around for the bill at the end of a meal. Consistency – my son in particular is an anxious eater. Knowing his food is going to look and taste the same at any Pizza Express location means he is relaxed throughout the experience. Availability – there are so many Pizza Express sites, that almost wherever we go we can find one nearby. This means that often it will be the first thing I look for when thinking about where to go for a family weekend lunch – I know it makes my life easier! Now these problems may be entirely different to that of other prospective customers, making Pizza Express less of a likely choice for them. But the proposition of Pizza Express is so well suited to solving my problems as a customer, they’ve won my loyalty. To stop thinking about food briefly, understanding the different problems that your prospective customers face is an essential part of selecting your ICP. Working out the profiles of customers for whom your current proposition is a ‘perfect fit’ can lead to higher conversion, shorter sales cycles, lower Cost Per Acquisition, higher customer retention and more customer advocacy. You should think through each aspect of what you offer your customers and how you deliver value to them. In the case of Pizza Express, it isn’t really the food that has differentiated them for me, but the service and scale. The same can be true in many commoditised markets – you might in theory offer the same product as your competitors, but you can still create meaningful differentiation through your service – for example by using technology to make your organisation faster or easier to work with for customers, or giving the customer more flexibility, choice, and control. Just think about Amazon as an example of this. Understanding customer problems is best achieved through talking to your customers – usually a combination of both qualitative and quantitative research. I always find it insightful to ask what is happening before a customer decided to start searching for businesses like yours e.g. a major life or business event. It is also important to understand what has made stay a customers. You can look at other internal data for example which profiles of customers convert the highest today, or move through your pipeline with the best velocity. I’ve created a checklist for customer research and to help you avoid the common mistakes I’ve seen people make when collecting and analysing customer research data. In summary Your Ideal Customer Profile is something that should run through the core of your organisation, shaping the choices you make at every single customer touchpoint. It is data-led, based on understanding your market & customer segmentation, drivers of customer lifetime value, and the customer problems you are setting out to solve. It is specific and prospectable – not just a pen portrait. You might have to iterate a few times to get it right. Leverage the power of an Ideal Customer Profile to align your organization, streamline your customer journey, and drive sustainable growth. If you’d like to discuss how you can create and use Ideal Customer Profiles in you business, please Contact Me. All views expressed in this post are the author's own and should not be relied upon for any reason. Clearly.

I’ve run more than fifty primary customer research exercises and have probably made every mistake there is to make. This is one of those tasks that seems simple on the surface but the devil is in the detail. I want to share my checklist that any marketer or strategy consultant should use when preparing to run customer research, focusing on online, quantitative surveys. This guide is intended for customer research to inform internal choices about strategy and tactics. If you are creating a survey to generate website content or PR coverage then some of the steps below may not apply – but I think most are helpful nonetheless. If you have any to add – please let me know, I’m sure that the list can always be improved. How to run great customer research Planning your survey Be clear on the hypotheses you’re looking to test and ties to specific questions to ensure you’ll get the answers you need. Helps to avoid surveys which are too long with sprawling logic Start with some small-scale qualitative research: a combination of one-to-one discussions and focus groups to inform questions and response options for your larger sample (expensive) quantitative research. I can highly recommend Kathryn Coles at White Rabbit Research for any focus groups you are looking to run. Don’t outsource the design of your survey script to an agency or someone who has never written customer research – crafting a survey script is a skilled job, and it is much harder to edit a lengthy script that you aren’t happy with. As a minimum, write the questions and a starting list of response options yourself. Targeting your survey When researching to understand customer acquisition behaviour, I normally exclude those customers whose last purchase is not within recent memory. Humans unfortunately have short memory spans for the finer details that you will be interested in capturing. The definition of ‘recent’ will broadly correlate with the significance of the purchase: e.g. the last week for purchasing a cup of coffee, but the last three years for selecting an ERP system. Target your survey at both customers and non-customers – this will provide invaluable context to the perspectives of your own customers. You’ll typically need to use a panel provider to reach non-customers. Decide the target sample size based on the statistical significance you aim to achieve and the number of ‘cross-tabs’ you want to analyse your data by. The rule of thumb is that for most businesses, where there is a large group of potential respondents (say more than 50,000), that you need a sample size of 380+ for a 95% confidence interval with a 5% margin of error – you can use one of many online calculators to help with this. If you want to introduce cross tabs then each subset of sample within the cross tab needs this sample size e.g. regional data, gender, age etc. That’s why most consumer