Customer advocacy, brand passion, and linkage (customer-brand bonding)

1. Revisiting the Focus of Customer
Research:
Linking Customer Behavior and
Brand Perception with Business
Outcomes
Presented by
Michael W. Lowenstein, Ph.D., CMC
Executive Vice President
Market Probe

2. About the Presenter
• Executive Vice President of Market Probe
• Over 35 years management and consulting experience;
passionate about stakeholder behavior measurement
• M.B.A. in marketing, organizational management
• B.S. degree in economics and marketing
• Ph.D. in strategy, program development, and program
management
• Author of 150+ articles and white papers, and several
customer-centric marketing books, including –
– Customer Retention (1995); The Customer Loyalty
Pyramid (1997); Customer WinBack (2001), One
Customer, Divisible (2005), and…
– The Customer Advocate and the Customer Saboteur
(2011): Linking Social Word-of-Mouth, Brand Impression,
and Stakeholder Behavior
2

3. Market Probe: A Global Research Partner
Toronto
Chicago
Milwaukee
St. Louis
New York Metro
Portland
UK Belgium
Dubai
Bangalore
Mumbai
New Delhi
Beijing
SingaporeSingapore
Beijing
Hong Kong
 Market Probe is a global market research group with offices in nine countries
across North America, Asia, the Middle East and Europe; partners in Russia,
Poland, Saudi Arabia and Latin America
 Over 300 full-time global staff
 In-house support for global field services with ability to connect with hard to
reach decision-makers, innovative ideas, technology platforms and marketing
analytics to develop insights
3

4. Expertise in Stakeholder Research
 27 Years of Specialization in Customer Experience
Management
 Quality; Satisfaction; Value; Loyalty; NPS;
Advocacy, Brand Passion
 Diverse Industry Engagements
 Research and Development Orientation
 Corporate Commitment to Building “Knowledge”
and Actionability
 Proprietary Models (Advocacy; Loyalty, Brand
Passion) for Strategic Applications
 Published Books and Papers on Customer
Satisfaction and Loyalty (www.asq.org)
 Won Several Best Paper Awards at Global Research
and Industry Forums
4

5. A Conceptual Framework
Customer
Experiences
Customer
Relationship
with
Supplier/Brand
Retention Rate
Share of Wallet
New Client Acquisition
Business Outcomes
Value Touchpoints
Brand Staff
What is the right construct
to measure relationship?
Develop
Insights
Measure Customer
Attitudes, Emotions
and Behavior
5

6. Strong emotional connections with your brand or
business
Strong supporters of your brand in their online and
offline communications
Customers who have -
Customers who are -
AND
6

7. They are your best customers
They are loyal, buy more products from you or
exclusively use your brand
They are your unpaid sales force
They are the strongest promoters of your brand
They respond to your marketing efforts
7

8. • Grow Revenue
• Position Brand
• Increase Share
• Decrease Risk
The Impact of Customer Influence has Pushed the
Strategic Relevance of Advocacy
Assessing customer relationship has its genesis in quality assessment. Realization
that quality alone does not generate a satisfied customer.
Satisfaction gets to some of the intangible dimensions of the relationship, but is a
passive measure and does not explain nor predict retention.
Embrace customer retention to the framework, but it does not
capture the influence customers have on “other” customers and
partners.
Advocacy captures the influence the
customer and partner base have, in addition
to measures below.
80s:
Quality
90s:
Satisfaction
Late 90s:
Loyalty
Current:
Advocacy
8

9.  What is the return on
customer investment?
 Where is the brand’s
competitive advantage
based on enhanced
customer experiences?
 Are we measuring the
right customer attitudes
and behaviors?
 Can the metrics help us
make key decisions and
allocate resources for our
business?
Accountability
Relevancy
Most customer satisfaction research programs today come under two
types of pressures:
Accountability and Relevancy
9

10. The Role of Customer Advocacy
In marketing and services decision-making guidance and ‘how-to’
action, including…
 Marketing and Communications Planning and
Engagement Media Effectiveness
 Customer Service/Touchpoint/Process Experience
Effect
 Company Image and Reputation Impact
 Product and Service Development
 Customer Relationship Building
 Brand Messaging and Positioning Assessment
 Loyalty Program Development/Refinement
 Customer Life Cycle Optimization
10

11. Understanding Customer Advocacy
The concept of customer advocacy is used to mean different , but related, behaviors to different
organizations. Market Probe is the first research company to operationalize the Advocacy construct
and test it globally for advancing customer satisfaction research. Our Advocacy Framework
segmentation and analysis offers:
 The best understanding of customer loyalty behavior for your brand or business
 Strategic segmentation of your customer base to focus on your best customers and reduce
the damage to your brand from your Alienated customers
 The most direct linkage to business performance, and improvement opportunities
Also, it is critical to note that:
Advocacy is NOT Recommendation
Advocacy is NOT Loyalty
Advocacy is NOT Word-of-Mouth
Advocacy is NOT Referral
Advocacy is NOT Promotion
Advocacy Is Much More!
11

