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Market probe barcelona presentation


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

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Market probe barcelona presentation

  1. 1. Revisiting the Focus of CustomerResearch:Linking Customer Behavior andBrand Perception with BusinessOutcomesPresented byMichael W. Lowenstein, Ph.D., CMCExecutive Vice PresidentMarket Probe
  2. 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 programmanagement• Author of 150+ articles and white papers, and severalcustomer-centric marketing books, including –– Customer Retention (1995); The Customer LoyaltyPyramid (1997); Customer WinBack (2001), OneCustomer, Divisible (2005), and…– The Customer Advocate and the Customer Saboteur(2011): Linking Social Word-of-Mouth, Brand Impression,and Stakeholder Behavior2
  3. 3. Market Probe: A Global Research PartnerTorontoChicagoMilwaukeeSt. LouisNew York MetroPortlandUK BelgiumDubaiBangaloreMumbaiNew DelhiBeijingSingaporeSingaporeBeijingHong Kong Market Probe is a global market research group with offices in nine countriesacross 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 toreach decision-makers, innovative ideas, technology platforms and marketinganalytics to develop insights3
  4. 4. Expertise in Stakeholder Research 27 Years of Specialization in Customer ExperienceManagement 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, BrandPassion) for Strategic Applications Published Books and Papers on CustomerSatisfaction and Loyalty ( Won Several Best Paper Awards at Global Researchand Industry Forums4
  5. 5. A Conceptual FrameworkCustomerExperiencesCustomerRelationshipwithSupplier/BrandRetention RateShare of WalletNew Client AcquisitionBusiness OutcomesValue TouchpointsBrand StaffWhat is the right constructto measure relationship?DevelopInsightsMeasure CustomerAttitudes, Emotionsand Behavior5
  6. 6. Strong emotional connections with your brand orbusinessStrong supporters of your brand in their online andoffline communicationsCustomers who have -Customers who are -AND6
  7. 7. They are your best customersThey are loyal, buy more products from you orexclusively use your brandThey are your unpaid sales forceThey are the strongest promoters of your brandThey respond to your marketing efforts7
  8. 8. • Grow Revenue• Position Brand• Increase Share• Decrease RiskThe Impact of Customer Influence has Pushed theStrategic Relevance of AdvocacyAssessing customer relationship has its genesis in quality assessment. Realizationthat quality alone does not generate a satisfied customer.Satisfaction gets to some of the intangible dimensions of the relationship, but is apassive measure and does not explain nor predict retention.Embrace customer retention to the framework, but it does notcapture the influence customers have on “other” customers andpartners.Advocacy captures the influence thecustomer and partner base have, in additionto measures below.80s:Quality90s:SatisfactionLate 90s:LoyaltyCurrent:Advocacy8
  9. 9.  What is the return oncustomer investment? Where is the brand’scompetitive advantagebased on enhancedcustomer experiences? Are we measuring theright customer attitudesand behaviors? Can the metrics help usmake key decisions andallocate resources for ourbusiness?AccountabilityRelevancyMost customer satisfaction research programs today come under twotypes of pressures:Accountability and Relevancy9
  10. 10. The Role of Customer AdvocacyIn marketing and services decision-making guidance and ‘how-to’action, including… Marketing and Communications Planning andEngagement Media Effectiveness Customer Service/Touchpoint/Process ExperienceEffect Company Image and Reputation Impact Product and Service Development Customer Relationship Building Brand Messaging and Positioning Assessment Loyalty Program Development/Refinement Customer Life Cycle Optimization10
  11. 11. Understanding Customer AdvocacyThe concept of customer advocacy is used to mean different , but related, behaviors to differentorganizations. Market Probe is the first research company to operationalize the Advocacy constructand test it globally for advancing customer satisfaction research. Our Advocacy Frameworksegmentation 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 reducethe damage to your brand from your Alienated customers The most direct linkage to business performance, and improvement opportunitiesAlso, it is critical to note that:Advocacy is NOT RecommendationAdvocacy is NOT LoyaltyAdvocacy is NOT Word-of-MouthAdvocacy is NOT ReferralAdvocacy is NOT PromotionAdvocacy Is Much More!11