surveys start at a sample size 2,000 eg to allow segmentation into five age groups when reviewing responses. If you are running a survey with senior B2B decision makers, I would be cynical about using large B2C-focused panel providers. Whilst they might ask their members about their job titles, they will do very little validation. I’ve seen panels with a surprisingly high proportion of Chief Executives! Instead you can use one of the expert network providers such as Third Bridge or GLG. You will pay a premium per respondent but I’ve found the quality to be much better. Designing your survey questions You will typically need a handful of screening questions at the start of any survey, to ensure that you are reaching your intended respondents. These are also an incredibly valuable way of understanding ‘incidence’ among the population. Make sure your panel provider sends out the survey to a representative sample, then when you ask a question like ‘do you own’ or ‘do you use’, the responses will give you a measure of incidence. As a bonus, many panel providers will not charge you for these initial screener questions. For many products or services, both B2B and B2C, include a screener question to confirm that the respondent was the decision maker in their business or household for the most recent purchase that you intend to ask about. Focus on actual, recent behaviour as opposed to expected behaviour/intentions – my own experience and lots of well documented research says that our ability to predict our own behaviours as humans is pretty limited and we end up giving the answers we think are expected. Ask open questions – in other words don’t lead the witness. This is a common issue I’ve seen with draft scripts. Avoid framing or anchoring in your question if you want valid answers. A fairly standard question that I include is around provider awareness and usage – a list of providers, with options for: ‘I’ve never heard of this provider’; ‘I’m aware of this provider but haven’t used them’; ‘I’ve used this provider in the past but not currently’; and ‘I’m a current customer of this provider’. Many survey scripts I see include questions about provider selection criteria – ‘why did you choose brand ABC’. These can be helpful, but I prefer to focus first on purchase triggers - ‘why did you decide to consider purchasing [product/service]’ - and initial research behaviour – ‘what did you do first to find potential providers of [product/service]’. As a marketer, I find these responses more actionable than selection criteria, which tend to be more about the product/service itself than the customer’s purchase journey. Linked to this, you can ask separate questions about why a customer has continued to purchase a product/service from the same provider. The reasons may well be different to those when they first purchased – including asking how hard the customer believes it would be to switch provider. I always include a Net Promoter Score question – for providers that the respondent has recent, direct experience of using. Make sure to follow this up to understand the reasons for high and low scores, and potentially also a free text field for ‘what would provider ABC have to change to achieve 10/10’. Use language your respondents will understand (and test this out) – avoid business jargon (even in B2B surveys) and include definitions for any terms there may be some ambiguity around. Designing your response options Ensure you provide a ‘mutually exclusive, collectively exhaustive’ (MECE) set of response options for respondents, in particular where you will ask them to choose just one response. This is where qualitative research can be a great front-runner to a survey to help inform your response options. Overlapping response options will cause confusion and result in poor responses. Include ‘I don’t know’ / ‘I don’t remember’ as options. You might get slightly fewer usable responses as a result, but you will get better quality responses by excluding guesses; and it is also an interesting datapoint to see whether respondents actually recall the detail you are asking about. When seeking sentiment-type responses (e.g. ‘agree’ vs ‘disagree’), use an even number of response options. When you have an odd number of response options, respondents tend to gravitate towards the middle, ‘neutral’ option as it is cognitively easier for them – remember than even in well-rewarded surveys, most users are trying to complete their responses as quickly as possible. Running your survey You will normally start by ‘soft launching’ your survey to a small set of respondents. Make sure to review the responses carefully, in particular any free text fields, to spot confusing questions, missing response options, and broken survey logic. When asking your question around provider awareness, include some spoof provider names (i.e. make them up) – this is a good way to subsequently exclude respondents who are speeding through the survey. Just do a quick online search to make sure you’ve not accidently come up with a real business name! Ensure you understand the true incentives for panel respondents and that these match with the length and complexity of the survey. If you underpay you risk getting poorer quality responses. A panel provider should be willing to provide this information, and you should be wary if they are not. Include a free text field at the end of your survey asking for any further comments or feedback. This is a useful way to find errors in the survey when you are soft launching. Customer research is an essential input to defining your customer acquisition strategy, and this checklist will help to ensure a smooth process and high quality output. If I've missed any items from your own checklist, please let me know. The one topic I've not covered here is how to test attitudes toward price in a survey, as that is worthy of a post by itself – watch this space. If you’d like to discuss how to run primary customer research for your business, please Contact Me. All views expressed in this post are the author's own and should not be relied upon for any reason. Clearly.

