Customer Advocacy

With the increasing use of social media, the concept of customer advocacy is starting to have legs. The Gartner research group has reported that more than $1.2 billion is spent on loyalty programs in the US. They also suggest that more than 75% of consumers have at least one loyalty card and more than 1/3 of the shopping population has two or more loyalty cards.

The idea of customer advocacy is based on the notion that someone who espouses a product, service or company is an advocate. Some loyalty scales used in the market describe people who score high on satisfaction surveys as advocates. The bad news is creating an advocate may not necessarily follow a score on a satisfaction survey. We have not seen enough evidence to validate the fact that a high satisfaction score creates an advocate; however, it is fairly certain that an advocate should be very satisfied before that person starts advocating a product, service or company.

The good news is that WOM is relatively inexpensive. There is some interesting research that bears prominently on this advocacy topic. The research was published in the September, 2009 issue of the Journal of Marketing. The study was titled "Effects of Word-of-Mouth Versus Traditional Marketing: Findings from an Internet Social Networking Site." The major finding was that WOM has a much longer carryover period. This suggests that WOM will persist long after normal activities designed to increase customer loyalty. The technical description of the result is that WOM is about 2.5 times higher than the average advertising elasticity.

The bottom line is that companies should start to focus their programs toward WOM on social networking sites and reward customer advocacy behavior. The challenge is going to be how best to get customers to become advocates. We will be searching the market for successes in finding and tracking customer advocates on the social networking sites.