  12. 12. How Is Customer Advocacy Measured?Market Probe is the first customer research organization to operationalizeAdvocacy behavior in customer satisfaction research. Multiple questions are asked in acustomer feedback survey and customer responses to these scaled items are used toclassify them into four Advocacy groups and set the basis for in-depth analyticalinsights. A full scale Advocacy battery includes: Customer favorability of brand Future consideration Intensity of brand support Use of online and offlinesocial networks Positive and negative buzz Distribution of most recentpurchases12
  13. 13. Positive and Negative Things SaidPast Six MonthsTotalSoftwarePositive Said 5.7 6.4 5.2 4.4Negative Said 4.3 4.5 2.9 3.2TotalSoftwarePositive Said 8.2 10.6 6.7 8.7Negative Said 0 0 0 0An advocating customer speaks positively about their experienceand perception of the brand.AdvocatesTotal Population13
  14. 14. Customer Advocacy as aSegmentation Device, a KeyPerformance Metric,and OrganizationalManagement Model14
  15. 15. What is an Advocacy Classification?Based on the level of customer involvement in your brand, asidentified in Market Probe’s advocacy framework, your customerscan be segmented into four behaviorally distinct groups:Advocate Strong customerinvolvementHighest levels of favorability and futureconsideration, creates positive buzz forthe brandAllegiant Moderate customerinvolvementReasonable levels of favorability, futureconsideration and brand supportAmbivalent Weak customerinvolvementBelow average levels of brand favorabilityand future consideration and weak brandsupportAlienated Weak to negativecustomer involvementLow brand favorability; prefer competitiveoptions and creates negative buzz for thebrand15
  16. 16. 16Most satisfaction research deals with customer retention and ignores shareof 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 GrowthBank A Bank B Bank C
  17. 17. Impact of Advocacy Improvement Through ServiceQuality: Case Study of a B2B Client30%40%50%60%70%5% 10% 15% 20% 25% 30% 35% 40% 45% 50%Percentage of AdvocatesShare ofWalletRetentionShareofWallet/RetentionCurrent ABC BankPerformance (22%)Achievable Target OverNext 3 yrs (28%)17
  18. 18. What is Market Probe’s Advocacy Ladder?The Advocacy Ladder is a pictorial representation of a company’s customer base intoAdvocacy segments.AdvocateAllegiantAmbivalentAlienatedThe best customers of yourbrand. You need to engagethem.Implement customerexperience improvements tomove them to Advocates.Implement customerexperience improvements tomove them up the AdvocacyLadder.Implement customerexperience improvements toreduce the Alienated group.Move up theAdvocacy Ladder Project Deliverables ofAdvocacy Analysisand Modeling18
  19. 19. 10%14%17%15%22%5%1%6%12%Staff always takesthe time to talk with meI have an open andhonest relationship with thepeople at my bankStaff proactively suggests productsand strategies that will help meStaff suggests only thoseproducts that are best for meStaff follows up withinformation as neededStaff delivers servicein a timely mannerStaff are trained to offerreliable servicesStaff appears competentand knowledgeableStaff makes me feel likea valued customer24%21%14%1%Alienated AdvocateCritical to Reducing Alienated Critical to Building Advocates13%13%9%6%1%Advocacy Driver AnalysisSwing up and swing down analysis identifies the performance attributes that willdrive customers from Alienated to Ambivalent, Ambivalent to Allegiant, Allegiant toAdvocate.Analysis repeated forbrand, product andkey touch pointattributes for inputinto an overallimprovement actionplan.Quality of Staff Services19
  20. 20. Relationship Attributes for B2B Services CompanySwing Up (to Advocate)/ Swing Down (to Alienated)20
  21. 21. Advocacy Segmentation: Profile of Attitudes(Top Two Box Ratings)Critical Attribute(Scale: 1 – 10; 9 and 10 Are Top Boxes)Advocate Allegiant Ambivalent AlienatedBrandHas earned my trust and confidence 81 28 6 2It is a pleasure to do business with them 78 22 5 1The bank is definitely for people like me 79 26 7 2StaffStaff makes me feel like a valued customer 75 22 8 2Staff are trained to offer reliable services 71 20 7 3Staff follows up with information as needed 71 18 5 2Value PropositionBreadth of checking and savings accounts offered 62 13 4 1Variety of cards with different features suitable to you 53 11 4 1Communication of different products and their features 60 13 3 121