Have you been frustrated by conversions about pricing you’ve had as part of a Management team, or as an investor? Throughout my time as both a strategy consultant and investor, pricing strategy has been a topic that has fascinated me. Whilst I’ve had many conversations with Management teams about pricing, I believe that price has been consistently underutilised as a value creation lever. I’m planning to write a series of pieces on this topic, so I thought I’d start by introducing how I think about pricing, and why it seems so hard to focus on pricing strategy in SME businesses - not least when I still see TV ads for mobile phone contracts and broadband providers hiding a CPI + 3.9% annual price increase in the small print! Why is pricing an attractive value creation lever? There are five key reasons why price should be something that every CEO and investor thinks about when putting together a value creation plan: It can really move the needle - pricing changes rarely require additional costs, so a 1% price increase will be much more meaningful to profits than a 1% increase in volumes, all things being equal. My broadband provider hasn’t given me faster speeds after my 14% price increase earlier this year! There are typically multiple ‘quick win’ opportunities in SME businesses, who have rarely spent much time thinking about price until they start to consider institutional investment. A pricing opportunity review can be very evidence based. You can triangulate between historical customer data, external benchmarks, and primary research. Recommendations can often be proven in a small-scale pilot before being rolled out. There are many common pricing levers between different types of businesses, and consultants who have seen many examples of these working in practice. Such empirical evidence & predictability means that future investors may be willing to ‘pay’ for the benefits of a new pricing strategy even before it is fully implemented. Pricing as a value creation lever blends pure strategy, tactics, and execution – essentially there are lots of different sub-levers available, meaning that you have a high probability of identifying meaningful opportunities in a pricing review (at least enough to justify the effort of the review itself), even if they don’t come from the area you were initially expecting. Pricing is especially important in periods of high-cost inflation/macro-economic headwinds, when other sources of growth will be harder to come by (and potentially when customers are already primed to anticipate some pricing changes). Isn’t this just about increasing prices? Pricing is about much more than headline prices. In fact, I think of it about being about customer value, in other words understanding how customers derive ‘utility’ – value - from your product/service and matching up your pricing model to this. The perfect pricing model is one where every customer is paying the maximum they are willing to pay but not a penny more (otherwise in the long run they will all churn). As the saying goes – “some of your customers would have paid more, the challenge is working out which ones”. This is why at the heart of any pricing review should be a meaningful piece of customer research – to understand how much each aspect of your product/service is valued by different types of customers. As you start to break down your product/service offering into its constituent parts, you can uncover things that you may not even perceive as explicit features of your offering today. For example, having a named account manager, or a fast response to customer enquiries. These previously unrecognised features may be really valued by some of your customers (who are willing to pay more for them) and not at all by others (who risk feeling like they are over-paying) This is why many pricing projects focus on ‘packaging’ – how to create bundles that combine different aspects of your offering that are differentially priced, and appeal to different customer segments. The classic example is the ‘good, better, best’ ranges on supermarket shelves. A