The importance of being earnest about advocacy

Word-of-mouth endorsement is a major factor behind many purchases, meaning that managing and measuring brand advocacy is the ultimate marketing goal.

Above:, one of Shop Direct’s retail brands, links users’ transactional behaviour to help measure advocacy

Brand advocacy is growing in importance. The number of consumers who trust purchase recommendations from friends, family and online opinions has risen rapidly since 2009, overtaking the number who trust TV and print media, which has plummeted, according to Nielsen. 

“We spend at least an hour every week talking just about any changes in the degree of advocacy that we see for the product and the service around the world,” says Nokia MixRadio head of global marketing Andy Gaitskell-Kendrick. “It’s an integral part of the way we look at our marketing, but we also use it dynamically to influence what we do with our products.”

Management consultancy The Boston Consulting Group (BCG) has surveyed more than 32,000 consumers in Europe and the US on the topic of consumer advocacy this year. 

“In 1980, there were around 12 consumer touchpoints. Now it’s over 55,” says BCG partner Pedro Esquivias. “You also have many more messages being pushed out through those channels. To manage this clutter, consumers are relying more and more on the recommendations and opinions of the people they trust. 

“Trust in general has suffered significant erosion. Even before the [economic] crisis, trust in institutions and brands was eroding. People need to trust something; they are trusting their friends, relatives and co-workers,” says Esquivias. 

Lisa Wood, head of marketing at HSBC’s direct banking brand First Direct, agrees: “In terms of the way in which consumers make decisions now, they don’t just believe an ad; they then go back to the social channels and ask people for their opinion,” she says. First Direct is the most recommended bank worldwide according to BCG.

Word-of-mouth brand recommendations from consumers can have a big impact on sales. While a positive buzz can move the financial needle forward, negative word of mouth from brand critics can push results in the opposite direction.

“Reputation is everything,” explains Wood. “Our belief is that if you have customers that are highly engaged with your brand and if you are offering the right products and services, they will come and buy from you.

“Our customers speak very fondly, kindly and passionately about our brand and what we do for them, and that is infectious in terms of bringing more customers on board,” she says. 

BCG data shows that 66 per cent of people consult friends and family and 50 per cent consult online consumer opinions before making a purchase, and they do so two to 10 times more often than they consult the media and more even than they refer to company websites. 

Perhaps surprisingly, however, this is still predominantly an offline phenomenon. An estimated 90 per cent of consumer conversations about brands take place in the real world rather than through the much smaller but growing source of social media, according to BCG.  

“We use our recommendation and satisfaction in our above-the-line advertising, as a way of grabbing consumer attention to the fact that we are one of the best banks in the UK,” explains First Direct’s Wood. 

“We also work the social space quite hard with Facebook and Twitter – we have a customer service as well as a brand Twitter feed and are very quick to respond in social channels. We find that customers jump in and act as advocates for us in those channels as well. Social media will be an area of focus for us to make sure we’re harnessing and growing that.”

Gaitskell-Kendrick at Nokia MixRadio adds: “We run a weekly listening report on social media. We look at the number of conversations that are happening about Nokia MixRadio and at the sentiment associated with those conversations. 

“We try to highlight both the positives and negatives so that we can do more of the things that are encouraging positive conversations and understand what is going on with any negatives that we see. It means you can be really responsive in terms of product development but also the marketing output.”

Nile Rodgers at Nokia MixRadio’s launch. MixRadio puts major resources into tracking advocacy and uses the results to adapt its marketing and products

However, brands often find it hard to measure advocacy in the marketplace, to demonstrate its top-line impact and to develop tactics that improve word of mouth. 

Dene Jones, customer director of Shop Direct , says there is “no other silver bullet” for measurement: “In terms of behavioural measures, our focus is on visit frequency, which indicates to what extent we regularly appear in the customer’s considerations for a pending purchase. We also monitor transactional measures such as frequency of purchase, average order value and cross-category purchasing.”

From the surveys it has carried out this year, which cover France, Germany, Spain, the UK and the US, BCG has created a new measurement tool called the Brand Advocacy Index. The results reveal the 55 most recommended brands across five industries, with results comparable across countries and regions. 

The results show that the top brands across the non-luxury automobile, smartphone, grocery, mobile telecommunications and retail banking sectors respectively are Volkswagen, iPhone, Spanish grocery retailer Mercadona, French mobile company Free and First Direct. 

In the UK, the top-ranking brands across these same sectors are Volkswagen, iPhone, Aldi, Tesco Mobile and First Direct. 

BCG measured up to 12 industry-specific factors, both rational and emotional, which influence recommendations. They include performance, customer service, social responsibility, brand identification, design and value for money. In many cases, the biggest brands do not score the highest on advocacy in a market. 