12. How Is Customer Advocacy Measured?
Market Probe is the first customer research organization to operationalize
Advocacy behavior in customer satisfaction research. Multiple questions are asked in a
customer feedback survey and customer responses to these scaled items are used to
classify them into four Advocacy groups and set the basis for in-depth analytical
insights. A full scale Advocacy battery includes:
 Customer favorability of brand
 Future consideration
 Intensity of brand support
 Use of online and offline
social networks
 Positive and negative buzz
 Distribution of most recent
purchases
12

13. Positive and Negative Things Said
Past Six Months
Total
Software
Positive Said 5.7 6.4 5.2 4.4
Negative Said 4.3 4.5 2.9 3.2
Total
Software
Positive Said 8.2 10.6 6.7 8.7
Negative Said 0 0 0 0
An advocating customer speaks positively about their experience
and perception of the brand.
Advocates
Total Population
13

14. Customer Advocacy as a
Segmentation Device, a Key
Performance Metric,
and Organizational
Management Model
14

15. What is an Advocacy Classification?
Based on the level of customer involvement in your brand, as
identified in Market Probe’s advocacy framework, your customers
can be segmented into four behaviorally distinct groups:
Advocate Strong customer
involvement
Highest levels of favorability and future
consideration, creates positive buzz for
the brand
Allegiant Moderate customer
involvement
Reasonable levels of favorability, future
consideration and brand support
Ambivalent Weak customer
involvement
Below average levels of brand favorability
and future consideration and weak brand
support
Alienated Weak to negative
customer involvement
Low brand favorability; prefer competitive
options and creates negative buzz for the
brand
15

16. 16
Most satisfaction research deals with customer retention and ignores share
of wallet, risk, and new client acquisition in their linkage research.
Advocacy impacts all of these.
0%
15%
30%
45%
60%
25%
12%
10%
13%
27%
37%
35%
40%
46%
33%
50%
59%
2.5%
3.7%
5.4%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
0%
15%
30%
45%
60%
AdvocateAlienated
Share of Wallet Customer Retention New Client Growth
Bank A Bank B Bank C

17. Impact of Advocacy Improvement Through Service
Quality: Case Study of a B2B Client
30%
40%
50%
60%
70%
5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Percentage of Advocates
Share of
Wallet
Retention
ShareofWallet/Retention
Current ABC Bank
Performance (22%)
Achievable Target Over
Next 3 yrs (28%)
17

18. What is Market Probe’s Advocacy Ladder?
The Advocacy Ladder is a pictorial representation of a company’s customer base into
Advocacy segments.
Advocate
Allegiant
Ambivalent
Alienated
The best customers of your
brand. You need to engage
them.
Implement customer
experience improvements to
move them to Advocates.
Implement customer
experience improvements to
move them up the Advocacy
Ladder.
Implement customer
experience improvements to
reduce the Alienated group.
Move up the
Advocacy Ladder Project Deliverables of
Advocacy Analysis
and Modeling
18

19. 10%
14%
17%
15%
22%
5%
1%
6%
12%
Staff always takes
the time to talk with me
I have an open and
honest relationship with the
people at my bank
Staff proactively suggests products
and strategies that will help me
Staff suggests only those
products that are best for me
Staff follows up with
information as needed
Staff delivers service
in a timely manner
Staff are trained to offer
reliable services
Staff appears competent
and knowledgeable
Staff makes me feel like
a valued customer
24%
21%
14%
1%
Alienated Advocate
Critical to Reducing Alienated Critical to Building Advocates
13%
13%
9%
6%
1%
Advocacy Driver Analysis
Swing up and swing down analysis identifies the performance attributes that will
drive customers from Alienated to Ambivalent, Ambivalent to Allegiant, Allegiant to
Advocate.
Analysis repeated for
brand, product and
key touch point
attributes for input
into an overall
improvement action
plan.
Quality of Staff Services
19

20. Relationship Attributes for B2B Services Company
Swing Up (to Advocate)/ Swing Down (to Alienated)
20

21. Advocacy Segmentation: Profile of Attitudes
(Top Two Box Ratings)
Critical Attribute
(Scale: 1 – 10; 9 and 10 Are Top Boxes)
Advocate Allegiant Ambivalent Alienated
Brand
Has earned my trust and confidence 81 28 6 2
It is a pleasure to do business with them 78 22 5 1
The bank is definitely for people like me 79 26 7 2
Staff
Staff makes me feel like a valued customer 75 22 8 2
Staff are trained to offer reliable services 71 20 7 3
Staff follows up with information as needed 71 18 5 2
Value Proposition
Breadth of checking and savings accounts offered 62 13 4 1
Variety of cards with different features suitable to you 53 11 4 1
Communication of different products and their features 60 13 3 1
21