lot of pricing value creation can also happen without changing prices or packages at all, but rather by focusing on how your chosen pricing strategy is communicated and executed during the sales process. Are your sales team price getting as opposed to price setting? Pricing reviews often cover areas such as the use of discounts, the incentives of the sales team, or even the utilisation of existing contractual terms such as annual pricing reviews or volume limits. Why is it hard to change pricing? Given the multiple ways in which pricing can be used to create value, why can it be hard to convince Management teams to commit time and money to a pricing review? I think that the main reason is that pricing can be an intimidating subject, for a few reasons: It is often new and unknown for SME management teams (the flipside of there likely being multiple ‘quick win’ opportunities) It can feel ‘anti-customer’, which is particularly difficult to reconcile for founders who are often incredible customer advocates. This is a good spirit to retain so that you avoid pricing changes that might yield benefit in the short term but in the long run could be damaging – where they create an incentive for someone to start a lower-priced competitor business, or risk negative coverage of your brand. It can be hard to identify a single owner for pricing – should it sit with the Chief Financial Officer? The Chief Revenue Officer? The Chief Marketing Officer? A Head of Pricing? Recommendations can be hard to implement, especially when they involve changing the incentives and behaviour of a large sales team. It can be analytically complex, with techniques such as ‘Van Westendorp analysis’ and ‘Conjoint’ only adding to the complexity – and in my experience pricing consultancies can sometimes over-emphasise their analysis over the conclusions. As a result – many other value creation projects are prioritised over pricing, and money is left on the table. The most effective approach I’ve found to get past these objections are to frame a pricing review as a customer value project. If we get it right, most SMEs should be able to both increase pricing and increase (or at least maintain) customer satisfaction, as they will be better aligning our product/service offering with the customer’s willingness to pay. How can you spot potential pricing opportunities? This topic merits its own discussion but I think there are two areas I would start with when trying to build a case for investing time & money in a thorough pricing review: Ask some simple questions: Who is responsible for pricing in the management team? Have you increased prices in the past? What happened? Have you lost pitches, or customers, based on being too expensive? Do your standard contacts include routine (e.g., annual) price increases? Which parts of your product/service are most valued by customers? Run some simple analysis: How variable is customer profitability? If there is a lot of variability this could point to sub-optimal pricing What happened to customer retention after the most recent price change? What % of sales involve the highest discount % that salespeople are allowed to offer? How does your pricing and packaging benchmark vs competitors? This isn’t to say that you should copy your competitors, but it is helpful to understand the context in which a potential customer will be evaluating your pricing. For software businesses, review the product roadmap for features that are tied to specific price increases vs being included ‘for free’. These ideas are of course not exhaustive, but hopefully give you enough to at least start a conversation about pricing. If we keep focused on how a better understanding of customer value can yield both profitable growth and improved satisfaction, I believe that we will see more effective deployments of pricing as a value creation lever. If you’d like to discuss how to start identifying pricing opportunities for your business, please Contact Me. All views expressed in this post are the author's own and should not be relied upon for any reason. Clearly.