  22. 22. Advocacy Applied toCustomer Life CycleEvaluation:Defected B2B CustomerAdvocacy-Based ResearchExample22
  23. 23. Price is the most frequentlystated reason for defection. Changes in business focus also fueldiscontinuation. Though content is also mentioned, acloser look at the verbatimcomments indicate that most oftena business focus change renderedthe content less meaningful, ratherthan a dissatisfaction with thecontent itself.Reasons for Defection23
  24. 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 serviceTimeliness of informationUsefulness of product delivery methodProduct qualityInformation content’s relevance to your needsCompetitiveness of pricingBilling accuracyTimeliness of problem resolutionLicensing requirementsEase of doing businessReputationMarket LeadershipUnderstanding of your data/information needsCustomer focusBuilding Customer Advocacy andReducing Alienation24
  25. 25. Concluding Advocacy Value Message“The benefits of building advocacy can’t be ignored. Satisfaction andloyalty are important, but they’re old news. It’s a new dawn incustomer experience strategy, where the customer controls over 50percent of the brand message. Forward thinking companies will bethe ones that identify and work with their customer advocates togenuinely build trust in the brand, the customer base, and thebottom line.”Cultivating Customer Advocates: More ThanSatisfaction and Loyalty2011 Peppers & Rogers Group White Paper25
  26. 26. Brand Passion BasicPremises26
  27. 27. Passion is Not Just a Consumer orRegional Phenomenon“B2B isnt as rational as youd think. Research ineight European countries found that B2B customerneeds were both functional and emotional.”Michael Dent, General Manager, Marketing DHL Express (UK)Passion (Emotion, Harmony, Attachment) is created by brandsIn all industries, geographies and buying sectors.27
  28. 28. 0% 5% 10% 15% 20%Reduces security risksEnsures mypersonal successInvests in the futureto be a leaderPreferred for organizationslike minePrice/cost fairrelative valueCompany I trustReliable support/customer careClear technologyroadmapDrivers of Passion for HP28
  29. 29. A Tale of Two Technology GiantsIBM HP29
  30. 30. 30
  31. 31. Brand Passion andCustomer AdvocacyLinkage31
  32. 32. What happens when Advocacy and Passioncome together in the same person?32
  33. 33. 33Total Combustion!
  34. 34. Market Probe 2012 Bank MonitorWord of Mouth(Preliminary Results – Confidential) 2 Box onOSATLoyal Promoters Advocates Excited Excited Advocates2.763.242.985.533.876.131.932.252.102.60 2.663.01Positive Buzz Expressed Positive Buzz Heard34
  35. 35. Market Probe 2012 Bank MonitorAssets(Preliminary Results – Confidential)$0$10,000$20,000$30,000$40,000$50,000$60,000$70,000$80,000Top 2 Box onOSATLoyal Promoters Advocates Excited ExcitedAdvocates$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$39,832Investments Balance Deposits Balance Loan Balance$71,679$65,757 $64,705 $63,926$68,400$79,61235
  36. 36. Grocery Example – Single Market, Cross Brands(Preliminary Results – Confidential)$210$220$230$240$250$260$270$280$290Promoters Advocates Excited Excited Advocates$236$266$243$281Average 30-Day Spend36
  37. 37. Market Probe is in the early stages of analyzing key linkages between Customer Advocacyand Brand Passion, and unlocking the drivers and business results when a customer is bothExcited about a brand as well as an Advocate. This research is unique to, and originalwith, Market Probe. Per the previous several graphics, results identified thusfar areextremely powerful from business outcomes, marketing, branding, and communicationsperspectives.We anticipate that, going forward, similar results for linkage analyses will be realized in wayssimilar to those we have experienced in B2B and B2C Brand Passion and Customer Advocacystudies conducted around the world.Detailed linkage results will shortly be published, and presented at major conferences inU.S., Canada, EMEA, and Asia.37New Analytical Investigation
  38. 38. To learn more - -• About Market Probe’s work –– Check out the book: The Customer Advocate andthe Customer Saboteur– You can find the book on ASQ’s Store, – item H1410– Look for 2010/2011 advocacy articles onCustomerThink (• Or connect via -– T: 414-530-5422––• About the topic through ASQ –– Search ASQ’s Knowledge Center@ you!