22. Advocacy Applied to
Customer Life Cycle
Evaluation:
Defected B2B Customer
Advocacy-Based Research
Example
22

23. Price is the most frequently
stated reason for defection.
 Changes in business focus also fuel
discontinuation.
 Though content is also mentioned, a
closer look at the verbatim
comments indicate that most often
a business focus change rendered
the content less meaningful, rather
than a dissatisfaction with the
content itself.
Reasons for Defection
23

24. 3%
10%
5%
6%
3%
36%
2%
1%
4%
6%
2%
1%
6%
15%
3%
1%
18%
2%
2%
2%
19%
2%
1%
4%
23%
2%
18%
2%
Customer service
Timeliness of information
Usefulness of product delivery method
Product quality
Information content’s relevance to your needs
Competitiveness of pricing
Billing accuracy
Timeliness of problem resolution
Licensing requirements
Ease of doing business
Reputation
Market Leadership
Understanding of your data/information needs
Customer focus
Building Customer Advocacy and
Reducing Alienation
24

25. Concluding Advocacy Value Message
“The benefits of building advocacy can’t be ignored. Satisfaction and
loyalty are important, but they’re old news. It’s a new dawn in
customer experience strategy, where the customer controls over 50
percent of the brand message. Forward thinking companies will be
the ones that identify and work with their customer advocates to
genuinely build trust in the brand, the customer base, and the
bottom line.”
Cultivating Customer Advocates: More Than
Satisfaction and Loyalty
2011 Peppers & Rogers Group White Paper
25

26. Brand Passion Basic
Premises
26

27. Passion is Not Just a Consumer or
Regional Phenomenon
“B2B isn't as rational as you'd think. Research in
eight European countries found that B2B customer
needs were both functional and emotional.”
Michael Dent, General Manager, Marketing DHL Express (UK)
Passion (Emotion, Harmony, Attachment) is created by brands
In all industries, geographies and buying sectors.
27

28. 0% 5% 10% 15% 20%
Reduces security risks
Ensures my
personal success
Invests in the future
to be a leader
Preferred for organizations
like mine
Price/cost fair
relative value
Company I trust
Reliable support/
customer care
Clear technology
roadmap
Drivers of Passion for HP
28

29. A Tale of Two Technology Giants
IBM HP
29

30. 30

31. Brand Passion and
Customer Advocacy
Linkage
31

32. What happens when Advocacy and Passion
come together in the same person?
32

33. 33
Total Combustion!

34. Market Probe 2012 Bank Monitor
Word of Mouth
(Preliminary Results – Confidential)
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
Top 2 Box on
OSAT
Loyal Promoters Advocates Excited Excited Advocates
2.76
3.24
2.98
5.53
3.87
6.13
1.93
2.25
2.10
2.60 2.66
3.01
Positive Buzz Expressed Positive Buzz Heard
34

35. Market Probe 2012 Bank Monitor
Assets
(Preliminary Results – Confidential)
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
Top 2 Box on
OSAT
Loyal Promoters Advocates Excited Excited
Advocates
$10,439 $9,666 $11,998 $14,535 $11,889
$16,045
$18,642 $20,581
$19,942
$21,707
$21,138
$23,735
$36,676 $34,458 $31,986
$35,437
$35,373
$39,832
Investments Balance Deposits Balance Loan Balance
$71,679
$65,757 $64,705 $63,926
$68,400
$79,612
35

36. Grocery Example – Single Market, Cross Brands
(Preliminary Results – Confidential)
$210
$220
$230
$240
$250
$260
$270
$280
$290
Promoters Advocates Excited Excited Advocates
$236
$266
$243
$281
Average 30-Day Spend
36

37. Market Probe is in the early stages of analyzing key linkages between Customer Advocacy
and Brand Passion, and unlocking the drivers and business results when a customer is both
Excited about a brand as well as an Advocate. This research is unique to, and original
with, Market Probe. Per the previous several graphics, results identified thusfar are
extremely powerful from business outcomes, marketing, branding, and communications
perspectives.
We anticipate that, going forward, similar results for linkage analyses will be realized in ways
similar to those we have experienced in B2B and B2C Brand Passion and Customer Advocacy
studies conducted around the world.
Detailed linkage results will shortly be published, and presented at major conferences in
U.S., Canada, EMEA, and Asia.
37
New Analytical Investigation

38. To learn more - -
• About Market Probe’s work –
– Check out the book: The Customer Advocate and
the Customer Saboteur
– You can find the book on ASQ’s Store, at
www.qualitypress.org – item H1410
– Look for 2010/2011 advocacy articles on
CustomerThink (www.customerthink.com)
• Or connect via -
– T: 414-530-5422
– m.lowenstein@marketprobe.com
– www.marketprobe.com
• About the topic through ASQ –
– Search ASQ’s Knowledge Center
@ http://asq.org/knowledge-center/
Thank you!