Compared to its importance in post-deal value creation and frequency of discussion around the board table, Customer Acquisition rarely receives much explicit due diligence (DD) pre-deal. As a topic, it will, of course, be discussed frequently by Management and potential investors. But the emphasis will typically be to appraise Management’s key assumptions and decide on inputs for the investment case model, rather than a deeper analysis of opportunities and risks. Commercial DD, which I have both written and commissioned many times, answers important questions about the size of the market opportunity for a target business, its competitive positioning and historical evolution, and might look at some of the underlying business drivers e.g., sales per rep and number of reps. However, there are rarely more than a handful of pages in a Commercial DD report that are dedicated to how sophisticated a business is in terms of customer acquisition and the resultant opportunities/risks. This suggests that there is a case for more consistent use of Customer Acquisition DD. Weighted against this is the fact that the number of DD reports is ever increasing, and these are in general more about understanding risk to inform appetite/pricing for an investment than uncovering opportunities. What I learned from my time as a partner in a Private Equity Fund is to position work on Customer Acquisition as a ‘future planning’ exercise as opposed to pure (risk-focused) DD. This can deliver outputs that are more usable by both investor and Management and be seen as a constructive exercise rather than a one-way interrogation as many other DD workstreams can seem from Management’s perspective. There were times when I was working alongside a deal team when an understanding of the customer acquisition opportunity was transformative to their appetite for a deal e.g., uncovering incredibly attractive unit economics that a Management team didn’t understand, or because we identified the potential for faster growth based on understanding the online competitive landscape and search volume trends. Other times it wasn’t as influential as value creation was more likely to be driven by M&A, but Management still found the work helpful, and it helped to ‘convert’ them to wanting to partner with us. What does Customer Acquisition Due Diligence include? The scope of Customer Acquisition Due Diligence is likely to vary based on the sector, business model, and current go-to-market approach of a target business, but will typically include: An assessment of the go-to-market strategy – is there a clear strategy, is there Management alignment behind it, and how well this is put into practice? Specific topics can include: Target customers / Ideal client profile Proposition – what problem are we solving for our customers Marketing channels used to generate demand. Approach to pricing and packaging Sales model e.g., online conversion, inside sales, enterprise sales etc. An assessment of the operational platform across marketing & sales – Roles, responsibilities, and org structure, Data – in particular the measurement of marketing effectiveness and attribution Use of tech tools to run the business and serve customers. Processes / ways of working, including the use of automation. Effective use of third parties An understanding of where Management sees the opportunities and risks related to Customer Acquisition A robust view on the starting unit economics, specifically the LTV:CPA ratio – can we afford to spend more per acquired customer, do we have a leaky bucket problem (i.e., high churn)? This is rarely something that will exist even if a superficial analysis has been undertaken as part of the investment process. ‘Flow’ market data vs ‘stock’ – it is important to understand the target’s share of clients who are looking to purchase e.g., in any given year, not just their overall share of the market as would be included in the Commercial DD. One approach to this for businesses selling online is to complete a search headroom analysis, perhaps supplemented with primary research. Competitor approach to customer acquisition – sophisticated competitors will translate to a higher cost of accelerating customer acquisition. Overall, we are looking at how well the target business has created / understands its own growth flywheel and what the potential is to get this moving faster. In a mid-sized, growing business there will be many areas that could be developed further, but do the Management team focus on the areas that will move the needle fastest? Are they willing to try new things but rigorous in understanding what is working/not working? How can you make Customer Acquisition Due Diligence worthwhile? This sort of work should always come out with a small number of high impact recommendations – sometimes on the strategy, sometimes on the platform, sometimes on the people. I’d suggest forcing that list to be small to surface those opportunities that could play the most significant role in value creation. These outputs should be fully quantified to make them suitable to include in an investment case model – including relevant metrics such as the number of new customers, revenue, margins, acquisition costs, team costs etc. Concluding that there aren’t any straightforward ways to accelerate customer acquisition is also a very valuable finding. I learned early in my time as an investor that sometimes there could be theoretical scope for improvement but that was unlikely to create much value – either because it was too stretching for the Management team, or because other value creation levers such as M&A were simply a better fit (several months trying to drive online lead gen in a very traditional telecoms business was a real learning curve). A lot of the value from Customer Acquisition DD comes from pattern recognition. Where assessing the current approach of a target business, I rely on a picture built over time of what the best performing, comparable businesses had achieved so can make a relative judgement. I always seek to leverage the knowledge of others who have direct operating experience in a particular market e.g., to sense-check specific metrics or business practices, from the investor’s existing portfolio, my network or using an expert network. As well as supporting the ‘conversion’ of the Management team, I also found that by approaching the work as a ‘future focused’ exercise, it is sometimes possible to access data that other potential acquirers may not have asked for. I try to offer to share findings with a target Management team whether the deal happens or not as a quid pro quo. Even a modest information advantage in a competitive auction process is worth having! Perhaps unsurprisingly, I think there is enough evidence that Customer Acquisition Due Diligence can play a valuable role in the investment process, whether led by an in-house value creation team or by a third party – but its value is multiplied if it is positioned as growth/future focused. I probably wouldn’t even call it Due Diligence! A good piece of work up-front can be a great foundation to kick-start value creation post-deal. If you’d like to discuss how you can approach Customer Acquisition Due Diligence, please Contact Me. All views expressed in this post are the author's own and should not be relied upon for any reason. Clearly.