The Brand Advocacy Index shows a strong correlation between advocacy and top-line growth and the most recommended brands significantly outperform highly criticised companies in top-line growth. 

“We poll people who know the brand, either customers or non-customers, and ask whether they have actually recommended that brand, rather than propensity to recommend. The Brand Advocacy Index looks at actual advocacy, not intention. What people say they will do and what they actually do can be quite different,” says Esquivias. 

In all five countries studied, value for money is consistently among the three factors that most influence recommendations.

Spanish supermarket Mercadona is a good example of this. According to its annual report, the retailer bases its commercial model on the formula ’Always low prices’ (‘Siempre precios bajos’ in Spanish). This enables ‘the boss’, as the company calls its customers, to fill their basket with high quality products at the lowest possible prices, The company’s motto for over 19 years has been: ‘Quality doesn’t have to be more expensive’.

Customer service is among the top three factors that most influence recommendations for grocery, mobile telecommunications and retail banking, according to BCG, while performance and design are in the top three for the smartphone and automobile industries. 

“If you look at the current account switching market, the number-one reason for people leaving their banks is bad customer service,” says Wood at First Direct. 

Furthermore, when consumers have a strong emotional connection with a brand and their rational needs are met, they are likely to recommend that brand spontaneously and unprompted, providing the most powerful form of advocacy, according to BCG’s study. 

Gaitskell-Kendrick at Nokia MixRadio says: “We are in that entertainment and technology cross-over space with some very strong social networks and micro-communities. There are so many people writing about technology and brands that having that positive sentiment from the peer group is critical to the mass market giving the technology a try for themselves.” 

But critics matter far more than advocates, according to the study, owing to the ability of negative messages to drown out those that are positive. Non-customers have also been found to be influential in certain industries, such as those in which consumers purchase products and services infrequently, or in which there is only a small number of purchasers, such as luxury automobiles.

Positive advocacy tends to be higher in industries where products or services evoke consumers’ greater emotional involvement. People feel more closely connected to their smartphone than to their toothpaste, for example. 

However, any brand can harness the power of positive recommendation to some extent and the benefits of brand advocacy are numerous, BCG’s report shows. It enables brands in both consumer and business-to-business markets to shape everyday customer conversations.

Top UK brands by advocacy

Automotive: Volkswagen
Smartphone: iPhone
Grocery: Aldi
Mobile telecoms: Tesco Mobile
Retail banking: First Direct

Source: Boston Consulting Group

The three big advocacy challenges

The Boston Consulting Group’s Brand Advocacy Index gives brands advice on how best to persuade consumers to recommend them to peers. Here is a summary of their insights:

Prioritise actions with the highest potential to drive advocacy

Retailers should develop programmes for lowering prices or improving product quality
on the basis of what drives advocacy. For brands with low levels of consumer identification, companies can showcase innovation and improve their own image. Structural weaknesses may require major improvements to both the design and execution of the customer value proposition. 

Build on specific advantages

If a company’s brand is not being recognised by consumers for a particular strength, the company can find strategic opportunities associated with areas in which its brand already leads and with specific factors that matter in its industry. Brands can also involve their network of existing customers, and potentially non-customers, as advocates for their strengths in a way that can be more effective than other methods.
A combination of targeting the right consumers, creating powerful and disruptive messages that strike an emotional chord and building long-term relationships based on an understanding of the dynamics of advocacy can prove the key to success. 

Focus on the right segments 

Getting a complete view of advocacy helps companies as they target specific brands, product and service categories, countries, and groups of customers and non-customers to reveal areas that could be improved. It may also inform brand repositioning efforts, in which focused attention can generate significant value. This will also help increase word of mouth among their most profitable customers. As well as guiding brand transformation, measuring advocacy offers unique insights into broader issues of customer service and loyalty programmes that could be improved with a better understanding of the specific brand attributes that customers value.


USAA, which provides financial services to military veterans and their families, ranks highest in advocacy among US retail banks in The Boston Consulting Group’s Brand Advocacy Index, with a score of 44 per cent. This is also the third-highest score overall in the international sample of finance brands, with the UK’s First Direct coming top. 

USAA sets itself apart from others in the industry, BCG’s report says, with its relentless focus on customer service, which it bases on six cultural pillars that all of its employees agree to follow. 

It also ranks highly on value for money, offering free current accounts and limiting extra fees – both unusual features among US banks. 

Because its US military customers are global , the company has been a pioneer in delivering its products and services remotely, first using mail and now mainly employing the internet and telephone. 

It does not have a large branch network and markets itself directly, without agents. This low-cost model means it can invest in its customer experience, most notably its online capabilities across a range of banking, brokerage and insurance products. 

In recent years, USAA’s deposits have grown at more than twice the average rate of a large financial institution in the US, and an increasing number of consumers who are not even in the military say they are highly aware of the brand’s reputation, showing how far word of mouth can travel.



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