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.

Have you ever read the marketing section of your board pack month after month, read a long description of activities, but been unimpressed by the lack of any meaningful change in lead generation? You may be observing ‘Spray and Pray Marketing’ - a phrase that I find myself using to describe an approach to marketing that I think is generally to be avoided. As tends to be the case with English idiom, we rarely stop and think about the deeper meaning of such phrases and sitting on a train recently I tried to break it down and give it a proper definition that might be helpful to non-marketers. The phrase itself I believe has militaristic origins, referring to the use of automatic weapons without any sense of trying to aim, in the hope that at least one bullet hits the target. That feels like a good analogy for my understanding of ‘Spray and Pray Marketing’ but let’s take it apart. The ‘Spray’ This refers to marketers running a wide range of different activities, poorly targeted, poorly coordinated, with limited depth (unless you have an unlimited marketing budget). This is a problem because the ‘costs’ (time & money) to set up each individual marketing activity are often understated, as are the frictions introduced by task switching and greater complexity (e.g., creative/content across multiple channels, formats etc). To be clear, this is not about avoiding well-co-ordinated, multi-channel campaigns, but rather avoiding trying ‘a little bit of everything’. The “Pray” This refers to the lack of data to underpin the choice of marketing activities, and to the lack of robust measurement of outcomes. This is the big difference to the militaristic origins of the phrase – as well as not aiming very well, the ‘Spray and Pray’ marketer doesn’t even know if they hit the target at the end of the day. I also think about this as referring to situations where there is a suboptimal or disjointed customer journey that we expect prospects to go on e.g., lots of tube ads but only a ‘contact us’ form on the website – our marketing could be effective in driving demand, but we have no hope of achieving conversions. What is the problem with this approach? There are some situations where a ‘Spray’ approach might be acceptable – for example for a brand-new business that wishes to test & learn, or for a business entering a new category. But in my opinion, the ‘Pray’ aspect of this approach is to be avoided altogether! The consequence of ‘Spray and Pray’ is that our marketing activities are shallow (we just attend one trade show rather than a series, send just one direct mailshot, or only let digital ads run for a week) and we don’t have reliable measurement, so don’t really learn whether it works or not. It can quickly become a vicious cycle of constantly repeating the same activities in the hope that something might be different. As marketers we should aspire to get the right message, to the right people, at the right time, in the right medium. When we ‘Spray and Pray’ we are certain to get at least one of these wrong and potentially all of them! So why does it happen? There are some basic human factors at play in many cases. Marketers can feel a huge pressure to show ‘activity’ to their Management team colleagues – a new campaign, media coverage, ads visible online. Given the short average tenure of marketing leaders, the pressure of the sword of Damocles can lead to activity at the expense of thinking through the strategy and targeting that I’ve described. However, I think that the most common reason for this approach to marketing is that lack of a robust approach to measurement, that the marketer uses to make decisions. Perhaps even deeper than that a lack of commerciality. It is ultimately bad business to try multiple different marketing activities and have no idea which ones have worked. Most successful businesses I’ve worked with do just 2 or 3 things expertly – and that expertise can come from spending a long time testing and learning in each area, building institutional knowledge and individual skills. I’d recommend asking your marketing leader this one question to start testing this in your business. You can tell when you are doing ‘Spray and Pray’ when there isn’t an evidence-based hypothesis behind activities, when your small marketing team seems to be doing a hundred different things rather than 2 or 3. If you’d like to discuss how to refine your marketing strategy, please Contact Me. All views expressed in this post are the author's own and should not be relied upon for any reason. Clearly.